ITO, Wd 2(1), Pune, Pune V. Smt. Kamal Amolakchand Bhandari (HUF), Pune

ITA 1286/PUN/2009

• Counselvise Citation: 128624514 RSA 2009
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 1998-1999
• Appeal Filed On: 06-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Search and seizure; Valuation report
• Section: 69C; 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI G.S. PANNU (AM) ITA NO.1286/PN/2009 (ASSTT. YEAR : 1998-99) INCOME TAX OFFICER, WD 2(1), PUNE ... APPEL LANT V. SMT KAMAL AMOLAKCHAND BHANDARI (HUF) , RESPONDENT 635/9A CLASSIC APPARTMENT, BIBEWADI, PUNE-411037 PAN : NOT AVAILABLE ITA NO.1284/PN/2009 (ASSTT. YEAR : 1998-99) INCOME TAX OFFICER, WD 2(1), PUNE ... APPELLANT V. SMT SUVERNA AMOLAKCHAND BHANDARI (HUF), RESPONDENT 635/9A CLASSIC APPARTMENT, BIBEWADI, PUNE-411037 PAN : NOT AVAILABLE APPELLANT BY : SHRI SANTOSH KUMAR RESPONDENT BY : NONE ORDER PER I.C. SUDHIR, JM ITA NO. 1286/PN/2009 THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER O N SEVERAL GROUNDS. GROUND NO. 1 IS GENERAL IN NATURE. GROUN D NOS. 2 TO 9 INVOLVE A COMMON ISSUE AS TO WHETHER THE LD CIT(A) HAS ERRE D IN DELETING THE ADDITION OF RS.17,02,107/- MADE BY THE A.O U/S. 68 OF THE ACT ON ACCOUNT OF DISALLOWANCE OF CLAIMED RECEIPT OF THE AMOUNT OU T OF SALE OF DIAMONDS DECLARED IN VDIS. THE GROUND NOS. 10 TO 11 INVOLVE THE ISSUE AS TO WHETHER LD CIT(A) HAS ERRED IN DELETING THE ADDITI ON OF RS. 1,70,211/- MADE BY THE A.O U/S. 69C OF THE ACT TOWARDS UNEXPLA INED EXPENDITURE. ITA . NO1284 & 1286/PN/2009 SMT KAMAL A BHANDARI ETC. A.Y 1998-99 PAGE OF 5 2 2. HAVING GONE THROUGH THE FIRST APPELLATE ORDER ON THE ISSUE RAISED IN GROUND NOS. 2 TO 9, WE FIND THAT LD CIT(A) HAS DEC IDED IT IN FAVOUR OF THE ASSESSEE RESPECTFULLY FOLLOWING THE DECISION OF HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S. INDER V. NANKANI IN ITA NO . 128 OF 2009 AND IN THE CASE OF CIT V/S. UTTAMCHAND JAIN IN ITA NO. 634 OF 2009 AND OTHERS. THE RELEVANT FACTS ARE THAT THE ASSESSEE HAD DISC LOSED UNDISCLOSED INCOME OF RS. 24,25,000/- UNDER VDIS 97 CONSISTIN G OF DIAMONDS WORTH RS. 5,49,682/-, GOLD JEWELLERY OF RS. 11,82,074/- AND CASH OF RS. 6,93,244/-. ON THE BASIS OF SEARCH AND SEIZURE ACT ION IN THE CASE OF SHRI KAMAL KUMAR JOHARI CA OF MUMBAI, THE A.O. NOTICED T HAT HE ALONG WITH SHRI HARI OM SHARMA CA AND THEIR RELATIVE OR ASSOC IATE CONCERNS WERE INDULGING IN SHOWING PURCHASES OF DIAMONDS DISCLOS ED UNDER VDIS1997 BY VARIOUS PERSONS AND SUBSEQUENTLY, THE SAME WERE SHOWN AS SOLD IN CASH ON RETAIL BASIS TO SOME IDENTIFIABLE PERSONS FROM SURAT. SUCH SALE PROCEEDS WERE THEN DEPOSITED IN BANK ACCOUNTS OPE NED IN THE NAME OF THE GROUP CONCERNS OF THESE PERSONS AND, AFTER ROUT ING THE MONEY THROUGH VARIOUS BANK ACCOUNTS, CHEQUE/ DEMAND DRAFT S WERE ISSUED TO BENEFICIARIES I.E. SO CALLED DECLARANT UNDER VDIS1 997. ON THE BASIS OF EVIDENCES FOUND, THE A.O NOTED THAT SMT. KOMAL AMOL ACHAND BHANDARI, THE PRESENT ASSESSEE WAS ONE OF THE BENEFICIARIES , WHO HAD RECEIVED THE SALE PROCEEDS IN RESPECT OF THE BOGUS SALES OF THE NON-EXISTING DIAMONDS. THE A.O ACCORDINGLY FRAMED ASSESSMENT U/S. 143(3) R EAD WITH SECTION 147 OF THE ACT WITH THIS FINDING THAT THE RECEIPT O F MONEY BY THE ASSESSEE SHOWN TO HAVE BEEN OUT OF SALES OF DIAMOND WAS NOTH ING BUT HER UNACCOUNTED CASH. THE LD CIT(A) HAS DELETED THE A DDITION OF RS. 17,02,107/- SO MADE BY THE A.O FOLLOWING THE AFORE- CITED DECISIONS. ITA . NO1284 & 1286/PN/2009 SMT KAMAL A BHANDARI ETC. A.Y 1998-99 PAGE OF 5 3 