DCIT, Bangalore v. M/s Srishti Jewellers, Bangalore

ITA 1410/BANG/2008 | 2006-2007
Pronouncement Date: 26-02-2010 | Result: Allowed

Appeal Details

RSA Number 141021114 RSA 2008
Bench Bangalore
Appeal Number ITA 1410/BANG/2008
Duration Of Justice 1 year(s) 3 month(s) 5 day(s)
Appellant DCIT, Bangalore
Respondent M/s Srishti Jewellers, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted B
Tribunal Order Date 26-02-2010
Date Of Final Hearing 30-12-2009
Next Hearing Date 30-12-2009
Assessment Year 2006-2007
Appeal Filed On 20-11-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER ITA NO.1271/BANG/08 ASSESSMENT YEAR : 2006-07 M/S. SRISTI JEWELLERS NO.9 M.M. LANE NAGARTHPET CROSS BANGALORE 560 002. : APPELLANT VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 1(4) BANGALORE : RESPONDENT ITA NO.1410/BANG/08 ASSESSMENT YEAR : 2006-07 THE DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 1(4) BANGALORE : APPELLANT VS. M/S. SRISTI JEWELLERS BANGALORE. : RESPONDENT ASSESSEE BY : MS. SHEETAL REVENUE BY : SMT. V.S. SREELEKHA O R D E R PER A. MOHAN ALANKAMONY ACCOUNTANT MEMBER THESE ARE TWO APPEALS (I) ONE BY THE ASSESSEE FIRM AND (II) ANOTHER BY THE REVENUE - BOTH ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-VI BANGALORE IN ITA NO:318/ACIT CC 1(4)/BLR /CIT(A)-VI/07-08 DATED: 19.8.2008 FOR THE ASSESSMENT YEAR 2006-07. ITA NO.1271/BANG/08 PAGE 2 OF 11 I . ITA NO: 1271/-08 [ BY THE ASSESSEE ]: 2. THE ASSESSEE FIRM (THE ASSESSEE IN SHORT) HAS RAISED SEVEN GROUNDS HOWEVER ON A PERUSAL GROUND NOS: 1 2 AN D 7 BEING GENERAL AND NO SPECIFIC ISSUES INVOLVED THEY HAVE BECOME NON-C ONSEQUENTIAL. IN THE REMAINING GROUNDS THE SUBSTANCES OF THE ISSUES ARE FOR THE SAKE OF CLARITY THEY ARE REFORMULATED AS UNDER: (I) THE CIT(A) OUGHT TO HAVE APPRECIATED THAT THE AO HA D GIVEN A FINDING THAT NO BOOKS OF ACCOUNTS WERE MAINTAINED AND THAT NO ADDITION U/S 69 OF THE ACT WAS FEASIBLE; (II) THE CIT(A) OUGHT TO HAVE DELETED THE DISALLOWANCE M ADE UNDER THE HEAD EXPENDITURE ON ACCOUNT OF WAGES; & (III) THE ASSESSEE DENIES LIABLE FOR CHARGING OF INTEREST U/S 234A 234B AND 234C OF THE ACT. II. ITA NO: 1410/-08 [ BY THE REVENUE ]: 3. THE REVENUE HAS RAISED SIX GROUNDS OF APPEAL. GROUND NOS.1 5 AND 6 BEING GENERAL AND NO SPECIFIC ISSUES INVOLVED THEY ARE DISMISSED AS NON-CONSEQUENTIAL. IN THE REMAINING G ROUNDS THE GRIEVANCE OF THE REVENUE IS CONFINED TO: (I) THE LD. CIT(A) HAS ERRED IN DELETING THE UNEXPLAINE D INVESTMENT IN THE EXCESS OF GOLD AMOUNTING TO RS.1451400/- THEREBY REDUCING THE INCOME OF THE ASSESSEE; - THE ALLEGED STOCK DIFFERENCE WAS PUT TO THE PARTNER WHO HAD FAILED TO EXPLAIN SATISFACTORILY; - NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO CROSS E XAMINE RATAN MANDAL WAS CONTRARY AS THE ASSESSEE WAS PROVI DED WITH THE STATEMENT RECORDED HOWEVER THE ASSESSEE HAD NOT RESPONDED FOR CROSS EXAMINATION. 