2012 (10) TMI 1067

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.... silver and diamonds. The return of income for the year under consideration was filed by it on 26-10-2006 declaring total income of Rs. 14,043/-. From the perusal of profit & loss account and balance sheet filed by the assessee along with the said return, it was noticed by the AO that the assessee has claimed to have stock of jewellery of Rs. 2,10,65,665/-. As required by the AO, the assessee explained that the said stock of jewellery was brought forward from the earlier years and the source of the same was conversion of jewellery owned by the partners into stock of the firm. In support of this explanation, copies of wealthtax returns of the partners for the assessment year 2002-03 were filed by the assessee along with the copy of partnersh....

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....rm of jewellery said to be inherited and I find that the department has accepted the declaration of the appellant in the concerned year U/s 69, the previous year when such deemed income shall be taken to have accrued shall be year in which the investment was first recorded. Once it is accepted in that year, it is not open to the Assessing Officer to doubt it in the subsequent year on suspicion, surmises and conjectures. The appellant has also filed the Wealth tax returns of the partners nin support of his contention and records show that they have been accepted by the department. The onus was on the appellant to prove the genuineness of the transaction and the appellant in this case has proved the same. The jewellery has been declared in th....

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....llant in the year, one cannot doubt trade in respect of stock already existing. In any case, the question is the introduction of capital in form of stock in trade by partners. The same, I find, stands proved and accepted as receipt by way of Will in earlier years therefore, there seems to be no reason for doubting it in the hands of the appellant in this year. The partners, I find, have filed personal returns of income in all the years, wherein the inheritance of jewellery has been declared and in Assessment Year 2003-04 the partners have individually complied with the provisions of section 43(5), when they converted the assets into stock in trade. This stands accepted by the department. As the partners have declared Long Term Capital Gains....