2015 (10) TMI 463

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.....271(1)(c) of Rs. 24,34,865/- levied on account of undisclosed source of income." 2. At the outset, we have been informed that the impugned addition on which the penalty in question was levied had already been deleted by ITAT 'A' Bench Ahmedabad in assessee's own case titled as "M/s. Priyanka Gems (ITA No.1958/Ahd/2008) A.Y. 2005-06, order dated 31st May, 2010. This fact was duly mentioned by learned CIT(A) while deleting the penalty as under: "2. This is an appeal against penalty of Rs. 2434865/- imposed by the A.O. u/s. 271(1)(c) of the IT. Act. The facts are that the total income of the appellant was determined at Rs. 71,21,483/- after making an addition of Rs. 67,93,643/- being value of 485.26 carats of diamonds found and ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....leted by C1T(A) and the revenue did not prefer second appeal. We find that the Jangad i.e. the certificate of entrustment was left to be attached with the packet of diamonds, however, in the packet, the name of the sender and the name of the receiver were mentioned as Mr. Dakshesh and Mr. Prakash respectively and the address of the receiver was also mentioned in the packet. We further find from the Id. counsel that the goods were being sent from Mumbai office to Surat office, which was confirmed immediately after the search by assessee's partner Shri Prakash before authorized officer on 29-07-2004 and in his statement recorded, he confirmed the movement of the goods from Mumbai to Surat by assessee. According to assessee Mr. Dakshesh is....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....1 cent as is evident from the export bills. According to assessee, it had exported small diamonds as is evident from the export invoice No.3 dated 17-08-2004 where it was mentioned that 203.32 carats were exported having 895 pieces per carat and this means that there are 85 pieces in 1 carat of diamond and so one piece of diamond is having average 1.17 cents of weight. According to assessee there is no practice of mentioning the pieces in the local purchase bills and only weights of carats/cents are mentioned. We find that both the sellers i.e. Someya International and Harsona Diamond are assessed to tax having GST and CST numbers and assessee's average sale price is Rs. 14,527/- per carat which shows that assessee exported small diamon....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....pporting documents in this regard and not only this, assessee was able to establish the correlation of diamonds seized in the course of search with the purchases made in the year relevant to assessment year 2003-04 and the return of income for assessment year 2003-04 was filed much before the date of search and in the audited financial statements of the years ended on 31-03-2003, 31-03-2004, 31-03-2005 and closing stock shown by assessee includes the stock seized. We further find that the valuation shown by assessee in accounts in respect of seized diamonds is Rs. 67,66,360/- which is almost at par with the valuation made by Department at Rs. 67,93,643/-. The opening stock and closing stock for the year 2003-04 was the same as there was no ....