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"1. That on the facts and in the circumstances of the case the Id CIT (A) is wrong, unjust and has erred in law in upholding the finding recorded by the ld AO that out of jewellery valuing Rs. 1933522/- found with the appellant at the time of interception by Air Intelligence Unit, Goa, jewellery valuing Rs. 1135308/- allegedly remained unexplained and thereby confirming the addition of the said amount of Rs. 1135308/- made to the income of the appellant by the Id AO.

3.1 The assessee was intercepted by the Air Intelligence Unit, Income-tax Department, Goa on 11.01.2017. The Air Intelligence Unit, Goa found silver jewellery items in possession of the assessee, which were later valued by the registered Valuer with the Income-tax Department, who valued the said silver jewellery items at Rs. 19,33,522/-. During said proceedings the statements of the assessee were recorded under section 131 of the Income-tax Act, 1961. In the above statements, the assessee agreed with the valuation made by the Registered Valuer of the Income-tax Department and the assessee tendered no objection with the findings and valuation made by the official valuer.

3.2 Based on these set of facts a survey was carried out at the business premises of M/s. Vinayak Gems, 2470, Yadav Building, Rasta Telipara, Jaipur on 12.01.2017. The survey team found that Yadav Building is a big premises and the assessee was having one room in the said premises wherein the assessee runs his firm M/s Vinayak Gems. The survey team found the said room was totally empty. Thus, it is understood that Ram Sahai Sharma vs. ITO whatsoever the stock the assessee had, was with him at the time when he was intercepted by the Air Intelligence Unit of Income-tax Department, Goa. The survey team also found no books of accounts, no bill books, no stock and any other thing related to the business of the assessee at the said room. Therefore, the contention of the assessee made in the statements remained unverified leaving the source of investment of jewellery items of Rs. 19,33,522/- found with the assessee at Goa unexplained. During the course of assessment proceedings, the assessee stated that the assessee computes his profit from business under sec. 44AD of the Income Tax Act, 1961, as such no regular books are maintained. However, details of purchase/sales were produced along with the supporting vouchers which were examined and copies were obtained and placed on the records by the ld. AO. A show cause was issued and served upon the assessee to show cause as why not the silver items valuing at Rs. 19,33,522/- found in his possession by the Air Intelligence Unit, Income-tax Department, Goa, may be considered as unexplained and added his total income. The assessee has not furnished any explanation on the said account. During the course of assessment proceedings it was noticed that the assessee was having opening stock of Rs. 4,30,728/- at the beginning of the F.Y 2016-17 corresponding to A.Y 2017-18. As per the Ram Sahai Sharma vs. ITO purchases and sales register produced during the course of the assessment proceedings, till 10.01.2017 (i.e. immediately before when he was intercepted by the Air Intelligence Unit, Goa on 11.01.2017), the assessee had made purchases of Rs. 21,87,497/- and sales of Rs. 18,20,011/-. Taking note of above facts, the stock as on 11.01.2017 with the assessee is worked out as under:-

Ram Sahai Sharma vs. ITO

9. We have heard the rival contentions and perused the material placed on record and also gone through the various judicial precedent cited to drive home to the respective contention so raised. The brief fact as emerges from the order of the lower authority is that the assessee is an individual engaged in small business of manufacturing and sale of silver jewellery in the name of Vinayak Gems. The jewellery manufactured by him is sold/delivered to shops at tourist cities as per orders for such silver jewellery to assessee. The assessee for his business purposes was going to Goa on 11-01-2017 carrying with him stock of silver jewellery to deliver silver items to traders to whom sale was affected as per their order by assessee and for sale to local shopkeepers while touring when he was intercepted by Air Intelligence Unit. The Air Intelligence Unit, Goa found silver jewellery items in possession of assessee which were later valued by valuer of I.T. Deptt. who valued the said stock of silver jewellery items at Rs. 19,33,522/-. The authorized officer of I.T. Deptt. at Goa also recorded statement of assessee u/s 131. In Jaipur at business premises (a room) of assessee at Yadav Building, Telepara, Jaipur where assessee carries on work of manufacturing and business in the name of Vinayak Gems a survey u/s 133A was also carried on 12-01-2017 in which survey team found the room was empty i.e. no account books, no stock and nothing related to Ram Sahai Sharma vs. ITO business was found and so survey team held that contention of assessee made in statement recorded by I.T. Officer at Goa remained unverified as for source of investment in silver jewellery items of Rs. 19,33,552/- found with assessee. During the course of assessment proceedings the assessee through his counsel submitted that the assessee computes his profits from business under Section 44AD of I. T. Act, 1961 and no regular books of accounts are maintained. The assessee, however submitted before A.O. details of purchase/sales/direct expenses of manufacturing along with supported vouchers which were examined, and copies thereof were given to A.O. who placed them on record. In the course of assessment proceedings the ld. AO required assessee to explain silver items valuing at Rs. 19,33,522/- found in possession of assessee by the Air Intelligence Unit, Goa and issued show cause notice as why the silver items valuing at 19,33,522/- may not be considered as unexplained and added to his total income. The assessee did not respond to the notices so the ld. AO based on material available with him as provided by assessee computed excess silver jewellery (stock) Rs. 11,35,308/- as per details given in para 7.2 and 7.3 of assessment order and considered the same as unexplained stock of the assessee. Based on the submission and arguments raised by the assessee the ld. CIT(A) has held that Ram Sahai Sharma vs. ITO It appears that the appellant has considered the value of stock found with him at Goa as sales value and asking for reduction of G.P. margin of 25 to 30% to arrive at cost of stock. No reason has been given by the appellant for this. The valuation made by the valuer was value of stock found in the possession of the appellant. The appellant has also not submitted any evidence in support of his argument that four sale bills totaling to Rs. 3,07,811/- which were issued and included in the sale of Rs. 18,20,011/-. It appears that the appellant tried to match the closing stock calculated by the AO on the basis of bills and vouchers with the value of stock found in his possession at Goa by hook and crook. The explanation submitted by the appellant is devoid of merit and hence rejected." Whereas, the assessee submitted before us that there is no dispute as to the total of the sales so reported but the delivery of goods of four sale bills totaling to Rs. 3,07,811/- which were issued and included in sales of Rs. 18,20,011/- was to be done at Goa which the goods, assessee was carrying with him. For this contention he informed to Air Intelligence Unit, I.T. Deptt.