ITO, Pune V. Shri Ratilal Chandanmal Bora, Pune

ITA 716/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56476 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 1998-1999
• Appeal Filed On: 10-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARESHWAR SHARMA
• Keywords: Unexplained expenditure; Principle of natural justice
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO. 716/PN/2010 : A.Y. 1998-99 I.T.O. WARD 2(1) PUNE APPELLANT VS. SHRI RATILAL CHANDANMAL BORA SAMRAT HOUSE 1 ST FLOOR, 39-D-2/6 SHANKAR SHETH ROAD, PUNE-411 037 PAN AASPB 8223 E RESPONDENT APPELLANT BY: SHRI HARESHWAR SHARMA RESPONDENT BY: SHRI NIKHIL PATHAK DATE OF HEARING: 28-9-2011 DATE OF PRONOUNCEMENT: 30-9-2011 ORDER PER SHAILENDRA KUMAR YADAV, JM THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST T HE ORDERS OF THE CIT(A)-II PUNE DATED 26-2-2010 FOR A. Y. 1998- 99 ON THE POINT OF DELETION OF ADDITION OF RS. 7,15 ,290/- MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT. 2. DURING THE PROCEEDINGS BEFORE US, LEARNED COUNSE L FOR THE ASSESSEE FILED A COPY OF ORDER OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF N.H. MOTWANI IN ITA NO. 1282/PN/2009 FOR A.Y. 1998-99 DATED 29-7-2011 WHERE IN THE ISSUE WAS DECIDED AGAINST THE REVENUE AND IN FA VOUR OF THE ASSESSEE BY OBSERVING AS UNDER: 2 ITA NO. 716/PN/2010 RATILAL C. BORA A.Y. 1998-99 2. DURING THE PROCEEDINGS BEFORE US LD. COUNSEL FO R THE ASSESSEE FILED A COPY OF ORDER OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI TRILOKCHAND T. KALANI IN ITA NO. 5 38 AND 539/PN/200 FOR A.Y. 1999-00 WHEREIN THE ISSUE WAS D ECIDED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE B Y OBSERVING AS UNDER: 2. DURING THE PROCEEDINGS BEFORE US, LD. COUNSEL F OR THE ASSESSEE FILED THE ORDER OF THE PUNE TRIBUNAL I N THE CASE OF SHRI BALBHIM DATTATRAY SHINDE AND OTHERS F OR THE A.Y 1998-99 DATED 31/08/2007 VIDE ITA NO. 1362 & 1364/PN/2005 AND REFERRED TO PARA 5 AND 6 WHEREIN, IT WAS HELD AS UNDER:- 5. AT THE TIME OF HEARING BEFORE US, NONE APPEARED FOR THE RESPONDENT ASSESSEE. WE HAVE HEARD THE LEARNED DR AND DULY CONSIDERED THE FACTUAL MATRIX O F THE CASES AS ALSO THE APPLICABLE LEGAL POSITION. 6. ON PERUSAL OF THE ORDER OF THE CIT(A), IT IS EVIDENT THAT CIT(A) HAS MADE CATEGORICAL FINDINGS B EFORE THE DELETION OF THE ADDITIONS MADE BY THE AO ON ACC OUNT OF ALLEGED FACTITIOUS SALE PROCEEDS OF DIAMOND JEWE LLERY AND ON ACCOUNT OF COMMISSION ON BILLS, VIZ., I) THE ADDITION ON ACCOUNT OF PROCEEDS FROM SALE OF JEWELL ERY TO M/S. GALAXY EXPORTS CANNOT BE SUSTAINED MERELY ON T HE BASIS OF INVESTIGATION DONE IN THE CASE OF THE BUYE R PARTY DURING THE COURSE OF SEARCH PROCEEDINGS IN ITS CA SE AS THE SAME HAS NO DIRECT RELEVANT TO THE APPELLATE PROCEEDINGS IN THE APPELLANTS CASE, II) ON THE CON TRARY, THE CONFIRMATIONS OF THE BUYER PARTY FILED BY THE APPELLANT DURING THE APPELLATE PROCEEDINGS AS DIREC TLY RELEVANT IN THIS CASE AND THE AO HAS DONE NOTHING T O DISPROVE THE SAME, AND II) THERE HAS BEEN A COMPLET E DENIAL OF THE PRINCIPLES OF NATURAL JUSTICE IN THIS CASE IN AS MUCH AS THE EVIDENCE FILED BY THE APPELLANT HAS NOT BEEN CONTROVERTED BY THE AO AND COMPLETE RELIANCE I S PLACED BY THE AO ON THE OUTCOME