4. COMMON ORDER : AS THE ISSUES RAISED BY THE EITHER PARTY ARE PERTAINING TO THE SAME ASSESSMENT YEAR BOTH THE AP PEALS WERE HEARD ITA NO.1271/BANG/08 PAGE 3 OF 11 CONSIDERED TOGETHER AND DISPOSED OFF IN THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND COHESION. 5. BRIEF : THE NATURE OF BUSINESS OF THE ASSESSEE - A PARTN ERSHIP FIRM WHICH CONSISTS OF SUBRATA ROY AND HIS WIFE SMT. BAB Y ROY AS PARTNERS - WAS MAKING OF GOLD ORNAMENTS FOR MAJOR JEWELLERS OF BANGALORE. SUBRATA ROY RUNS A PROPRIETARY CONCERN FROM HIS RESIDENCE I N THE NAME OF RAJGHARANA GOLDSMITHS WHICH MAKES GOLD JEWELLERY. 5.1. THE RESIDENTIAL AS WELL AS THE BUSINESS PREMIS ES OF SUBRATA ROY AND GROUP OF CASES WERE SUBJECTED TO ACTION U/S 132 OF THE ACT ON 25.2.2006. IN COMPLIANCE TO A NOTICE U/S 153A OF THE ACT DT: 2 4.7.2007 THE ASSESSEE FURNISHED A ROI ADMITTING AN INCOME OF RS.38560/- ON 6.12.2007. 5.2. DURING THE COURSE OF SEARCH OF THE ASSESSEES PREMISES THE PHYSICAL STOCK OF GOLD AND SILVER ORNAMENTS FOUND I N THE PREMISES WAS VALUED BY THE REGISTERED VALUER ACCORDING TO WHICH THE GROSS AND NET WEIGHT OF GOLD WAS 15969.779 GRAMS AND 13830.40 GRA MS RESPECTIVELY. 5.3. ON THE BASIS OF THE STATEMENT OF THE SALES MAN AGER/PERSON THE AO WAS OF THE VIEW THAT THE ASSESSEE WAS NOT MAINTAINI NG ANY BOOKS OF ACCOUNT STOCK REGISTER ETC. EXCEPT SALES INVOICES AND PURCHASE BILLS. BASED ON THESE FACTS THE BOOK STOCK WORKS OUT TO 8707.533 GRAMS AND WHILE COMPARING THIS WITH THE PHYSICAL STOCK HE HA D ARRIVED AT A CONCLUSION THAT THERE WAS A DIFFERENCE OF EXCESS STOCK OF 5212 .867 GRAMS AND AS PER THE VALUATION REPORT THE EXCESS GOLD HAD A VALUE O F RS.39.09 LAKHS. THIS WAS CONSIDERED AS EXCESS STOCK AND PROPOSED TO TAX FOR THE FY 2005-06. ITA NO.1271/BANG/08 PAGE 4 OF 11 5.4. AFTER DUE CONSIDERATION OF THE ASSESSEES CON TENTION WHICH WAS IN RESPONSE TO A SHOW-CAUSE NOTICE THE AO HAD OBSERVED THUS: 6.1. THE ASSESSEE HIMSELF IS ACCEPTING THAT HE IS NOT MAINTAINING ANY BOOKS OF ACCOUNTS OR STOCK REGISTER. ASSESSEES CO NTENTION OF GOLD JEWELLERY INTRODUCED BY THE PARTNERS IN THEIR INDIV IDUAL CAPACITIES IS ALSO NOT ACCEPTABLE AS THERE IS NO PROOF OF ANY SOR T TO THAT EFFECT AND EVEN THE ASSESSEES CONTENTION OF SOME GOLD JEWELLE RY BELONGING