Commissioner of Income Tax-V, V. Sri Ch. Jawahar Babu

ITTA/522/2011

AI Insights

The case revolves around the sale of jewellery by the assessee, Ch. Jawahar Babu, which was initially not declared in the income tax return. Following a search and seizure operation, the assessee declared capital gains from the sale in a subsequent return under Section 153A of the Income Tax Act, 1961. The Assessing Officer rejected the sale as non-genuine due to lack of supporting documents and the initial omission in the return. The assessee appealed, and additional evidence was allowed, including confirmations from the donors who had declared the jewellery under VDIS, 1997. The Tribunal accepted the genuineness of the transaction, leading to the Revenue's appeal, which was dismissed by the High Court.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 719171 (HC-HYDERABAD)
• Appeal Type: Others
• Pronouncement Date: 16-02-2012
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Capital Gains; Genuine transaction; Income Tax; Sale of jewellery; VDIS; Voluntary Disclosure of Income Scheme
• Section: 153A; 260A

Judgement Text

"THE HON’BLE THE CHIEF JUSTICE SHRI MADAN B. LOKUR AND THE HON’BLE SHRI JUSTICE SANJAY KUMAR I.T.T.A. No.522 of 2011 DATED:16.2.2012 Between: The Commissioner of Income Tax Hyderabad … Appellant And Ch. Jawahar Babu … Respondent THE HON’BLE THE CHIEF JUSTICE SHRI MADAN B. LOKUR AND THE HON’BLE SHRI JUSTICE SANJAY KUMAR INCOME TAX TRIBUNAL APPEAL NO.522 OF 2011 JUDGMENT: (per the Hon’ble the Chief Justice Shri Madan B. Lokur) The assessee had filed a return of income in which sale of jewellery was not declared. 2. Subsequently, a search and seizure operation was carried out and as a result thereof, the assessee filed a return under Section 153A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 3. In this return, the assessee declared capital gains on sale of jewellery. The assessee did not produce any documents in support of the sale and therefore the Assessing Officer did not accept the sale transaction as genuine. The Assessing Officer also took into consideration the fact that in the original return filed by the assessee, there was no mention about the sale of jewellery. 4. Feeling aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The assessee also moved an application for leading additional evidence. This was allowed by the Commissioner. 5. The assessee submitted that Sri A.B.S. Reddy and Smt. A.B. Neetha had gifted the jewellery in question to the assessee and that was then sold by him. It was pointed out that Sri A.B.S. Reddy and Smt. A.B. Neetha had declared the jewellery under the Voluntary Disclosure of Income Scheme (VDIS), 1997. The assessee also filed documents in this regard as well as confirmation from the two donors with regard to the declaration made under the VDIS. The Commissioner did not accept the contention of the assessee and upheld the assessment order. 6. In a further appeal before the Tribunal, it was held that the declaration made by the two donors under the VDIS could not be doubted. It was also held that merely because the jewellery had not been declared in the original return, it could not lead to any conclusion that such a transaction, as brought on record by the assessee, had not taken place. The Tribunal also relied upon the confirmation given by the two donors and noted that they had not even been examined by the Assessing Officer to confirm the genuineness of the transaction. Looking to the material on record, the Tribunal came to the conclusion that there was nothing to show that the transaction of sale of jewellery entered into by the assessee on which capital gains were declared, was not a genuine transaction. 7. In our opinion, the present appeal filed by the Revenue under Section 260A of the Act raises only an issue of fact, although it may be a mixed issue of fact and law regarding the genuineness of the transaction. The Tribunal having come to the conclusion that the transaction was genuine, there being no other material on record to suggest to the contrary, we are of the opinion that in any event no substantial question of law arises for consideration. 8. We are not inclined to entertain this appeal. 9. Dismissed. __________________ MADAN B. LOKUR, CJ __________________ SANJAY KUMAR, J 16-2-2012 bnr "