TaxTMI 
TaxTMI 
2011 (2) TMI 118
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....ences were not sufficient to doubt the bona-fides of the said transactions? ii) Whether on the facts and in the circumstances of the case, the order of the Special Bench of ITAT, New Delhi has erred in deciding the case of the respondent on the basis of the factual findings in the case of M/s Bemco Jewellers P. Ltd./Manoj Aggarwal whereas they were entirely different? iii) Whether the Special Bench of ITAT, New Delhi has erred in holding that M/s Bishan Chand Mukesh Kumar was a genuine trader of jewellery because facts of this firm were similar to the case of M/s Bemco Jewellers/Manoj Aggarwal, even though Sh. Manoj Aggarwal was found to be a Hawala Operator by the Special Bench, ITAT, Delhi? iv) Whether the Special Bench of ITAT, New Delhi has committed an ex-facie perversity in holding that no useful purpose will be fulfilled in allowing the AO to examine the additional evidence in the form of material collected during the course of assessment proceedings of M/s Bishan Chand Mukesh Kumar, even while the Special Bench of ITAT, New Delhi had held that "....and the issue about the genuineness of the transactions of purchase and sale of jewelle....
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....ount of sale of jewellery. The said jewellery was disclosed under Voluntary Disclosure of Income Scheme, 1997 (for short "VDIS") valued at Rs. 7,88,131/- as on 1.4.1987. Indexed cost was higher than the price at which the same was claimed to be sold on 2.2.1998 and 18.2.1998. The assessing officer doubted the genuineness of the transactions and held the sale proceeds to be unaccounted funds of the assessee. The CIT(A) upheld the additions. On further appeal, the Tribunal reversed the view taken by the assessing officer and the CIT(A) mainly on the ground that in the decision rendered in the case of M/s Bemco/Manoj Aggarwal Jewellers ("Bemco") which was held applicable to M/s Bishan Chand Mukesh Kumar ("BCMK") to whom the jewellery was sold by the assessee, additions were set aside. Finding recorded on the issue by the assessing officer, the CIT(A) and the Tribunal are as under:- Finding recorded by the asessing officer "This office frames its inference on the basis of material on record and comes to the conclusion that the alleged sale of jewellery is bogus and is infact the introduction of the unaccounted money of the assessee through the garb of sale of jewellery disclosed by ....
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.... The issue to be decided here is as to on whom the onus lies to prove the genuineness of sales and whether the party on whom the onus lies has been able to discharge such onus in a complete manner so that it can be said that the onus has shifted on the other side to disprove the same. In the present case, the appellant's counsel has filed confirmation of sales purportedly from M/s Bishan Chand Mukesh Kumar, Saraf, Delhi which bears date much prior to the calling of information by the A.O. in this case. This raises serious doubts about the genuineness of confirmation because in the normal circumstances confirmation is sought from the party only when it is required by the other party during the course of assessment or other proceedings. In the present case, it appears that this confirmation was obtained by the appellant much before the date of query raised by the Assessing officer which indicates a prior planning and pre-mediated approach. This raises serious doubts about the genuineness of the confirmation filed and in my opinion, this confirmation could not be said to be sufficient to discharge the onus of proving the sale of jewellery in the context of the following facts:- i) ....
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.... in trhe case of M/s Bishan Chand Mukesh Kumar dated 16.1.2002. "As directed, I visited the premises No.1166/202, Kucha Mahajani, Chandni Chowk, Delhi on 14.1.2002 to serve the summon on the above said party. The premises is on the 2 and there is no sign board of M/s Bishan Chand Mukesh Kumar at this premises. Local enquiry made revealed that this party is not functioning from this place. Efforts are being made to locate the present address of the party." The report received from the DDIT(Investigation) dated 25.10.2002 throws further light on the authenticity of the confirmation letters filed in this case. Contents of the letter dated 25.10.2002 is reproduced hereunder for ready reference:- Per letter No.DSDIT(Inv.) U-II(2)/2002/2003/21 dated 25.10.2002 sent to this office by Shri S.S.Jain, Dy.Director of Income-tax (Inv.), Unit-II(4), New Delhi. "Kindly refer to your letter No.205/02-03-671 dated 23 August, 2002 on the subject noted above. After going through the appraisal report the required information is submitted as under:- As per the information it was found that Sh. Manoj Aggarwal and others had been in the business of selling bogus accommodati....