TO VARIOUS CUSTOMERS AND RELATIVES ALSO DOES NOT ARISE AS THERE WAS NO PROOF IN THIS REGARD AND ALSO THE SAME QUESTION HAS BEEN PUT FORWARD TO RATAN MANDAL AT THE TIME OF SEARCH AND HE HAS AC CEPTED THAT NO GOLD BELONGING TO ANYBODY IS LYING IN THE OFFICE PR EMISES. RATAN MANDAL AND SUBRATA ROY WAS RESPECTIVELY ASKED REGAR DING GOLD JEWELLERY INTRODUCED BY THE PARTNERS IN THEIR INDIV IDUAL CAPACITY AND AVAILABILITY OF GOLD WITH THEM THE PROOF FOR THE S AME IN THE FORM OF WEALTH TAX RETURN FILED WITH THE DEPARTMENT OR THE BALANCE SHEET FILED ALONG WITH THE RETURN. BUT THE ASSESSEES HAVE STAT ED THAT THEY HAVE NOT FILED ANY WEALTH-TAX RETURN WITH THE DEPARTMENT AND NO BALANCE SHEET WAS FILED EARLIER. HENCE NOW TAKING A VIEW THAT SO ME GOLD BELONGS TO VARIOUS CUSTOMERS OR RELATIVES ARE ONLY AN AFTER TH OUGHT TO AVOID AN ADDITION UNDER THE HEAD UNEXPLAINED INVESTMENT AS T HERE IS AN EXCESS STOCK OVER AND ABOVE THE STOCK ARRIVED BY COMPUTING TOTAL SALES AND PURCHASES. 5.5. THUS HE HAD TREATED RS.39.09 LAKHS AS UNEXP LAINED INVESTMENT FOR THIS YEAR AND TAXED ACCORDINGLY. 6. AGGRIEVED THE ASSESSEE TOOK UP THE ISS UE BEFORE THE CIT(A) FOR REDRESSAL. AFTER GIVING DUE WEIGHT-AGE TO THE ARGU MENT OF THE ASSESSEE THE LD. CIT(A) HAS OBSERVED THUS 10..IT HAS BEEN ARGUED THAT THE PARTNE RS OF THE FIRM WHEN PRESENT IN THE TOWN ATTENDING TO SEA RCH ACTION AT THEIR RESIDENCE AND WORKSHOP IN THE RESIDENCE COULD VERY WELL BEEN ASKED ABOUT THE STOCK DIFFERENCE FOUND IN THE SHOW-ROOM O F THE APPELLANT INSTEAD OF TALLY GOING BY THE STATEMENT OF THE SALE S MANAGER RATAN MANDAL. RECORDS WERE EXAMINED. THERE IS STRENGTH IN THE ARGUMENT OF AUTHORIZED REPRESENTATIVE. THERE IS NO QUESTION AS TO STOCK DIFFERENCE OF THE APPELLANT TO ANY OF THE PARTNERS ON THE DATE OF SEARCH I.E. 25.2.06 OR SUBSEQUENTLY. ON 4.4.06 A STATEMENT OF SUBRATO ROY HAS BEEN RECORDED BUT HE HAD BEEN ONLY ASKED ABOUT THE ALLEGED STOCK ITA NO.1271/BANG/08 PAGE 5 OF 11 DIFFERENCE OF GOLD JEWELLERIES FOUND AT THE RESIDEN CE AND WORKSHOP LOCATED IN THE RESIDENCE. THE DEPARTMENT HAS FAILE D HERE BECAUSE (I) NO QUESTION AS TO ALLEGED STOCK DIFFERENCE WAS PUT TO ANY OF THE PARTNERS OF THE APPELLANT FROM EITHER AT SEARCH OR POST SEARCH INVESTIGATION OR DURING ASSESSMENT PROCEEDING; AND (II) NO OPPORTUNITY TO CROSS EXAMINE RATAN MANDAL WAS AFFORDED. IN VIEW OF THE ABOVE THE ARGUMENT OF AO THAT THE B ALANCE SHEET FILED BE CONSIDERED AS UNRELIABLE AND COOKED NOT BEING BA SED ON BOOKS OF ACCOUNTS OR BECAUSE IT WAS FILED I.E. ON 6.12.07 M UCH LATER THAN THE DATE OF SEARCH I.E. 25.2.06 PROVIDING SCOPE TO THE APPELLANT TO COOK THE BALANCE SHEET IS NOT TENABLE. UNDER SUCH CIRCUMSTA NCES I HAVE NO OTHER WAY BUT TO BELIEVE THAT THE INVESTMENT OF GOL D AS CAPITAL BY BOTH THE PARTNERS OF RS.718600/- AND RS.732800/- AS TRUT H EVEN IF NO ACCOUNTS ARE KEPT THEREOF ADMITTEDLY. THEREFORE THE SE GROUNDS ARE ALLOWED AND RELIEF OF RS.1451400/- IS GIVEN. 