2016 (7) TMI 1535 - AT - Income Tax

Tribunal overturns CIT(A) order, deletes sale proceeds addition

Smt. Manjumala R. Sharma, Versus The Income Tax Officer, Ward 2 (2), Hubli.

Smt. Manjumala R. Sharma, Versus The Income Tax Officer, Ward 2 (2), Hubli. - TMI Issues:- Discrepancy in items declared under VDIS and items sold- Justification for addition of sale proceeds in books of accountsAnalysis:1. The appeal was filed against the CIT(A) order for the assessment year 1998-99. The appellant contended that both the CIT(A) and the Assessing Officer failed to properly interpret the direction given by the High Court and did not appreciate the available evidence. The appellant argued that the sale was indeed proved, contradicting the findings of the High Court. The appellant sought to add, alter, or delete grounds during the appeal hearing.2. The main issue revolved around the introduction of cash in the assessee's accounts due to the sale of silver and diamonds declared under VDIS. The Assessing Officer raised a technical objection, stating that the items sold were not the same as those declared under VDIS, leading to the addition of sale proceeds in the books of accounts.3. The AO noted that the cash introduction was explained by the sale of silver and diamonds declared under VDIS. The AO raised concerns about the inconsistency between the items declared and those sold. The appellant provided evidence of converting silverware into silver bullion and diamonds, but the AO remained unconvinced.4. The matter was taken to the High Court, which remanded it to the AO to determine if the items sold were the same as those declared under VDIS. The appellant submitted details of the items sold and evidence of conversion during the remand proceedings.5. The Tribunal examined the evidence presented by the appellant, including valuation reports, VDIS certificates, and sale documents. It was established that the same quantity of silver and diamonds declared under VDIS was indeed sold, despite being in a different form. The Tribunal found no justification for the addition of sale proceeds in the books of accounts, as the Revenue had already accepted the declaration under VDIS.6. Ultimately, the Tribunal ruled in favor of the appellant, setting aside the CIT(A) order and deleting the addition of sale proceeds. The Tribunal concluded that since the same quantity declared under VDIS was sold, there was no merit in the Revenue's decision to make the additional addition. The appeal by the assessee was allowed.