Smt. Pushpadevi P Jain, Hubli V. ITO, Hubli

ITA 217/BANG/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0282 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 1998-1999
• Appeal Filed On: 19-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS
• Assessee Lawyers: S V RAVISHANKAR
• Keywords: Business income; Valuation report
• Section: 234B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL BANGALORE BENCH B, BANGALORE BEFORE SHRI A.K.GARODIA, AM (SMC) ITA NO.217 (B)/2016 (ASSESSMENT YEAR : 1998-99) SMT. PUSHPADEVI P JAIN, DHANALAXMI ENTERPRISES, NEW GABBUR, PB ROAD, HUBALLI PAN NO.AERPJ0549N APPELLANT VS THE INCOME TAX OFFICER, WARD-1(4), HUBBALLI RESPONDENT ASSESSEE BY : SHRI S.V.RAV ISHANKAR, ADVOCATE REVENUE BY : SMT. SWAPNA DAS, JCIT DATE OF HEARING : 05-07-2016 DATE OF PRONOUNCEMENT : 15-07 -2016 O R D E R PER SHRI A.K.GARODIA, AM: THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORD ER OF THE LD.CIT(A), HUBLI DATED 30-11-2015 FOR THE ASSESSMEN T YEAR 1998-99. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER; 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. 6,17,400/-AGAINST THE DECLARED TOTAL INCOME OF RS.56,670- ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 3 THE LEARNED CIT (A) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.5,60,730/- UNDER SECTION 68 OF ITA NO.217(B)/2016 2 THE ACT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 4 THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMIN G THE FINDING OF THE AO THAT THE NOMENCLATURE AS PER THE DECLARATION DIFFERED FROM THE SALE INVOICE AND HENCE THE SAID SALE WAS OUT OF DIAMONDS 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 TO ARRIVE AT A FINDING THAT THE DECLARATION STOOD UNPROVED AND HENCE THE DIAMONDS SOLD WERE NOT OUT OF THE DECLARATION MADE. 6 THE LEARNED CIT(A) WAS NOT JUSTIFIED ON FACTS IN 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 WITH THE HON'BLE CHIEF COMMISSIONER OF INCOME TAX/DIRECTOR GENERAL OF INCOME TAX, THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST UNDER SECTION 234B OF THE ACT WHICH UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE DESERVES TO BE CANCELLED. THE CALCULATION OF INTEREST UNDER SECTION 234B IS NOT IN ACCORDANCE WITH LAW AS THE RATE, AMOUNT AND METHOD FOR CALCULATING INTEREST IS NOT DISCERNIBLE FROM THE ORDER OF ASSESSMENT. 8 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 . 9 IN VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE TAKEN AT THE TIME OF THE HEARING THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. ITA NO.217(B)/2016 3 3. IT WAS SUBMITTED BY THE LD.AR OF THE ASSESSEE T HAT THIS MATTER REACHED UP TO THE HONBLE HIGH COURT OF KARNATAKA I N THE FIRST ROUND AND AS PER THE JUDGMENT OF THE HONBLE KARNATAKA HI GH COURT IN ITA NO.212/2004 DATED 22-09-2008, COPY SUBMITTED BY THE LD. AR OF THE ASSESSEE, HONBLE HIGH COURT RESTORED THE MATTER TO THE FILE OF THE AO FOR FRESH DECISION BY FOLLOWING ANOTHER DETAILED JU DGMENT RENDERED IN ITA NO. 186/2004 DATED 22.09.2008IN WHICH IT WAS DI RECTED THAT IF THE ASSESSEE IS ABLE TO PROVE THAT THE GOODS THAT ARE S OLD UNDER THE TRANSACTIONS DECLARED IN THE REGULAR RETURN ARE THE SAME GOODS WHICH WERE DECLARED IN THE APPLICATION FILED UNDER THE VD IS SCHEME 1997 AND ACCEPTED BY THE REVENUE THEN THE QUESTION OF TAXING THE TRANSACTIONS DECLARED IN THE REGULAR RETURNS U/S 68 OF THE IT AC T WOULD