7. DISILLUSIONED THE ASSESSEE HAS COME UP BEFORE U S WITH THE PRESENT APPEAL FOR DELETION OF THE ENTIRE ADDITION. THE LD. A R WAS VERY EMPHATIC IN HER RESOLVE THAT WHEN THE AO HAD GIVEN A CATEGOR ICAL FINDING THAT THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNT A ND THEREFORE THE LD.CIT(A) OUGHT TO HAVE HELD THAT NO ADDITION U/S 6 9 OF THE ACT COULD BE MADE AND THUS HE OUGHT TO HAVE DELETED THE ENTIRE ADDITION IN STEAD HE CONCEDED ONLY FOR A PARTIAL RELIEF. IT WAS FURTHE R CONTENDED THAT THE CIT(A) HAD FAILED TO TAKE COGNIZANCE OF THE SALES MANAGER S STATEMENT THAT THE PERSONAL JEWELLERY ALSO GOT MIXED UP WITH THE STOCK -IN-TRADE AND ON THE BASIS OF WHICH HE SHOULD HAVE GRACEFULLY DELETED T HE ENTIRE ADDITION. AS THE ENTIRE ADDITION DESERVES TO BE DELETED IT WAS PLEADED THAT THE ADDITION MADE BY THE AO ORDERED TO BE DELETED IN TOTO. DURI NG THE COURSE OF HEARING THE LD. A R HAD FURNISHED A PAPER BOOK CON TAINING 1 28 PAGES WHICH CONSISTS OF INTER ALIA COPIES OF (I) STATEM ENT OF INCOME TRADING P & L ACCOUNT BALANCE SHEET FOR AY 06-07 (II) SWORN ST ATEMENTS OF RATAN MANDAL U/S. 132(4) 133A (III) SWORN STATEMENT OF SUBRATA ROY ETC. ITA NO.1271/BANG/08 PAGE 6 OF 11 7.1. ON HER PART THE LD. D R HAD STOUTLY DEFENDED THE ACTION OF THE AO THAT THE CIT (A) HAD ERRED IN DELETING THE UNEXPLAI NED INVESTMENT IN THE EXCESS OF GOLD AMOUNTING TO RS.14.51 LAKHS AND WITH REGARD TO THE LD.CIT(A)S OBSERVATION THAT NO OPPORTUNITY WAS GIV EN TO CROSS EXAMINE RATAN MANDAL WAS CONTRARY TO THE FACT THAT THE ASSE SSEE WAS PROVIDED WITH A STATEMENT OF RATAN MANDAL BUT THE ASSESSEE HAD FAILED TO SHOW HIS WILLINGNESS TO CROSS-EXAMINE HIM. IN LIEU OF THE A BOVE IT WAS SUBMITTED THAT THE IMPUGNED ORDER OF THE LD. CIT(A) REQUIRES TO BE ANNULLED AND THAT OF THE AO BE RESTORED. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS PERUSED THE RELEVANT RECORDS AND ALSO THE DOCUMENTS PRODUCED BY THE LD. A.R BY WAY OF A PAPER BOOK. 8.1. AT THE OUT-SET WE WOULD LIKE TO POINT OUT THA T THE AO HAD MADE A FAUX PAS IN MENTIONING THE SECTION UNDER WHICH THE ASSESSMENT WAS CONCLUDED AS 143(3) OF THE I.T. ACT INSTEAD OF 1 43(3) R. W. S. 153A OF THE ACT. 8.2. WE HAVE SCRUPULOUSLY