2016 (6) TMI 1366 - AT - Income Tax

Tribunal rules in favor of appellant in assessment case, emphasizing consistency in transactions

Shri Ghisulal Chopra, Smt Vimaladevi Doshi, Shri Shyam B. Habib, Smt. Sabita Kallianpurkar, Shri Kailash O. Mahajan, Sri Parasmal J Jain, Sri Seshmal J Jain, Sri GW Bafna, Kanchanbai M Jain, Ramakant R Sharma Versus The Income Tax Officer, DCIT Ward 3 (2), Hubli.

Shri Ghisulal Chopra, Smt Vimaladevi Doshi, Shri Shyam B. Habib, Smt. Sabita Kallianpurkar, Shri Kailash O. Mahajan, Sri Parasmal J Jain, Sri Seshmal J ... Issues:1. Appeal against CIT(A) order for assessment year 1998-99.2. Introduction of cash in the books of accounts related to sale of gold, silver, and diamond under VDIS.Analysis:1. The appellant challenged the CIT(A) order for assessment year 1998-99 on various grounds related to the addition of cash in the books of accounts. The appellant disputed the assessment amount and the justification provided by the CIT(A) for confirming the addition under section 68 of the Act. Additionally, the appellant contested the findings regarding the nomenclature discrepancy between the declaration and sale invoice of gold, silver, and diamond.2. The Assessing Officer raised a technical objection during the assessment proceedings, questioning whether the items sold were the same as those declared under the Voluntary Disclosure of Income Scheme, 1997 (VDIS). The matter was remanded to the AO by the High Court to determine this specific issue. Despite the appellant's explanations and evidence of conversion of jewelry into bullion, the AO and CIT(A) did not accept the contentions.3. The Tribunal carefully examined the evidence presented by the appellant, including valuation reports, VDIS certificate, and sale documents. It was established that the same quantity of gold, silver, and diamond declared under VDIS was indeed sold by the appellant. The Tribunal noted that although the form of declaration differed from the sale bill, the conversion of jewelry into bullion was supported by evidence.4. The Tribunal concluded that since the quantity declared under VDIS was sold, there was no justification for the addition of sale proceeds in the books of account. The Tribunal emphasized that once the Revenue accepted the declaration and tax payment under VDIS, further additions on the sale proceeds were unwarranted. Consequently, the Tribunal set aside the CIT(A) order and deleted the addition, allowing the appeal by the assessee.This judgment highlights the importance of consistency in declarations and sales transactions, emphasizing the need for proper documentation and evidence to support claims made during assessment proceedings.