ACIT, Cir.-5, Pune V. Anita H. Bhandari, Pune

ITA 263/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56418 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-08-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 15-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTUAMA
• Assessee Lawyers: S N DOSHI
• Keywords: Search and seizure; Valuation report
• Section: 143(3); 147; 148

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. 263/PN/2010 (ASSTT. YEAR: 1998-99) ASST. COMMISSIONER OF INCOME TAX , ... APPELLANT CIRCLE -5, PMT BLDG. 3 RD FLOOR, SWARGATE, PUNE 411 037 V. ANITA H. BHANDARI RESPONDENT 375/376, SHUKRAWAR PETH, PUNE 411002 PAN : NOT AVAILABLE C.O. NO. 11/PN/2011 (ARISING OUT OF ITA NO. 263/PN/2010) (ASSTT. YEAR: 1998-99) ANITA H. BHANDARI CROSS OBJECTOR 375/376, SHUKRAWAR PETH, PUNE 411002 PAN : ABGPB 3881 R. V. ASST. COMMISSIONER OF INCOME TAX, ... RESPONDENT CIRCLE -5, PMT BLDG. 3 RD FLOOR, SWARGATE, PUNE 411 037 ASSESSEE BY : SHRI S.N. DOSHI DEPARTMENT BY : MS. ANN KAPTUAMA ORDER PER I.C. SUDHIR, JM THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER M AINLY ON THE GROUND THAT THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 21,04,011/-. 2. AT THE OUTSET OF HEARING THE LD. A.R. SUBMITTED THAT THE ISSUE RAISED IN THE GROUND IS FULLY COVERED BY THE DECISION OF PUNE B ENCH OF THE TRIBUNAL IN THE CASE OF ITA . NO 263/PN/2010 & C.O.11/PN/2011 ANITA H. BHANDARI A.Y. 1997-99 PAGE OF 5 2 ITO VS. SMT. KAMAL AMOLAKCHAND BHANDARI (HUF) AND S MT. SUVERNA AMOLAKCHAND BHANDARI (HUF) ITA NOS. 1286 & 1284/PN/09 (A.Y. 19 98-1999), A GROUP CASES WHEREIN VIDE ITS ORDER DATED 30.6.2011, AN IDENTICA L ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEES. 3. THE LD. D.R. ON THE OTHER HAND TRIED TO JUSTIFY THE ASSESSMENT ORDER. 4. HAVING GONE THROUGH THE ABOVE CITED DECISION, WE FIND THAT THE ISSUE RAISED UNDER SIMILAR FACTS IN THE PRESENT CASE HAS BEEN DE CIDED IN FAVOUR OF THE ASSESSEES. 5. IN THE PRESENT CASE AS WELL, THE A.O ON THE BASI S OF OBSERVATION MADE IN THE SEARCH CASE OF SHARMA AND JOHRI GROUP THAT BOGUS PU RCHASES OF DIAMOND JEWELLERY DECLARED UNDER VDIS 1997 WAS MADE BY GALAXY EXPOR T FROM VARIOUS DECLARANTS AND THE ASSESSEE WAS ONE OF THEM, ISSUED NOTICE U/S 148 AND MADE ASSESSMENT U/S. 147 READ WITH S. 143(3) OF THE ACT HOLDING THAT THERE W AS NO ACTUAL SALE OF DIAMONDS TO GALAXY EXPORTS AND THE ASSESSEE HAD OBTAINED BOGUS SALE CERTIFICATE FOR SALE OF NON- EXISTENT DIAMONDS DECLARED UNDER VDIS 1997 AND AC CORDINGLY ADDED THE ENTIRE SALE PROCEEDS OF DIAMOND WORTH RS. 21,04,011/- IN THE TA XABLE INCOME OF THE ASSESSEE. FOLLOWING CITED DECISIONS BEFORE IT, THE LD. CIT(A) HAS DELETED THE ADDITION. 6. UNDER ALMOST SIMILAR FACTS AND CIRCUMSTANCES, TH E PUNE BENCH OF THE TRIBUNAL IN THE AFORE-CITED CASES OF ITO VS. SMT. KAMAL AMOL AKCHAND BHANDARI (HUF) AND SMT. SUVERNA AMOLAKCHAND BHANDARI (HUF) (SUPRA), HA S DECIDED AN IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE WITH THE FOLLOWING FINDIN GS IN PARA NOS. 2 AND 3 : 2. HAVING GONE THROUGH THE FIRST APPELLATE ORDER O N THE ISSUE RAISED IN GROUND NOS. 2 TO 9, WE FIND THAT LD CIT(A ) HAS DECIDED IT IN FAVOUR OF THE ASSESSEE RESPECTFULLY FOLLOWING TH E DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S. I NDER 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. ITA . NO 263/PN/2010 & C.O.11/PN/2011 ANITA H. BHANDARI A.Y. 1997-99 PAGE OF 5 3 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 ACTION IN THE CASE OF SHRI KAMAL KUMAR JOHARI CA OF MUMBAI, THE A .O. NOTICED THAT HE ALONG WITH SHRI HARI OM SHARMA CA AND THEIR RELATIVE