2005 (6) TMI 206 - AT - Income Tax

Tribunal deletes addition under sec 68, stresses evidence disclosure. AO directed to provide relief.

The Tribunal allowed the assessee's appeal, deleting the addition of Rs. 7,66,519 under section 68 for the sale of VDIS jewellery. The Tribunal emphasized ... Cash Credit Issues:- Addition under section 68 for sale of VDIS jewellery- Reduction of long-term capital lossAnalysis:1. Addition under section 68 for sale of VDIS jewellery:- The assessee appealed against the addition of Rs. 7,66,519 under section 68 for the sale of VDIS jewellery to M/s Bishan Chand Mukesh Kumar Saraf as bogus.- The AO found discrepancies in signatures and non-cooperation of the purchaser, leading to the addition.- The CIT(A) observed that the AO did not raise enquiries regarding the purchaser's existence during assessment and relied on direct enquiries with the purchaser.- The CIT(A) noted that the purchaser confirmed the transaction but failed to appear before the Investigation Wing, creating doubt.- The assessee provided evidence of sale through cheques and bills, proving the transaction's genuineness.- Citing legal precedents, the Tribunal emphasized the need for evidence disclosure and opportunity for rebuttal, leading to the deletion of the addition.2. Reduction of long-term capital loss:- The AO reduced the long-term capital loss claimed by the assessee from Rs. 2,13,512 to Rs. 31,696.- The Tribunal directed the AO to provide necessary relief to the assessee following the deletion of the addition under section 68.- Consequently, the appeal of the assessee was allowed, and the addition of Rs. 7,66,519 was deleted, with directions for relief on the reduced long-term capital loss.