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....the said letter shows that the partners of the concern M/s Bishan Chand Mukesh Kumar are known to he involved in the business of selling bogus accommodation book entries of various types for consideration of commission and they had no real business. On the basis of such information, search has been conducted u/s. 132 at the office premises and residential premises of the partners of the concern, M/s Bishan Chand Mukesh Kumar. Investigation Wing has been able to identify various bank accounts in different banks which have been opened and operated by the partners and its associates to validate the selling of bogus accommodation book entries. These bank accounts have been identified and further investigations are in progress. In spite of various enquiry letters issued by the investigation Wing, the party M/s Bishan Chand Mukesh Kumar has failed to appear and confirm the purchases made from the appellant. Considering the totality of facts and circumstances of this case including the various reports, referred to above, I am of the opinion that firstly confirmation letter filed by the appellant or received subsequently by the AO cannot be said to be sufficient to discharge the onus wh....
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....es involved in the said case on merits including the issue relating to genuineness of the transactions of purchase and sale of jewellery. Assuming the possibility of such an eventuality and keeping in view that the material collected during the course of assessment proceedings in the case of M/s Bishan Chand Mukesh Kumar , which has already been filed and admitted as additional evidence in the case of Tejinder Singh, HUF, can still be utilized, Shri S.D.Kapila has urged that the case of Shri Tejinder Singh should be restored to the file of the Assessing Officer to consider and decide the same afresh in the light of the said additional evidence. He has submitted that this will also facilitate in giving an opportunity to the assessee to cross-examine the deponents whose statements have been sought to be relied upon by the department and also to rely upon the letters/affidavits of the said deponents which have been filed by him and admitted by the Tribunal as additional evidence. He has contended that this will enable the assessing officer to reach a proper conclusion after taking into consideration this entire evidence which has been gathered after the completion of assessment in ....
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....im of the assessee about genuineness of the jewellery transactions as totally unbelievable or outrageous. We have also found that no evidence of any consequence was unearthed during the course of search to directly show that the jewellery business was bogus and that it was only accommodation entry business. On the other hand, the evidence brought on record by the assessee especially the evidence in the form of sales tax assessment order wherein the transactions of purchase and sale of jewellery were accepted by the sales-tax authorities was found to be reliable bus us to support the case of the assessee that the relevant transactions of purchase and sale of jewellery were genuine. As the issue involved in the case of Bemco/Manoj Aggarwal as well as all the material facts relevant thereto including the evidence brought on record are similar to the case of M/s Bishan Chand Mukesh Kumar, we are of the view that the decision rendered in the case of Bemco/Manoj Kumar on the said issue is applicable even in the case of M/s Bishan Chand Mukesh Kumar with equal force and this being so, no meaningful purpose will be served by sending the matter back to the Assessing Officer for reconsiderat....
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....e automatically applied to the BCMK and to the assessee without considering the merits of the case of the assessee could not be justified. She, however, submitted that the assessee has furnished sufficient explanation in support of genuineness of its claim, as noticed in the impugned order. She also relied upon the judgment of Hon'ble Supreme Court in Commissioner of Income-Tax, Orissa Vs. Orissa Corporation P. Ltd. [1986] 159 ITR 78 to contend that it was for the revenue to examine source of income of the creditor/ purchaser of the jewellery, in absence of which addition in the hands of the assessee could not be made. Once the assessee discharged the onus, addition under Section 68 was not justified. 6. We are satisfied that the finding recorded by the Tribunal that addition under Section 68 in respect of alleged bogus sale of jewellery was not justified is perverse. The Tribunal has not considered the merits of the genuineness of the transaction of sale by the assessee. In the light of finding recorded by the assessing officer and the CIT(A), it was expected that the Tribunal should have gone into the question of identity of the jewellery declared under the VDIS and jew....