Sri. Parasmal J Jain, Hubli V. ITO, Hubli

ITA 108/BANG/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0261 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 27-06-2016
• Assessment Year: 1998-1999
• Appeal Filed On: 01-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS JT
• Keywords: Valuation report
• Section: 234B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.108/BANG/2016 ASSESSMENT YEAR : 1998-99 SHRI PARASMAL J JAIN M/S. DHANALAXMI ENTERPRISES, NEW GABBUR, PB ROAD, HUBBALLI. PAN: AERPJ 0548P VS. THE INCOME TAX OFFICER, WARD 1(4), HUBBALLI. APPELLANTS RESPONDENT APPELLANTS BY : SHRI RAVISHANKAR, ADVOCATE RESPONDENT BY : SMT. SWAPNA DAS, JT. CIT(DR) DATE OF HEARING : 27.06.2016 DATE OF PRONOUNCEMENT : 30.06.2016 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE CIT(APPEALS), HUBLI DATED 27.11.2015 FOR THE ASSESS MENT YEAR 1998-99 INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE CIT (A) IN SO FAR AS THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, AND WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE APPELLANT DENIES TO BE ASSESSED AT RS. 11,02 ,740/- AGAINST THE DECLARED TOTAL INCOME OF RS.78,054/- ON THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.108/BANG/2016 PAGE 2 OF 5 3. THE LEARNED CIT (A) IS NOT JUSTIFIED IN CONFIRMI NG THE ADDITION OF RS.10,24,686/- UNDER SECTION 68 OF THE ACT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMI NG THE FINDING OF THE AO THAT THE NOMENCLATURE AS PER THE DECLARATION DIFFERED FROM THE SALE INVOICE AND HENCE THE SAID S ALE WAS OUT OF GOLD DIFFERENT FROM THE ONE IN THE DECLARATION MADE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN RELYING ON THE OBSERVATIONS MADE IN THE EARLIER APPELLATE ORDERS T O ARRIVE AT A FINDING THAT THE DECLARATION STOOD UNPROVED AND HEN CE THE GOLD SOLD WAS NOT OUT OF THE DECLARATION MADE. 6. THE LEARNED CIT(A) WAS NOT JUSTIFIED ON FACTS I N NOT CONSIDERING THE GOLD ON HAND WITH THE APPELLANT AS PER THE DECLARATION, TO BE THE SAME GOLD SOLD ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER W ITH THE HON'BLE CHIEF COMMISSIONER OF INCOME TAX/DIRECTOR G ENERAL OF INCOME TAX, THE APPELLANT FIRM DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST UNDER SECTION 234B OF THE ACT WHICH UND ER THE FACTS AND CIRCUMSTANCES OF THE CASE DESERVES TO BE CANCEL LED. THE CALCULATION OF INTEREST UNDER SECTION 234B IS NOT I N ACCORDANCE WITH LAW AS THE RATE, AMOUNT AND METHOD FOR CALCULA TING INTEREST IS NOT DISCERNIBLE FROM THE ORDER OF ASSESSMENT. 8. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIF Y, DELETE OR SUBSTITUTE ANY OR ALL OF THE GROUNDS AND TO FILE A PAPER BOOK AT THE TIME OF HEARING THE APPEAL. 9. IN VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE TAKEN AT THE TIME OF THE HEARING THE APPEAL, THE APPELLAN T PRAYS THAT THE APPEAL BE ALLOWED IN THE INTEREST OF JUSTICE AND EQ UITY. 2. THOUGH VARIOUS GROUNDS ARE RAISED, BUT THEY ALL RELATE TO INTRODUCTION OF CASH IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE ON SALE OF GOLD WHICH ITA NO.108/BANG/2016 PAGE 3 OF 5 WERE DECLARED UNDER VOLUNTARY DISCLOSURE OF INCOME SCHEME, 1997 (VDIS). 