PERUSED THE STATEMENT RE CORDED U/S 133A OF THE ACT IN THE CASE OF RATAN MANDAL WHEREIN HE HAD DEPOSED THAT HE WAS A JEWELLERY WORKER BASICALLY WORKING WITH S UBRATA ROY AND WHEN THE SHOW-ROOM WAS OPENED DURING OCTOBER 2005 HE W AS LOOKING AFTER THE SALES IN THE SAID SHOW ROOM . HE HAD FURTHER DEPOSED THAT (ANSWERING TO Q.4) EXCEPT BILL BOOK FOR SALES AND ORDER BOOK & PURCH ASE INVOICES WE DO NOT MAINTAIN ANY OTHER BOOKS OF ACCOUNTS. ALL SA LES ARE MADE THROUGH BILL ITA NO.1271/BANG/08 PAGE 7 OF 11 BOOK ONLY. MR.SUBRATO ROY ONLY MAINTAINS ALL THE BOOKS OF ACCO UNTS. I DO NOT KNOW ANYTHING ABOUT THIS. THE BOOKS OF ACCOUNT S ARE NOT KEPT IN THIS PREMISE. 8.3. FROM THE ABOVE DEPOSITION WE COULD DRAW AN IN FERENCE THAT HE WAS BASICALLY A JEWELLERY WORKER AS ADMITTED BY HIMSELF AND THAT HE WAS ASSIGNED TO LOOK AFTER THE SALES ONLY AND THE MAINT ENANCE OF THE BOOKS OF ACCOUNT AND OTHER ASPECTS WERE BEING LOOKED AFTER B Y SUBRATO ROY. SUBRATO ROY WHO WAS THE PARTNER OF THE ASSESSEE FIR M WAS VERY MUCH IN THE TOWN ON THE DATE OF SEARCH AND IN FACT HIS ST ATEMENT WAS RECORDED U/S 132 OF THE ACT ON THE VERY SAME DAY I.E. 25.2.2006 . HOWEVER THE RECORDING OF STATEMENT OF SUBRATO ROY WAS CONFINED ONLY TO HIS PROPRIETARY CONCERN RAJGHARANA GOLDSMITHS. SUBRATO ROY BEING TH E MAIN PARTNER OF THE ASSESSEE FIRM WHICH WAS SUBJECTED TO A SEARCH O PERATION AND HE WAS VERY MUCH AVAILABLE WHY THE REVENUE HAD NO T THOUGHT IT FIT TO SUMMON HIM TO THE ASSESSEE FIRMS PREMISES TO RECOR D HIS STATEMENT IS RATHER INTRIGUING. SUBSEQUENTLY THE STATEMENT O F SUBRATO ROY WAS RECORDED ON 4.4.06 U/S 132(4) OF THE ACT WHEREIN AN SWERING TO QUESTION NO.4 HE HAD STATED THAT IN MY BUSINESS I HAVE MIXED THE PERSONAL GOLD [I. E. BELONGING TO MY WIFE AND MYSELF] IN THE GOLD OF THE BUSINESS. MY WIFE MUST BE HAVING AROUND 2 2.5 KGS OF GOLD AROUND 3 KGS WER E GIVEN BY MY FATHER AT THE TIME OF STARTING BUSINESS. SOME GOLD BELONGS TO MY VARIOUS CLIENTS LIKE M/S. C. KRISHNAIAH CHETTY & SONS M/S SHREE JEWELLERS M/S. NAVARATHAN JEWELLERS AND OTHER RETAIL CUSTOMERS. THE DETAILS AND CONFIRMATI ONS FROM THESE PARTIES WILL BE FURNISHED TO YOU TO-MORROW. OTHER THAN THIS ALL O THER GOLD BELONGS TO MY BUSINESS. FOR Q.4: ARE YOU ABLE TO FURNISH ANY CONFIRMATIONS FROM YOUR ITA NO.1271/BANG/08 PAGE 8 OF 11 CUSTOMERS NOW? FOR WHICH HE HAD STATED THAT I AM GIVING YOU THE CONFIRMATION RECEIVED FROM M/S. PRATHIBHA JEWELLERS WHO HAD GIVEN S A BANGLE AND NECKLACE AS SAMPLE.