OR ASSOCIATE CONCERNS WERE INDULGING IN SHOWING PURCH ASES OF DIAMONDS DISCLOSED UNDER VDIS1997 BY VARIOUS PERS ONS AND SUBSEQUENTLY, THE SAME WERE SHOWN AS SOLD IN CASH ON RETAIL BASIS TO SOME IDENTIFIABLE PERSONS FROM SURAT. SUCH SAL E PROCEEDS WERE THEN DEPOSITED IN BANK ACCOUNTS OPENED IN THE NAM E OF THE GROUP CONCERNS OF THESE PERSONS AND, AFTER ROUTING THE MO NEY THROUGH VARIOUS BANK ACCOUNTS, CHEQUE/ DEMAND DRAFTS WERE I SSUED TO BENEFICIARIES I.E. SO CALLED DECLARANT UNDER VDIS1 997. ON THE BASIS OF EVIDENCES FOUND, THE A.O NOTED THAT SMT. K OMAL AMOLACHAND 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) READ WITH SECTION 147 OF THE ACT WITH THIS FINDING THAT THE RECEIPT OF MONEY BY THE ASSESSEE SHOWN TO HAVE BEEN OUT OF SALES OF DIAMOND WAS NOTHING BU T 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. 3. WE FIND FROM THE FIRST APPELLATE ORDER THAT THE LD CIT(A) ON THE ISSUE HAS NOTED SOME UNDISPUTED MATERIAL FACTS THAT DIAMONDS FROM SALE OF WHICH, INCOME UNDER THE HEAD CAPITAL GAINS HAS BEEN SHOWN BY THE ASSESSEE WERE DECLARED UNDER THE VDIS 1997; THE COPY OF VALUATION REPORT OF GOVERNMENT APPROVED VA LUER IN RESPECT OF THE VARIOUS ITEMS OF JEWELLERY, THEIR DESCRIPTIO N, THEIR WEIGHT ETC., WAS ALSO FILED WITH THE A.O AND DURING THE APPELLAT E PROCEEDINGS, THE CERTIFICATE UNDER VDIS ISSUED BY THE LD CIT WA S 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 UNDER THE VDIS WAS ISSUED TO THE ASSESSEE. THE ASSESSEE CLAIMED TO HAVE SOLD THE DI AMONDS TO M/S. GALAXY EXPORTS AND SALE PROCEEDS OF WHICH HAVE BEEN RECEIVED THROUGH CHEQUES. IN SUPPORT OF ITS CLAIM REGARDING SALE OF ITA . NO 263/PN/2010 & C.O.11/PN/2011 ANITA H. BHANDARI A.Y. 1997-99 PAGE OF 5 4 DIAMONDS, THE ASSESSEE HAD FURNISHED COPIES OF BILL S AND PARTIES BOOKS BEFORE THE A.O. UNDER SIMILAR FACTS AND CIRC UMSTANCES, THE HONBLE BOMBAY HIGH COURT IN THE ABOVE CITED CASES, HAS DECIDED AN IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEES THERE IN. RESPECTFULLY FOLLOWING THOSE DECISIONS, WE ARE OF THE VIEW THAT LD CIT(A) HAS RIGHTLY DELETED THE ADDITION IN QUESTION IN FAVOUR OF THE ASSESSEE. THE SAME IS UPHELD. GROUND NOS. 2 TO 9 INVOLVING T HE ISSUE ARE THUS REJECTED. WE THUS FOLLOWING THE ABOVE DECISION DECIDE THE ISS UE IN FAVOUR OF THE ASSESSEE HOLDING THAT THERE IS NO INFIRMITY IN THE FIRST APP ELLATE ORDER IN THIS REGARD. THE SAME IS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 7. THE APPEAL IS THUS DISMISSED. C.O. NO. 11/PN/2011 8. THE ASSESSEE HAS OBJECTED THE FIRST APPELLATE OR DER, WHEREBY THE LD. CIT(A) HAS UPHELD THE VALIDITY OF THE ACTION OF THE A.O I N RE-OPENING THE ASSESSMENT UNDER S. 147 OF THE ACT. 9. THE CONTENTION OF THE ASSESSEE IS THAT NOTICE U/ S. 148 HAS BEEN ISSUED AFTER THE EXPIRY OF A PERIOD OF FOUR YEARS PRESCRIBED UND ER SECTION 149(1)(A) READ WITH PROVISO 1 OF SECTION 147(1)(A) READ WITH PROVISO 1 OF SECTION 147 OF THE ACT. 10. AT THE TIME OF THE HEARING, THE LD. AR SUBMITTE D THAT HE DOES NOT WISH TO PURSUE THE CROSS-OBJECTION. THE LD. D.R DID NOT EX PRESS OBJECTION THERETO. THE C.O. IS ACCORDINGLY DISMISSED AS WITHDRAWN. 11. IN SUMMARY, THE APPEAL AND THE CROSS OBJECTIONS ARE DISMISSED. ITA . NO 263/PN/2010 & C.O.11/PN/2011 ANITA H. BHANDARI A.Y. 1997-99 PAGE OF 5 5 THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30TH AUGUST 2011. SD/- SD/- ( G.S.PANNU ) ACCOUNTANT MEMBER (I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 30TH AUGUST, 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT -III, PUNE 4. THE CIT(A)- III, PUNE 5. THE D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE