Income Tax Appellate Tribunal - Pune
Kamal Amolakchand Bhandari (Huf), Pune vs Department Of Income Tax on 30 June, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
Pune Bench "B" , Pune
Before Shri I.C. Sudhir (JM)
and Shri G.S. PANNU (AM)
ITA No.1286/PN/2009
(Asstt. Year : 1998-99)
Income Tax Officer, Wd 2(1), Pune ... Appellant
v.
Smt Kamal Amolakchand Bhandari (HUF), ... Respondent
635/9A Classic Appartment,
Bibewadi, Pune-411037
PAN : Not available
ITA No.1284/PN/2009
(Asstt. Year : 1998-99)
Income Tax Officer, Wd 2(1), Pune ... Appellant
v.
Smt Suverna Amolakchand Bhandari (HUF), ... Respondent
635/9A Classic Appartment,
Bibewadi, Pune-411037
PAN : Not available
Appellant by : Shri Santosh Kumar
Respondent by : None
ORDER
Per I.C. Sudhir, JM
ITA No. 1286/PN/2009
The Revenue has questioned first appellate order on several Grounds. Ground No. 1 is general in nature. Ground Nos. 2 to 9 involve a common issue as to whether the Ld CIT(A) has erred in deleting the addition of Rs.17,02,107/- made by the A.O u/s. 68 of the Act on account of disallowance of claimed receipt of the amount out of sale of diamonds declared in VDIS. The Ground Nos. 10 to 11 involve the issue as to whether Ld CIT(A) has erred in deleting the addition of Rs. 1,70,211/- made by the A.O u/s. 69C of the Act towards unexplained expenditure.
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2. Having gone through the first appellate order on 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 the decision of Hon'ble Bombay High Court in the case of CIT v/s. Inder 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. The relevant facts are that the assessee had disclosed undisclosed income of Rs. 24,25,000/- under VDIS '97 consisting 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 purchases of diamonds disclosed under VDIS'1997 by various persons and subsequently, the same were shown as sold in cash on retail basis to some identifiable persons from Surat. Such sale proceeds were then deposited in Bank Accounts opened in the name of the Group concerns of these persons and, after routing the money through various bank accounts, cheque/ demand drafts were issued to beneficiaries i.e. so called declarant under VDIS'1997. On the basis of evidences found, the A.O noted that Smt. Komal 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 but her unaccounted cash. The ld CIT(A) has deleted the addition of Rs. 17,02,107/- so made by the A.O following the afore-cited decisions.
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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 valuer in respect of the various items of jewellery, their description, their weight etc., was also filed with the A.O and during the appellate proceedings, the certificate under VDIS issued by the Ld CIT was 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 diamonds to M/s. Galaxy Exports and sale proceeds of which have been received through cheques. In support of its claim regarding sale of diamonds, the assessee had furnished copies of bills and parties' books before the A.O. Under similar facts and circumstances, the Hon'ble Bombay High Court in the above cited cases, has decided an identical issue in favour of the assessees therein. 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 the issue are thus rejected.
Ground Nos. 10 and 11
4. It is consequential in nature as the A.O had made addition of Rs. 1,70,211/- on account of unexplained expenditure u/s. 69C of the Act on the basis that the assessee must have incurred the commission expenditure in managing the receipt of Rs. 17,02,107/- out of sale of diamond to M/s. Galaxy Exports. In view of our decision on the main issue involved in Ground Nos. 2 to 9 hereinabove, we are 4 ITA . No1284 & 1286/PN/2009 Smt Kamal A Bhandari etc. A.Y 1998-99 Page of 5 of the view that Ld CIT(A) has rightly deleted the addition of Rs.1,70,211/-. The Ground Nos. 10 and 11 are accordingly rejected.
5. Consequently, appeal is dismissed.
ITA No. 1284/PN/2009
6. In this appeal also, similar issues have been raised in Ground Nos. 2 to 11 while questioning the action of the Ld CIT(A) by the Revenue in deleting Rs. 19,28,635/- disallowed by the A.O doubting the genuineness of the claimed sale receipt of diamond by the assessee declared in VDIS (ground Nos. 2 to 9) and indeleting Rs.1,19,864/- added by the A.O u/s. 69C of the Act towards unexplained expenditure incurred in procuring the above receipts (ground Nos. 10 and 11). Other grounds i.e. 1, 12, and 13 are general in nature.
7. Similar facts are involved in this case as we have discussed hereinabove in the case of Smt. Kamal A. Bhandari. We thus following the decision on identical issues, raised in Ground No.2 to 9 and 10 & 11 in the case of Smt. Kamal A. Bhandari decide the issues in favour of the assessee upholding the first appellate order in this regard. The Grounds 2 to 11 are accordingly rejected. Consequently, appeal is dismissed.
8. In result, both the appeals are dismissed.
Order pronounced in the open Court on 30th June, 2011.
Sd/- Sd/-
(G.S. PANNU) (I.C. SUDHIR )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Pune, dated the 30th June, 2011
US
Copy of the order is forwarded to :
5 ITA . No1284 & 1286/PN/2009
Smt Kamal A Bhandari etc.
A.Y 1998-99
Page of 5
1. The Appellant
2. The Respondent
3. The CIT-II, Pune
4. The CIT(A)- II, Pune
5. The D.R. "B" Bench, Pune
6. Guard File
By order
Assistant Registrar
Income Tax Appellate Tribunal
Pune