[ SOURCE: P 19 OF P.B.] TO DRIVE HOME HIS POINT DURING THE COURSE OF HEARING THE ASSESSEE HAD PRODU CED A COPY OF THE LETTER DATED: 4.6.09 [P.28 OF P.B.] ADDRESSED TO TH E ACIT C.C.1(4) BANGALORE WHEREIN HE HAD MENTIONED THAT . .I WOULD LIKE TO BRING TO YOUR KIND NOTICE THAT MY COUNSEL WHO IS APPEARIN G BEFORE THE HONBLE INCOME-TAX APPELLATE TRIBUNAL IN RESPECT OF THE APP EAL MATTERS PENDING BEFORE THE HONBLE TRIBUNAL IS IN NEED OF THE CONFI RMATION LETTER GIVEN BY M/S. PRATHIBA JEWELLERS WHICH WAS HANDED OVER TO TH E INSPECTION AUTHORITIES AT THE TIME OF SEARCH WHICH IS RECORDED AS ANSWER T O QUESTION NO.5 OF MY OATH STATEMENT GIVEN ON 25.2.2006 (SIC) STATEMENT U /S 132(4) DT.4.4.06. THIS IS REQUIRED BY HIM TO REPRESENT THE MATTER. HENCE I REQUEST THAT A COPY OF THE SAID CONFIRMATION LETTER MAY PLEASE BE MADE AVA ILABLE TO ME AT THE EARLIEST TO ENABLE ME TO SUBMIT THE SAME TO MY COU NSEL. THIS LETTER HAS BEEN ACKNOWLEDGED BY THE ACIT CENTRAL CIRCLE BANG ALORE ON 4.6.2009. HOWEVER NO SUCH CONFIRMATION LETTER WAS PRODUCED BEFORE THIS BENCH FOR PERUSAL. 8.4. AS COULD BE SEEN FROM THE IMPUGNED ASSESSMENT ORDER THE AO HAD GIVEN MUCH WEIGHTAGE TO THE STATEMENT OF RATAN MAND AL WHO WAS A MERE SALESMAN OF THE ASSESSEE RATHER THAN SUBRATA ROY WH O WAS THE MAIN PARTNER WHOSE ASSERTION AND HIS STATEMENT HAS BEE N RELEGATED TO THE SECOND PLACE FOR THE REASON BEST KNOWN TO THE AO H IMSELF. IT IS PERTINENT TO MENTION HERE THAT NO ATTEMPT WAS MADE TO ELICIT INFORMATION FROM THE ITA NO.1271/BANG/08 PAGE 9 OF 11 PARTNERS OF THE FIRM WITH REGARD TO THE ALLEGED STO CK DIFFERENCE ON ACCOUNT OF SEARCH OPERATION AND PRECISELY NO OPPORTUNITY WA S AFFORDED TO THE PARTNERS OF THE ASSESSEE FIRM TO CROSS-EXAMINE RATA N MANDAL IN WHOSE STATEMENT THE REVENUE HAD HEAVILY RELIED FOR MAKING THE ADDITION WHICH IS UNDER DISPUTE. THE REVENUES STAND WAS THAT THE ASSESSEE WAS PROVIDED THE STATEMENT OF RATAN MANDAL BUT ASSESSEE HAS FAI LED TO EXPRESS HIS WILLINGNESS FOR THE CROSS EXAMINATION. HOWEVER ON A PERUSAL OF THE IMPUGNED ASSESSMENT ORDER WE FIND THAT THIS ASSERT ION DOESNT FIND A PLACE IN IT. 8.5. THE AO IN HIS REMAND REPORT TO THE CIT(A) HA D MENTIONED THAT AT THE TIME OF SEARCH PROCEEDINGS AND EVEN DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO GIVE THE PROOF OF INTRODU CTION OF GOLD BY THE PARTNERS. BUT THE ASSESSEE HAS FAILED TO GIVE ANY EVIDENCE NOR THE SOURCE FOR THE SAME.. HOWEVER THE PARTNER OF THE ASSESSEE FIRM DURIN G THE COURSE OF RECORDING HIS STATEMENT U/S 132(4) OF THE ACT ON 4.4.06 [SOURCE: P 19 OF PB] HAD PRODUCED A CONFIRMATION LETTER PURP ORTED TO HAVE BEEN PROCURED FROM M/S. PRATHIBHA JEWELLERS. BUT THE