3. WE FIND FROM THE FIRST APPELLATE ORDER THAT THE LD CIT(A) ON THE ISSUE HAS NOTED SOME UNDISPUTED MATERIAL FACTS THA T DIAMONDS FROM SALE OF WHICH, INCOME UNDER THE HEAD CAPITAL GAINS HAS BEEN SHOWN BY THE ASSESSEE WERE DECLARED UNDER THE VDIS 1997; THE CO PY OF VALUATION REPORT OF GOVERNMENT APPROVED VALUER IN RESPECT OF THE VARIOUS ITEMS OF JEWELLERY, THEIR DESCRIPTION, THEIR WEIGHT ETC., WA S ALSO FILED WITH THE A.O AND DURING THE APPELLATE PROCEEDINGS, THE CERTIFICA TE UNDER VDIS ISSUED BY THE LD CIT WAS ALSO FURNISHED. AS A RESULT OF THE DECLARATION, DUE TAX THEREON HAS BEEN PAID AS PER THE SCHEME AND SEARCH DISCLOSURE HAS BEEN ACCEPTED BY THE CONCERNED CIT AND A CERTIFICATE UND ER THE VDIS WAS ISSUED TO THE ASSESSEE. THE ASSESSEE CLAIMED TO HA VE SOLD THE DIAMONDS TO M/S. GALAXY EXPORTS AND SALE PROCEEDS OF WHICH H AVE BEEN RECEIVED THROUGH CHEQUES. IN SUPPORT OF ITS CLAIM REGARDING SALE OF DIAMONDS, THE ASSESSEE HAD FURNISHED COPIES OF BILLS AND PARTIES BOOKS BEFORE THE A.O. UNDER SIMILAR FACTS AND CIRCUMSTANCES, THE HONBLE BOMBAY HIGH COURT IN THE ABOVE CITED CASES, HAS DECIDED AN IDENTICAL ISS UE IN FAVOUR OF THE ASSESSEES THEREIN. RESPECTFULLY FOLLOWING THOSE DE CISIONS, WE ARE OF THE VIEW THAT LD CIT(A) HAS RIGHTLY DELETED THE ADDITIO N IN QUESTION IN FAVOUR OF THE ASSESSEE. THE SAME IS UPHELD. GROUND NOS. 2 TO 9 INVOLVING THE ISSUE ARE THUS REJECTED. GROUND NOS. 10 AND 11 4. IT IS CONSEQUENTIAL IN NATURE AS THE A.O HAD MADE ADDITION OF RS. 1,70,211/- ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S. 69C OF THE ACT ON THE BASIS THAT THE ASSESSEE MUST HAVE INCURRED THE COMMISSION EXPENDITURE IN MANAGING THE RECEIPT OF RS. 17,02,107/- OUT OF SALE OF DIAMOND T O M/S. GALAXY EXPORTS. IN VIEW OF OUR DECISION ON THE MAIN ISSUE INVOLVED IN GROUND NOS. 2 TO 9 HEREINABOVE, WE ARE ITA . NO1284 & 1286/PN/2009 SMT KAMAL A BHANDARI ETC. A.Y 1998-99 PAGE OF 5 4 OF THE VIEW THAT LD CIT(A) HAS RIGHTLY DELETED THE ADDITION OF RS.1,70,211/-. THE GROUND NOS. 10 AND 11 ARE ACCORDINGLY REJECTED. 5. CONSEQUENTLY, APPEAL IS DISMISSED. ITA NO. 1284/PN/2009 6. IN THIS APPEAL ALSO, SIMILAR ISSUES HAVE BEEN RA ISED IN GROUND NOS. 2 TO 11 WHILE QUESTIONING THE ACTION OF THE LD CIT(A) BY T HE REVENUE IN DELETING RS. 19,28,635/- DISALLOWED BY THE A.O DOUBTING THE GENU INENESS OF THE CLAIMED SALE RECEIPT OF DIAMOND BY THE ASSESSEE DECLARED IN VDI S (GROUND NOS. 2 TO 9) AND INDELETING RS.1,19,864/- ADDED BY THE A.O U/S. 69C OF THE ACT TOWARDS UNEXPLAINED EXPENDITURE INCURRED IN PROCURING THE ABOVE RECEIP TS (GROUND NOS. 10 AND 11). OTHER GROUNDS I.E. 1, 12, AND 13 ARE GENERAL IN NAT URE. 7. SIMILAR FACTS ARE INVOLVED IN THIS CASE AS WE HA VE DISCUSSED HEREINABOVE IN THE CASE OF SMT. KAMAL A. BHANDARI. WE THUS FOLLO WING THE DECISION ON IDENTICAL ISSUES, RAISED IN GROUND NO.2 TO 9 AND 10 & 11 IN T HE CASE OF SMT. KAMAL A. BHANDARI DECIDE THE ISSUES IN FAVOUR OF THE ASSESSE E UPHOLDING THE FIRST APPELLATE ORDER IN THIS REGARD. THE GROUNDS 2 TO 11 ARE ACCO RDINGLY REJECTED. CONSEQUENTLY, APPEAL IS DISMISSED. 8. IN RESULT, BOTH THE APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2011. SD/- SD/- ( G.S. PANNU ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 30TH JUNE, 2011 US COPY OF THE ORDER IS FORWARDED TO : ITA . NO1284 & 1286/PN/2009 SMT KAMAL A BHANDARI ETC. A.Y 1998-99 PAGE OF 5 5 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-II, PUNE 4. THE CIT(A)- II, PUNE 5. THE D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE