INCOME TAX ACT, 1961

Section 143(3)

Assessment - Addition to income - Peak investment - Being value of jewellery intercept at Airport--Related sales already recorded in books of account

Assessee-company was engaged in manufacturing and dealers of gold jewellery and also doing labour job work. A passenger named Narinder Kumar who was intercepted in Mumbai Airport carrying the gold ornaments weighting 3,500 gm. (Approx.) from Mumbai to Chandigarh who declared that gold ornaments were purchased from the assessee-company. In order to verify claim of said passenger, verification under section 131 and sworn statement of (P) director of assessee-company were recorded. During the course of assessment proceedings, AO required assessee to explain as to why the jewellery of 3500 gm. sold to SBM Jewelers should not be added as income of assessee as the same was not recorded in sales register on the day of verification under section 131. only after recording of sales of 3,500 gms. to M/s. SBM Jewellers. However, explanation offered by assessee was rejected by AO by relying on statement of accountant and AO made addition of peak investment of Rs. 91,91,683 which was the value of jewellery intercepted in the Mumbai Airport which was sold to M/s. SBM Jewellers based on the list of cancelled bills found with the accountant. Held: As far as addition of Rs. 91,91,683 on account of peak investment with regard to interception of gold jewellery in Mumbai Airport which was sold to M/s. SBM Jewellers, it was apparent that interception of jewellery was made on 14-2-2012 and subsequently assessee had recorded the abovesaid sales in its books of account and same was part of turnover Disclosed in return of income submitted before AO. Since these sales were already recorded in books of account, additions with respect to peak investment could not be sustained.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 143(3)

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