RAMAKANT R. SHARMA,HUBLI vs. ITO, HUBLI

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ITA 139/BANG/2016Status: DisposedITAT Bangalore30 June 2016AY 1999-20005 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the same quantity of silver and diamond declared under VDIS was sold, supported by evidence of conversion. Therefore, the addition made on account of sale proceeds was unjustified.

What were the facts?

The assessee declared silver and diamonds under VDIS 1997. Later, these items were converted and sold, with the sale proceeds introduced into the books of account. The Assessing Officer made an addition, arguing the items sold were not the same as those declared under VDIS.

What were the issues?

Whether the sale proceeds introduced in the books of account were from the same assets declared under VDIS, and if the addition made by the revenue authorities was justified.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC “B” BENCH : BANGALORE

Before: SHRI SUNIL KUMAR YADAV

For Appellant: Shri Vinay Kulkarni, CA
For Respondent: Smt. Swapna Das, Jt. CIT(DR)
Hearing: 27.06.2016Pronounced: 30.06.2016

O R D E R This appeal is preferred by the assessee against the order of the CIT(Appeals), Hubli dated 17.11.2015 for the assessment year 1999-2000 inter alia on the following grounds:-

“1. The Learned CIT (Appeals) has failed to read properly, which is also the case with the learned Assessing Officer, the direction given to the department by the Hon'ble High Court and proceeded to uphold the order of the Assessing Officer without appreciating the documentary as well as circumstantial evidence available before him.

2. While passing the order the Learned CIT (Appeals) has held that sale is not proved. This clearly undoes the conclusion drawn by the Honorable High Court regarding sale transaction.

3. In the order the learned CIT (Appeals) has not given any concrete reasons to reject the evidence produced in support of the fact that the assets sold are the same assets as declared under VDIS 1997, though in different form. 4. 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. In view of the above and other written submission that may be made during the course of hearing, it is prayed to hold that: 1. The assets sold are the same assets, may not be in the same form, which are declared under VDIS 1997. And 2. The addition of Rs 5,37,680/- made on above account be deleted.”

2.

Though various grounds are raised, but they all relate to introduction of cash in the books of accounts of the assessee on sale of silver and diamond which were declared under Voluntary Disclosure of Income Scheme, 1997 (VDIS).

3.

During the course of assessment proceedings, the Assessing Officer has noted that certain introduction of cash was explained by the assessee to have been introduced on account of sale of silver and diamonds. It was also contended by the assessee that under VDIS, the assessee has declared the silver and diamonds. The declaration was accepted under VDIS and later on silver articles were converted into silver bullion which were sold and the sale proceeds were introduced in the books of account.

The AO has raised a technical objection by stating that the items declared under VDIS were not the same, which were sold and the sale proceeds were introduced in the books of account.

4.

When the matter reached the Hon’ble High Court of Karnataka, the Hon'ble jurisdictional High Court has remanded the matter back to the AO to give a specific finding as to, whether the items sold were the same which were disclosed under VDIS?

5.

In the remand proceedings, the assessee has furnished the details of items sold and the evidence of conversion of the silver articles and into silver bullion. The weight of silver bullion is the same. The AO did not accept the contentions of the assessee and again made the addition.

Though the assessee has tried to explain the facts with details, but it was not acceptable to the CIT(Appeals).

6.

Before the Tribunal, the assessee has filed a copy of the Valuation Report, VDIS Certificate, copy of sale of silver bullion and the evidence of conversion of silver articles into silver bullion. From this evidence, the assessee has tried to explain that the same quantity of silver and diamond which was declared under VDIS was sold.

7.

Per contra, the ld. DR strongly opposed the contentions of the assessee and placed heavy reliance upon the order of the CIT(Appeals).

8.

Having carefully examined the orders of lower authorities and documents placed on record in the light of rival submissions, we find that the same quantity of silver and diamond which were declared under VDIS was sold. Though the assessee has declared the silver articles and diamonds in different form under VDIS, but in sale bill the assessee has sold silver bullion and diamonds separately. The assessee has filed evidence with respect to conversion of silver articles into silver bullion.

9.

Since the same quantity which was disclosed under VDIS was sold, we find no justification in making the addition on introduction of sale proceeds in the books of account. Once the Revenue has accepted the declaration under VDIS and accepted the tax deposited by the assessee, it should not have made a further addition on account of introduction of sale proceeds of the said jewellery in the books of account. We therefore find no merit in the addition made by the revenue authorities. Accordingly, we set aside the order of the CIT(Appeals) and delete the addition.

10.

In the result, the appeal by the assessee is allowed.

Pronounced in the open court on this 30th day of June, 2016.

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