Manjumala R. Sharma, Hubli V. ITO, Hubli

ITA 137/BANG/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0262 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-06-2016
• Assessment Year: 1998-1999
• Appeal Filed On: 05-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS JT
• Assessee Lawyers: SHANTILAL R JAIN
• Keywords: Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.137/BANG/2016 ASSESSMENT YEAR : 1998-99 SMT. MANJUMALA R. SHARMA, PROP: M/S. SWASTIK PLYWOOD, NEW COTTON MARKET, LUTIMATH BUILDING, HUBLI. PAN: AGZPS 6792E VS. THE INCOME TAX OFFICER, WARD 2(2), HUBLI. APPELLANT RESPONDENT APPELLANT BY : SHRI SHANTILAL R. JAIN, CA RESPONDENT BY : SMT. SWAPNA DAS, JT. CIT(DR) DATE OF HEARING : 30.06.2016 DATE OF PRONOUNCEMENT : 04.07.2016 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(APPEALS), HUBLI DATED 18.11.2015 FOR THE ASSESS MENT YEAR 1998-99 INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE LEARNED CIT (APPEALS) HAS FAILED TO READ P ROPERLY, 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 . ITA NO.137/BANG/2016 PAGE 2 OF 5 2. WHILE PASSING THE ORDER THE LEARNED CIT (APPEALS ) HAS HELD THAT SA L E I S NOT PROVED. THESE CLEARLY UNDO THE CONCLUSION DRAWN BY THE HONORABL E HI G H COURT REGARDING SALE TRANSACTION. 3. IN THE ORDER THE LEARNED CIT (APPEALS) HAS NOT GIVEN ANY CONCRETE RE A SO N S TO REJECT THE EVIDENCE PRODUCED IN SUPPORT OF THE FACT THAT THE ASSET S S OLD ARE THE SAME ASSETS AS DECLARED UNDER VDIS1997 , THOUGH IN DIFFERENT FORM. 4. THE APPELLANT CRAVES LEAVE TO ADD , ALTER , MODIFY, DELETE OR S UB S TITUTE A N Y OR ALL OF THE GROUNDS AND TO FILE A PAPER BOOK AT T HE TIME OF HEARING TH E APPEAL. IN VIEW OF THE ABOVE AND OTHER WRITTEN SUBMISSION T HAT MAY BE M A DE DURING THE COURSE OF HEARING, IT IS PRAYED TO HOLD THAT: 1) THE ASSETS SOLD ARE THE SAME ASSETS , MA Y NOT BE IN THE SAME FORM , WHICH ARE DECLARED UNDER VDIS 1997. AND 2) THE ADDITION OF RS 10,75,000/- MADE ON ABOVE ACCOUNT BE DELETED. 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 SLIVER AND DIAMONDS WHICH WERE DECLARED UNDER VOLUNTARY DISCLO SURE 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 SILVE R AND DIAMONDS. IT WAS ALSO CONTENDED BY THE ASSESSEE THAT UNDER VDIS, THE ASSESSEE HAS DECLARED THE SILVERWARE AND DIAMONDS. THE DECLARAT ION WAS ACCEPTED UNDER VDIS AND LATER ON SILVERWARE WAS CONVERTED IN TO SILVER BULLION AND DIAMONDS WHICH WERE SOLD AND THE SALE PROCEEDS WERE INTRODUCED IN THE ITA NO.137/BANG/2016 PAGE 3 OF 5 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 SILVERWARE AND DIAMOND JEWELLERY INTO SILVER BULLION AND DIAMONDS. THE WE IGHT OF SILVER BULLION IS THE SAME. THE AO DID NOT ACCEPT THE CONTENTIONS OF THE ASSESSEE AND AGAIN MADE THE ADDITION. THOUGH THE ASSESSEE HAS TRIED T O EXPLAIN THE FACTS WITH DETAILS, BUT IT WAS NOT ACCEPTABLE TO THE CIT(APPEA LS). 6. BEFORE THE TRIBUNAL, THE ASSESSEE HAS FILED A CO PY OF THE VALUATION REPORT, VDIS CERTIFICATE, COPY OF SALE OF SILVER BU LLION AND DIAMONDS AND THE EVIDENCE OF CONVERSION OF SILVERWARE INTO SILVE R BULLION AND DIAMONDS. FROM THIS EVIDENCE, THE ASSESSEE HAS TRIED TO EXPLA IN THAT THE SAME QUANTITY OF SILVER AND DIAMOND WHICH WAS DECLARED U NDER 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). ITA NO.137/BANG/2016 PAGE 4 OF 5 8. HAVING CAREFULLY EXAMINED THE ORDERS OF LOWER AU THORITIES AND DOCUMENTS PLACED ON RECORD IN THE LIGHT OF RIVAL SU BMISSIONS, I FIND THAT THE SAME QUANTITY OF SILVER AND DIAMONDS WHICH WERE DEC LARED UNDER VDIS WAS SOLD. THOUGH THE ASSESSEE HAS DECLARED THE SILVERW ARE IN DIFFERENT FORM UNDER VDIS, BUT IN SALE BILL THE ASSESSEE HAS SOLD SILVER BULLION AND DIAMONDS SEPARATELY. THE ASSESSEE HAS FILED EVIDEN CE WITH RESPECT TO CONVERSION OF SILVERWARE INTO SILVER BULLION AND DI AMONDS. 9. SINCE THE SAME QUANTITY WHICH WAS DISCLOSED UND ER VDIS WAS SOLD, I FIND NO JUSTIFICATION IN MAKING THE ADDITION ON I NTRODUCTION OF SALE PROCEEDS IN THE BOOKS OF ACCOUNT. ONCE THE REVENUE HAS ACCE PTED THE DECLARATION UNDER VDIS AND ACCEPTED THE TAX DEPOSITED BY THE AS SESSEE, IT SHOULD NOT HAVE MADE A FURTHER ADDITION ON ACCOUNT OF INTRODUC TION OF SALE PROCEEDS OF THE SAID JEWELLERY IN THE BOOKS OF ACCOUNT. I THER EFORE FIND NO MERIT IN THE ADDITION MADE BY THE REVENUE AUTHORITIES. ACCORDIN GLY, I SET ASIDE THE ORDER OF THE CIT(APPEALS) AND DELETE THE ADDITION. 10. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF JULY, 2016. SD/- (SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE, DATED, THE 4 TH JULY, 2016. /D S/ ITA NO.137/BANG/2016 PAGE 5 OF 5 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.