NOT ARISE AND TAX HAS TO BE IMPOSED U/S 45 OF THE IT ACT, 1961. HE SUBMITTED THAT IN THE PRESENT PROCEEDINGS, THE AO AND THE LD. CIT(A) HAS REPEATED THE SAME ADDITION AND THEREFORE, THE ADDITION MADE BY T HE LOWER AUTHORITIES IS NOT JUSTIFIED AND THE SAME SHOULD BE DELETED. HE ALSO SUBMITTED COPY OF TWO TRIBUNAL ORDERS RENDERED IN THE CASE OF SHRI SHJYAM B HABIB VS ITO IN ITA NO.819B)/2016 DATED 30-06-2016 AND IN TH E CASE OF SMT UMABAI M KOTHARI VS ITO IN ITA NO.86,106 & 268(B)/2 016 AND PLACED RELIANCE ON THE SAME. 4. THE LD. DR OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HE ALSO SUBMITTED THAT IN HIS ORDER, A CLEAR FINDING HAS BEEN GIVEN BY THE LD. CIT(A) THAT WHAT IS SOLD UNDER THE SALE TRANSACTIONS AND CLAIMED BY THE ASSESSEE AND WHAT I S DECLARED IN THE ITA NO.217(B)/2016 4 APPLICATION FILED UNDER VDIS 1997 ARE DIFFERENT. S HE SUBMITTED THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD. CIT (A). 5. AT THIS JUNCTURE, A QUERY WAS RAISED BY THE BEN CH REGARDING SALE BILL AND VALUATION REPORT SUBMITTED WITH VDIS DECLARATION STATEMENT. IN REPLY, IT WAS SUBMITTED BY THE LD. A R OF THE ASSESSEE THAT THE JEWELLERY DECLARED UNDER VDIS 1997 WERE CONVERT ED INTO GOLD AND DIAMONDS AS PER THE CONVERSION BILL AVAILABLE ON PA GE 6 OF THE PAPER BOOK RESULTING INTO GOLD OF 475 GRAMS AND DIAMOND D ECLARED IS 15.5 CARATS AND THE SALE BILL IS ON PAGES 7 TO 8 OF THE PAPER BOOK. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT THE DIRECTION OF THE HONBLE HIGH COURT IN THE CASE OF ASSESSEE ITSELF IS THIS THAT IF THE ASSESSEE IS ABLE TO ESTABLISH THAT THE ITEMS SOLD IN THE PRESENT YEAR IS THE SAME WHICH WAS DECLARED BY THE ASSESSEE UNDER VDIS 1997 THEN NO ADDITION CAN BE MADE U/S 68 OF TH E IT ACT, 1961 IN THE PRESENT YEAR. HENCE IN THE LIGHT OF THE DIRECTI ON OF THE HONBLE KARNATAKA HIGH COURT, I EXAMINE THE FACTS OF THE PR ESENT CASE. AS PER THE VALUATION REPORT SUBMITTED BY THE LD. AR BEING COPY SUBMITTED WITH THE DECLARATION UNDER VDIS 1997 AS AVAILABLE ON PAG E-4 OF THE PAPER BOOK, THE ASSESSEE HAS MADE DECLARATION OF DIAMONDS AS UNDER; SL.NO CARATS PIECES AMOUNT 1. 8.50 85 68,000 2. 7.00 70 42,000 3. NET WEIGHT OF GOLD 578.160 GMS. 123, 360 TOTAL.. 2,33,360 ITA NO.217(B)/2016 5 7. ON PAGES 7 & 8 OF THE PAPER BOOK, SALE BILLS AR E NOT AVAILABLE AS PER PAGE NO. 2 OF THE ORIGINAL ASSESSMENT ORDER AVAILABLE ON PAGE 8 OF THE PAPER BOOK, OUT OF RS. 560,730/- BEING TOTAL SALES CONSIDERATION, SALE OF GOLD IS FOR RS. 185,730/- AND SALE OF DIAMO NDS IS FOR RS. 375,000/-. REGARDING SALE PROCEEDS OF GOLD, I AM OF THE OPINION THAT SINCE GOLD JEWELLERY WAS CONVERTED IN TO GOLD, ITS SALE FOR RS. 185,730/- SHOULD BE ACCEPTED AND RESULTANT LONG TERM CAPITAL LOSS ON SALE OF GOLD SHOULD BE ALLOWED. I DIRECT THE A.O. ACCORDINGLY BE CAUSE GOLD SOLD AND DECLARED UNDER VDIS CANNOT BE DIFFERENT AND THIS IS NOT THE CASE OF THE REVENUE THAT GOLD SOLD IS MORE THAT GOLD DECLARED U NDER VDIS 1997. 8. REGARDING DIAMONDS, MERE CARAT QUANTITY ALONE CA NNOT DETERMINE THAT THE DIAMOND SOLD AND DECLARED UNDER VDIS 1997 ARE SAME BECAUSE THE PRICE OF THE PRICE OF DIAMOND MAIN LY DEPENDS UPON QUALITY OF THE DIAMONDS BEING ITS CUT AND COLOUR AP ART FROM ITS SIZE. 9. REGARDING THIS SALE OF DIAMONDS FOR RS. 375,000 /-, I DO NOT KNOW THE SIZE AND THE CUT AND COLOUR OF DIAMONDS AR E ALSO NOT KNOWN BECAUSE THE SAME IS NOT MENTIONED IN THE VDIS DECLA RATION. HENCE IT IS SEEN THAT THE ASSESSEE HAS FAILED TO ESTABLISH THAT THE DIAMONDS SOLD IN THE PRESENT YEAR AND DECLARED UNDER VDIS ARE SAME. HENCE, I FEEL THAT NO INTERFERENCE IS CALLED FOR REGARDING ADDITION IN RESPECT OF SALE OF DIAMONDS OF RS. 375,000/-. 