Kanchanbai M Jain, Hubli V. ITO, Hubli

ITA 133/BANG/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0258 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 24 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: 05-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NOS.133 & 134/BANG/2016 ASSESSMENT YEAR : 1998-99 SMT. KANCHANBAI M. JAIN, C/O. M.M. JAIN, 101/102, ARIHANT NAGAR, KUSUGAL ROAD, KESWAPUR, HUBLI. PAN: ABCPJ 7844Q LATE SHRI MILAPCHAND M. JAIN, BY LEGAL HEIR SMT. KANCHANBAI M. JAIN, C/O. M.H. JAIN & CO., GANESH PETH, HUBLI. PAN: ABSPJ 8703E VS. THE INCOME TAX OFFICER, WARD 1(3), NAVANAGAR, HUBLI. APPELLANTS RESPONDENT APPELLANT BY : SHRI VINAY KULKARNI, CA 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 THESE APPEALS ARE PREFERRED BY THE ASSESSEES AGAIN ST THE SEPARATE ORDERS OF THE CIT(APPEALS), HUBLI, BOTH DATED 30.11 .2015 FOR THE ASSESSMENT YEAR 1998-99 INTER ALIA ON THE FOLLOWING IDENTICAL GROUNDS:- ITA NOS.133 & 134/BANG/2016 PAGE 2 OF 5 1. THE LEARNED CIT (APPEALS) HAS FAILED TO READ PR OPERLY, WHICH IS ALSO THE CASE WITH THE LEARNED ASSESSING O FFICER, THE DIRECTION GIVEN TO THE DEPARTMENT BY THE HON'BLE HI GH COURT AND PROCEEDED TO UPHOLD THE ORDER OF THE ASSESSING OFFI CER WITHOUT APPRECIATING THE DOCUMENTARY AS WELL AS CIRCUMSTANT IAL EVIDENCE AVAILABLE BEFORE HIM. 2. WHILE PASSING THE ORDER THE LEARNED CIT (APPEALS ) HAS HELD THAT SALE IS NOT PROVED. THIS CLEARLY UNDOES T HE CONCLUSION DRAWN BY THE HONORABLE HIGH COURT REGARDING SALE TR ANSACTION. 3. IN THE ORDER THE LEARNED CIT (APPEALS) HAS NOT G IVEN ANY CONCRETE REASONS TO REJECT THE EVIDENCE PRODUCED IN SUPPORT OF THE FACT THAT THE ASSETS SOLD ARE THE SAME ASSETS AS DE CLARED UNDER VDIS 1997, THOUGH IN DIFFERENT FORM. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY , DELETE OR SUBSTITUTE ANY OR ALL OF THE GROUNDS AND TO FILE A PAPER BOOK AT THE TIME OF HEARING THE APPEAL. IN VIEW OF THE ABOVE AND OTHER WRITTEN SUBMISSION T HAT MAY BE MADE DURING THE COURSE OF HEARING, IT IS PRAYED TO HOLD THAT: 1. THE ASSETS SOLD ARE THE SAME ASSETS, MAY NOT BE IN THE SAME FORM, WHICH ARE DECLARED UNDER VDIS 1997. AND 2. THE ADDITION OF RS 7,51,788/- MADE ON ABOVE ACCOUNT BE DELETED (ITA NO.133/BANG/2016) 3. THE ADDITION OF RS 13,61,990/- MADE ON ABOVE ACCOUN T BE DELETED (ITA NO.133/BANG/2016). 