AO BOTH IN THE ASSESSMENT ORDER AND IN THE REMAND REPORT HAD CONVE NIENTLY IGNORED TO MENTION THE SAME AND THE REASON FOR WHICH IS FAR TO SEEK. 8.6. IN AN OVERALL CONSIDERATION OF THE FACTS AND C IRCUMSTANCES OF THE ISSUE AS DELIBERATED UPON IN THE FORE-GOING PARAGRA PHS WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE FIRM HAS BEEN DEP RIVED OF THE NATURAL JUSTICE IN AS MUCH AS NOT AFFORDING AN OPPORTUNITY TO CROSS-EXAMINE RATAN MANDAL AND THAT THE PARTNERS OF THE ASSESSEE FIRM H AVE NOT BEEN POSED OR ITA NO.1271/BANG/08 PAGE 10 OF 11 COUNTERED WITH THE ALLEGED STOCK DIFFERENCE IN GOLD ITEMS EITHER DURING THE SEARCH OPERATION OR AFTERMATH TO BRING OUT THE REAL POSITION. IN VIEW OF THE ABOVE WE ARE OF THE FIRM VIEW THAT FOR THIS LIMIT ED PURPOSE THE ISSUE SHOULD BE REMITTED BACK ON THE FILE OF THE AO WITH A SPECI FIC INSTRUCTION TO AFFORD A REASONABLE OPPORTUNITY TO THE ASSESSEE FIRM TO CROS S-EXAMINE RATAN MANDAL IF IT SO DESIRES TAKE INTO ACCOUNT THE PA RTNERS SIDE OF VERSION WITH REGARD TO THE ALLEGED STOCK DIFFERENCE IN GOLD ORNA MENTS AND THEN FINALIZE THE ISSUE IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. IT IS ORDERED ACCORDINGLY. 9. THE SECOND ISSUE OF THE DISALLOWANCE MADE UNDER THE HEAD EXPENDITURE ON ACCOUNT OF WAGES IS DISMISSED AS THE SAME WAS NOT PRESSED DURING THE COURSE OF HEARING. 10. THE OTHER GROUND RAISED IS CHARGING OF INTEREST U/S 234A 234B AND 234C OF THE ACT. CHARGING OF INTEREST U/S 234A 23 4B AND 234C OF THE ACT ARE MANDATORY AND CONSEQUENTIAL IN NATURE AND THER EFORE THIS GROUND IS DISMISSED AS NOT MAINTAINABLE. II . ITA NO. 1410 (BY THE REVENUE ): 11. THE REVENUES MAIN GRIEVANCE IS THAT THE LD. CI T (A) ERRED IN DELETING THE UNEXPLAINED INVESTMENT IN THE EXCESS O F GOLD AMOUNTING TO RS.1451400/- THEREBY REDUCING THE INCOME OF THE ASS ESSEE. 11.1. SINCE THIS ISSUE HAS BEEN EXHAUSTIVELY DELI BERATED IN THE FORE-GOING PARAGRAPHS (IN THE ASSESSEES APPEAL) AND THE MATTE R REMITTED BACK ON THE FILE OF THE AO FOR THE REASONS SET-OUT THEREIN THE GROUND RAISED BY THE ITA NO.1271/BANG/08 PAGE 11 OF 11 REVENUE HAS BECOME OBSOLETE AND THEREFORE THE SA ME HAS NOT BEEN ADDRESSED TO. 12. IN THE RESULT THE APPEALS OF (I) THE ASSESSEE FIRM; AND (II) THE REVENUE ARE TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES . PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF FEBRUARY 2010. SD/- SD/- ( SHAILENDRA KUMAR YADAV ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBE R BANGALORE DATED THE 26 TH FEBRUARY 2010. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.