10. NOW I EXAMINE THE APPLICABILITY OF TWO TRIBUNA L ORDERS CITED BY THE LD.AR OF THE ASSESSEE. FIRST TRIBUNAL ORDER IS RENDERED IN THE ITA NO.217(B)/2016 6 CASE OF SHRI SHYAM B HABIB VS ITO (SUPRA) AND IN PA RA-5 OF THE TRIBUNAL ORDER, IT IS NOTED BY THE TRIBUNAL THAT TH E WEIGHT OF GOLD AND SILVER BULLION IS THE SAME BUT THERE IS NO SUCH FIN DING THAT EVEN IN THE ABSENCE OF SIZE, CUT AND COLOUR OF THE DIAMONDS, IT CAN BE ACCEPTED THAT THE DIAMOND SOLD AND DECLARED UNDER VDIS ARE SAME M ERELY ON THIS BASIS THAT CARAT QUANTITY IS TALLYING. HENCE, THIS TRIBUNAL ORDER CITED BY THE LD. AR OF THE ASSESSEE IS NOT APPLICABLE IN THE PRESENT CASE IN RESPECT OF DIAMONDS SALE. 11. AS PER THE SECOND JUDGMENT CITED BY THE LD. AR OF THE ASSESSEE RENDERED IN THE CASE OF SMT. UMABAI M.KOTH ARI (SUPRA), I FIND THAT IN THAT CASE, THERE WAS NO SALE OF DIAMOND AND THERE WAS ONLY SALE OF GOLD AND SILVER, WHEREAS IN THE PRESENT CASE, I HAVE DECIDED THE ISSUE ABOUT SALE OF GOLD IN FAVOUR OF THE ASSESSEE AND FOR THE DISPUTE REGARDING SALE OF DIAMOND, I HAVE SEEN THAT THE ASS ESSEE COULD NOT ESTABLISH THIS FACT THAT THE DIAMOND SOLD IN THE PR ESENT CASE IS THE SAME DIAMOND WHICH WAS DECLARED BY THE ASSESSEE UND ER VDIS DECLARATION 1997 BECAUSE THE ASSESSEE COULD NOT SHO W THAT THE SIZE, COLOUR AND CUT OF THE DIAMOND SOLD IN THE PRESENT Y EAR AND DIAMOND DECLARED UNDER THE VDIS DECLARATION ARE THE SAME AN D WITHOUT THAT, IT CANNOT BE ACCEPTED THAT THE DIAMOND IN QUESTION IS THE SAME ON THIS BASIS ALONE THE QUANTITY IN CARAT IS TALLYING BECAU SE THE PRICE OF THE DIAMOND IS MAINLY DETERMINED BY THE SIZE, COLOUR AN D CUT OF THE DIAMOND. HENCE, I HOLD THAT THIS TRIBUNAL ORDER IS ALSO NOT APPLICABLE IN RESPECT OF DIAMOND ISSUE IN THE PRESENT CASE. ITA NO.217(B)/2016 7 12. AS PER ABOVE DISCUSSION, I HAVE FOUND THAT NO NE OF THE TRIBUNAL ORDERS CITED ABOVE BY THE LD.AR OF THE ASS ESSEE IS RENDERING ANY HELP TO THE ASSESSEE IN RESPECT OF DIAMOND SALE ISSUE AND SINCE, THE ASSESSEE HAS FAILED TO ESTABLISH THIS FACT THAT THE DIAMONDS SOLD IN THE PRESENT YEAR ARE THE SAME DIAMONDS WHICH DECLAR ED BY THE ASSESSEE IN VDIS DECLARATION 1997 AS DIRECTED BY TH E HONBLE KARNATAKA HIGH COURT AND THEREFORE, I FIND NO REASO N TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) IN RESPECT OF DIAMOND IS SUE. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MEN TIONED IN CAPTIONED PAGE. SD/- (A.K.GARODIA) ACCOUNTANT MEMBER D A T E D : 15- 07-2016 PLACE: BANGALORE AM COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER AR, ITAT, BANGALORE ITA NO.217(B)/2016 8 1. DATE OF DICTATION .. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P. S. .. 4 DATE ON WHICH THE ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE ORDER C OMES BACK TO THE SR. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO . 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER DOES FOR XEROX & ENDORSEMENT . 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. 11 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER. 12 THE DATE ON WHICH THE FILE GOES TO THE DISPATCH SECTION FOR DISPATCH OF THE TRIBUNAL ORDER 13 DATE OF DISPATCH OF ORDER