2. THOUGH VARIOUS GROUNDS ARE RAISED, BUT THEY ALL RELATE TO INTRODUCTION OF CASH IN THE BOOKS OF ACCOUNTS OF THE ASSESSEES O N SALE OF GOLD & DIAMONDS (ITA 133/BANG/2016) AND ON SALE OF SLIVER AND DIAMONDS (ITA NO.134/BANG/2016), WHICH WERE DECLARED UNDER VOLUNT ARY DISCLOSURE OF INCOME SCHEME, 1997 (VDIS). ITA NOS.133 & 134/BANG/2016 PAGE 3 OF 5 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTED THAT CERTAIN INTRODUCTION OF CASH WAS EXP LAINED BY THE ASSESSEES TO HAVE BEEN INTRODUCED ON ACCOUNT OF SALE OF GOLD JEWELLERY & DIAMONDS AND SILVER & DIAMONDS RESPECTIVELY. IT WAS ALSO CON TENDED BY THE ASSESSEE THAT UNDER VDIS, THE ASSESSEES HAVE DECLARED THE GO LD ORNAMENTS/JEWELLERY & DIAMONDS STUDDED WITH GOLD AS WELL AS THE SILVER AND DIAMONDS. THE DECLARATION WAS ACCEPTED UNDER V DIS AND LATER ON GOLD JEWELLERY WAS CONVERTED INTO GOLD BULLION AND SEPARATE DIAMONDS AS WELL AS SILVER UTENSILS WERE CONVERTED INTO SILVER BULLION & SEPARATE DIAMONDS WHICH WERE SOLD AND THE SALE PROCEEDS WERE INTRODUCED IN THE BOOKS OF ACCOUNT. THE AO HAS RAISED A TECHNICAL OB JECTION BY STATING THAT THE ITEMS DECLARED UNDER VDIS WERE NOT THE SAME, WH ICH WERE SOLD AND THE SALE PROCEEDS WERE INTRODUCED IN THE BOOKS OF ACCOU NT. 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 AND DIAMONDS. THE WEIGHT OF GOLD BULLION A ND THE DIAMONDS WERE THE SAME. THE AO DID NOT ACCEPT THE CONTENTIONS OF THE ASSESSEE AND ITA NOS.133 & 134/BANG/2016 PAGE 4 OF 5 AGAIN MADE THE ADDITIONS. THOUGH THE ASSESSEE HAS TRIED TO EXPLAIN THE FACTS WITH DETAILS, BUT IT WAS NOT ACCEPTABLE TO TH E CIT(APPEALS). 6. BEFORE THE TRIBUNAL, THE ASSESSEES HAVE FILED A COPY OF THE VALUATION REPORT, VDIS CERTIFICATE, COPY OF SALE OF DIAMOND AND GOLD BULLION/COPY OF SALE OF SILVER BULLION AND DIAMONDS AND THE EVIDENCE OF CONVERSION OF GOLD JEWELLERY INTO GOLD BULLION/SILV ER UTENSILS INTO SILVER BULLION AND DIAMONDS. FROM THIS EVIDENCE, THE ASSE SSEES HAVE TRIED TO EXPLAIN THAT THE SAME QUANTITY OF GOLD/SILVER WHICH WERE DECLARED UNDER VDIS WERE SOLD. SIMILAR IS THE POSITION IN RESPECT OF DIAMONDS ALSO. 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/SILVER AND DIAMONDS WHICH WERE DECLARED UNDER VDIS WERE SOLD. THOUGH THE ASSESSEE HAS DECLARED T HE GOLD JEWELLERY STUDDED WITH DIAMONDS/SILVER AND DIAMONDS IN DIFFER ENT FORM UNDER VDIS, BUT IN SALE BILL THE ASSESSEES HAVE SOLD GOLD BULLI ON/SILVER BULLION AND DIAMONDS SEPARATELY. THE ASSESSEES HAVE FILED EVID ENCE WITH RESPECT TO CONVERSION OF GOLD JEWELLERY INTO GOLD BULLION/CONV ERSION OF SILVER UTENSILS INTO SILVER BULLION AND DIAMONDS. ITA NOS.133 & 134/BANG/2016 PAGE 5 OF 5 9. SINCE THE SAME QUANTITY WHICH WERE DISCLOSED UND ER VDIS WERE SOLD, WE FIND NO JUSTIFICATION IN MAKING THE ADDITI ON 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 ADDITIONS MADE BY THE REVENUE AUTHO RITIES. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(APPEALS) AND DELETE THE ADDITION. 10. IN THE RESULT, THE APPEALS BY THE ASSESSEES ARE ALLOWED. 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.