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTED THAT CERTAIN INTRODUCTION OF CASH WAS EXP LAINED BY THE ASSESSEE TO HAVE BEEN INTRODUCED ON ACCOUNT OF SALE OF GOLD JEWELLERY. IT WAS ALSO CONTENDED BY THE ASSESSEE THAT UNDER VDIS, THE ASSE SSEE HAS DECLARED THE GOLD ORNAMENTS/JEWELLERY. THE DECLARATION WAS ACCEPTED UNDER VDIS AND LATER ON GOLD JEWELLERY WAS CONVERTED INTO GOLD BULLION WHICH WAS SOLD AND THE SALE PROCEEDS WERE INTRODUCED IN THE BOOKS OF ACCOUNT. THE AO HAS RAISED A TECHNICAL OBJECTION BY STATING THAT TH E ITEMS DECLARED UNDER VDIS WERE NOT THE SAME, WHICH WERE SOLD AND THE SAL E PROCEEDS WERE INTRODUCED IN THE BOOKS OF ACCOUNT. 4. WHEN THE MATTER REACHED THE HONBLE HIGH COURT O F KARNATAKA, THE HON'BLE JURISDICTIONAL HIGH COURT HAS REMANDED THE MATTER BACK TO THE AO TO GIVE A SPECIFIC FINDING AS TO, WHETHER THE ITEMS SOLD WERE THE SAME WHICH WERE DISCLOSED UNDER VDIS? 5. IN THE REMAND PROCEEDINGS, THE ASSESSEE HAS FURN ISHED THE DETAILS OF ITEMS SOLD AND THE EVIDENCE OF CONVERSION OF THE GOLD JEWELLERY INTO GOLD BULLION. THE WEIGHT OF GOLD BULLION IS THE SAME. THE AO DID NOT ACCEPT THE CONTENTIONS OF THE ASSESSEE AND AGAIN MADE THE ADDI TION. THOUGH THE ASSESSEE HAS TRIED TO EXPLAIN THE FACTS WITH DETAIL S, BUT IT WAS NOT ACCEPTABLE TO THE CIT(APPEALS). ITA NO.108/BANG/2016 PAGE 4 OF 5 6. BEFORE THE TRIBUNAL, THE ASSESSEE HAS FILED A CO PY OF THE VALUATION REPORT, VDIS CERTIFICATE, COPY OF SALE OF GOLD BULL ION AND THE EVIDENCE OF CONVERSION OF GOLD JEWELLERY INTO GOLD BULLION. FR OM THIS EVIDENCE, THE ASSESSEE HAS TRIED TO EXPLAIN THAT THE SAME QUANTIT Y OF GOLD WHICH WAS DECLARED UNDER VDIS WAS SOLD. 7. PER CONTRA, THE LD. DR STRONGLY OPPOSED THE CONT ENTIONS OF THE ASSESSEE AND PLACED HEAVY RELIANCE UPON THE ORDER O F THE CIT(APPEALS). 8. HAVING CAREFULLY EXAMINED THE ORDERS OF LOWER AU THORITIES AND DOCUMENTS PLACED ON RECORD IN THE LIGHT OF RIVAL SU BMISSIONS, WE FIND THAT THE SAME QUANTITY OF GOLD WHICH WAS DECLARED UNDER VDIS WAS SOLD. THOUGH THE ASSESSEE HAS DECLARED THE GOLD JEWELLERY AND DIAMONDS IN DIFFERENT FORM UNDER VDIS, BUT IN SALE BILL THE ASS ESSEE HAS SOLD SAME QUANTITY OF GOLD BULLION AND DIAMOND. THE ASSESSEE HAS FILED EVIDENCE WITH RESPECT TO CONVERSION OF GOLD JEWELLERY INTO GOLD B ULLION. 9. SINCE THE SAME QUANTITY WHICH WAS DISCLOSED UND ER VDIS WAS SOLD, WE FIND NO JUSTIFICATION IN MAKING THE ADDITION ON INTRODUCTION OF SALE PROCEEDS IN THE BOOKS OF ACCOUNT. ONCE THE REVENUE HAS ACCEPTED THE DECLARATION UNDER VDIS AND ACCEPTED THE TAX DEPOSIT ED BY THE ASSESSEE, IT SHOULD NOT HAVE MADE A FURTHER ADDITION ON ACCOUNT OF INTRODUCTION OF SALE PROCEEDS OF THE SAID JEWELLERY IN THE BOOKS OF ACCO UNT. WE THEREFORE FIND NO MERIT IN THE ADDITION MADE BY THE REVENUE AUTHOR ITIES. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(APPEALS) AND DELETE THE ADDITION. ITA NO.108/BANG/2016 PAGE 5 OF 5 10. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JUNE, 2016. SD/- (SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE, DATED, THE 30 TH JUNE, 2016. /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.