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Facts
The assessee purchased diamonds worth Rs. 5,12,100/- for personal use and paid by cheque. The AO treated this as bogus purchase, and the CIT(A) confirmed the addition. The assessee claims it was not a dealer, the diamonds were not stock-in-trade, and the expenditure was not claimed.
Held
The Tribunal held that since the assessee is not a dealer, the diamonds were not stock-in-trade, and the expenditure was not claimed, there was no basis for treating the purchase as bogus. Consequently, the addition made by the AO and confirmed by the CIT(A) was deleted.
Key Issues
Whether the addition for purchase of diamonds for personal use, when not claimed as expenditure and not part of stock-in-trade, is justified.
Sections Cited
147, 143(3)
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Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA
Before: SHRI GEORGE MATHAN
(नििाारण वर्ा / Assessment Year :2008-2009) Gopal & Sons HUF Vs ITO, Ward-32(1), Kolkata Block A, Poddar Point, 1st Floor, 113 Park Street Poddar Point, Kolkata PAN No. : AABHG 9506 N (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) : Shri Miraz D. Shah, AR नििााररती की ओर से /Assessee by राजस्व की ओर से /Revenue by : Smt. Pampa Ray, JCIT-Sr.DR सुनवाई की तारीख / Date of Hearing : 15/07/2025 घोषणा की तारीख/Date of Pronouncement : 15/07/2025 आदेश / O R D E R This is an appeal filed by the assessee against the order of the ld. CIT(A)-09, Kolkata, dated 27.03.2019 for the Assessment Year 2008-2009.
Shri Miraj D. Shah, ld.AR appeared on behalf of the assessee and Smt. Pampa Ray, ld. Sr.DR appeared on behalf of the revenue.
It was the submission by the ld. AR that the assessee had purchased diamonds for a value of Rs.5,12,100/- during the impugned assessment year from Moulimani Impex Pvt. Ltd., Surat. The assessee had paid for the same by cheque. Ld.AR has also placed before me the bank statement of the assessee wherein the details of the transaction and cheque number are available. It was submitted that the AO treated this amount of purchase price of Rs.5,12,100/- as the bogus purchase of the assessee. It was the submission that the assessee has purchased the diamonds for personal use. The assessee is not a dealer of diamonds. The assessee has not sold the diamonds and the assessee has not claimed the said expenditure on the purchase of diamond as expenditure. It was the prayer that the addition made by the AO and confirmed by the ld. CIT(A) is liable to be deleted. It was also the submission of the ld. AR that the order passed by the ld. CIT(A) is an ex-parte order, insofar as the assessee had no knowledge of the hearing having been posted. It was the submission that even the order of the ld. CIT(A) was also not known to the assessee, it came to the knowledge only after getting the certified copy of the same in March, 2025, then the assessee proceeded to file the present appeal before the Tribunal.
In reply, ld. Sr. DR submitted that the diamonds were purchased from a bogus company in Surat. It was the submission that the order of the ld.AO and ld.CIT(A) are liable to be upheld.
I have considered the rival submissions. A perusal of the facts of the present case clearly shows that the assessee is not a dealer of diamonds. The diamonds purchased are not stock-in-trade. The expenditure on account of purchase of diamonds have not been claimed by the assessee as an expenditure. This being so, there is no cause for treating the expenditure by the AO as bogus. In these circumstances, the addition made by the AO and confirmed by the ld. CIT(A) stands deleted.