OF INVESTIGATION IN THE CASE OF A THIRD PARTY. IN ANY EVENT, THE HONBLE IT AT MUMBAI BENCH B (THIRD MEMBER) IN THE CASE OF UTTAMCHAND P. JAIN VS. ITO [2006] 103 ITD 1 HAS FOLLOWED THE RATIO LAID IN THE CASE OF MOHANLAL R. DAGA VS. ITO (SUPRA), ON WHICH THE RELIANCE PLACED BY THE ASSESSEE, WHILE DECIDING THE CASE IN FAVOUR OF THE ASSESSEE. ON SIMILAR IDENTICAL FACTS AND CIRCUMSTAN CES OF THE CASE. THE ISSUE IS THUS SQUARELY COVERED BY THE AFORESAID THIRD MEMBER DECISION. WE RESPECTFULLY FO LLOW THE SAME IN VIEW OF THE DISCUSSIONS ABOVE, WE UPHOL D THE 3 ITA NO. 716/PN/2010 RATILAL C. BORA A.Y. 1998-99 ORDER OF THE CIT(A) IN DELETING THE ADDITIONS MADE ON ACCOUNT OF PROCEEDS FROM SALE OF JEWELER AND COMMIS SION ON BILLS, IN THESE TWO APPEALS. THUS, THE GROUND NO S. 1 & 2 IN BOTH THE APPEALS RAISED BY THE REVENUE ARE HER EBY DISMISSED. 3. RESPECTFULLY FOLLOWING THE ABOVE VIEW TAKEN BY T HE TRIBUNAL IN THE CASE OF SHRI BALBHIM DATTATRAY SHIN DE AND OTHERS (SUPRA), WE UPHOLD THE ORDER OF THE CIT( A) IN DELETING THE ADDITIONS MADE ON ACCOUNT OF UNEXPLAIN ED CASH CREDIT AND UNEXPLAINED EXPENDITURE. FURTHER, T HE ABOVE REFERRED EXTRACT WAS DECIDED IN THE FACTUAL C ONTEXT SALE OF JEWELER TO M/S. GALAXY EXPORTS. WHEREAS THE PRESENT CASE INVOLVES SALE OF JEWELER TO DHANANJAY DIAMONDS. IT IS INFORMED THAT BOTH THE GALAXY EXPOR TS AND DHANANJAY DIAMONDS BELONG TO K.K. JOHRI AND SHR I HARI OM SHARMA WHERE THE TRIBUNAL CONFIRMED THE GENUINENESS OF THESE CONCERNS. REVENUES APPEALS ON IDENTICAL FACTS, HAVE BEEN DISMISSED IN PAST IN LAR GE NUMBER OF CASES RELYING ON BOMBAY HIGH COURT DECISI ON IN THE CASE OF INDER V. NANLEANI ITA NO. 128 OF 200 9 DATED 24-02-2009, WHOSE EXTRACT IS AT PAGES 171 TO 172 OF BCAJ FOR THE PROPOSITION RECEIPTS OF SALE PROCEE DS OF DIAMONDS AND THE RECEIPTS OF THE SAID CONSIDERATION BY CHEQUE INVOLVING DECLARED ASSETS UNDER VDIS PROVISI ON DOES NOT AMOUNT TO UNDISCLOSED INCOME. WE ALSO FID THE RATIO DECIDENDI IN THE CASE OF UTTAMCHAND P. JAIN 103 ITD 1 IS ALSO RELEVANT FOR IDENTICAL PROPOSITION. H OWEVER, THE GENUINENESS OF THE TRANSACTION OF THE SALE OF T HE DECLARED ASSETS IN VDIS SHOULD NOT BE DOUBTED CONSEQUENTLY THE CREDIT TRANSACTIONS APPEARED IN TH E BOOKS OF ASSESSEE SHOULD ALSO BE GENUINE AND NOT ME RELY A PAPER TRANSACTIONS AS HELD BY THE REVENUE. CONSEQUENTLY, APPEALS OF THE REVENUE IN CASE OF TRILOKCHAND T. KALANI BOTH IN INDIVIDUAL AND HUF ST ATUS IS HELD COVERED IN FAVOUR OF THE ASSESSEE. ACCORDIN GLY, THE GROUNDS RAISED BY THE REVENUE ARE HEREBY DISMISSED. FACTS BEING SIMILAR, SO FOLLOWING THE AFORESAID OR DER OF THE TRIBUNAL, WE DO NOT FIND ANY INFIRMITY IN THE O RDER OF THE CIT(A) IN DELETING THE IMPUGNED ADDITION. ACCO RDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED. 4 ITA NO. 716/PN/2010 RATILAL C. BORA A.Y. 1998-99 3. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION WAS PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER 2011. SD/- SD/- (D. KARUNAKARA RAO) ACCOUNTANT MEMBER (SHAILENDRA KUMAR YADAV JUDICIAL MEMBER PUNE DATED THE 30 TH SEPTEMBER 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)- II PUNE 4. THE CIT II PUNE 5. THE D.R, B BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL