2020 (4) TMI 866 - AT - Income Tax

Tribunal remits case to AO for further review after allowing Revenue's appeal

ACIT, Circle-26 (1), New Delhi Versus Late Shri S.S. Dhanjal

The Tribunal allowed the Revenue's appeal for statistical purposes, remitting the matter to the AO to follow directions given in similar cases. The AO was ... Bogus transaction relating to sale of the jewellery - addition made on account of accommodation entry - HELD THAT:- As decided in Anil Kumar Bansal and Nagar Mal Bansal [2018 (5) TMI 1991 - ITAT DELHI] for giving independent finding of the fact whether the sale of jewellery by the assessee is a genuine transaction or not , the matter need to be restored to the file of the Assessing Officer. We order accordingly and direct the Assessing Officer to decide the issue following the direction of the Tribunal given in order of the tribunal in the case of Gunvir Kumar Jain [2018 (4) TMI 398 - ITAT DELHI]. - Revenue appeal allowed for statistical purposes. Issues Involved:1. Jurisdiction assumed by the AO under Section 158BD.2. Validity of block proceedings initiated after the regular return filing.3. Genuineness of the sale of jewelry transactions.Detailed Analysis:1. Jurisdiction Assumed by the AO under Section 158BD:The Revenue challenged the CIT(A)'s decision that the jurisdiction was wrongly assumed by the AO under Section 158BD. The Department argued that the accommodation entry was provided against cash paid by the assessee, which was undisclosed income. The Tribunal noted that the Hon’ble Delhi High Court had remitted the matter for fresh consideration to determine if the sale of jewelry was genuine. The Tribunal referred to similar cases, including Geeta Devi Bindal and others, where the High Court directed the Tribunal to independently examine each case and return specific findings on the genuineness of the transactions.2. Validity of Block Proceedings Initiated After Regular Return Filing:The CIT(A) had held that the AO could not resort to block proceedings when the assessee had declared the sale of jewelry in the regular return filed beyond the search proceedings date. The Tribunal observed that despite notifying the assessee's legal heir, no representation was made, and the appeal was heard ex parte. The Tribunal referred to previous cases where similar issues were remitted back to the AO for verification of the genuineness of the transactions, emphasizing the need for thorough examination and providing the assessee an opportunity to be heard.3. Genuineness of the Sale of Jewelry Transactions:The core issue was whether the sale of jewelry by the assessee to M/s Bemco Jewellers P Ltd. was genuine or an accommodation entry. The Tribunal referred to the High Court's direction to independently examine each case and return specific findings. The Tribunal cited previous decisions where similar matters were remitted to the AO for further inquiries. The Tribunal emphasized that the declaration of jewelry under the VDIS scheme could establish possession but not the genuineness of the sale. The Tribunal noted that affidavits confirming the sale were self-serving documents and needed corroboration with other evidence. The Tribunal directed the AO to verify the transactions by summoning the purchaser and examining the books of accounts and sales tax records.The Tribunal also highlighted that the onus was on the assessee to prove the genuineness of the sale. The Tribunal referred to several cases where the matter was remitted to the AO for verifying the actual purchase/sale transactions and stock entries from the purchaser's books and sales tax records. The Tribunal directed the AO to provide the assessee with a reasonable opportunity to present evidence and to summon the purchaser for verification.Conclusion:The Tribunal allowed the Revenue's appeal for statistical purposes, remitting the matter to the AO to follow the directions given in similar cases and to decide the issue after providing the assessee an opportunity to be heard. The Tribunal emphasized the need for thorough verification of the transactions and corroboration of evidence to establish the genuineness of the sale of jewelry.