TaxTMI 
TaxTMI 
2017 (12) TMI 1733
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....e learned CIT (A) is not justified in confirming the addition of Rs. 11,21,625/- under section 68 of the Act on the facts and circumstances of the case. 4. The learned CIT(A) was not justified in confirming the finding of the AU that the nomenclature as per the declaration differed from the sale invoice and hence the said sale of Gold, Silver and Diamonds different from the one found in the declaration made on the facts and circumstances of the case. 5. The learned CIT(A) was not justified in relying on the observations made in the earlier appellate orders to arrive at a finding that the declaration stood unproved and hence the Gold, Silver and Diamonds sold was not out of the declaration made. 6. The learned CIT(A) was not justified on facts in not considering the Gold, Silver and Diamonds on hand with the appellant as per the declaration, to be the same Gold, Silver and Diamonds sold on the facts and circumstances of the case. 7. Without prejudice to the right to seek waiver with the Hon'ble Chief Commissioner of Income Tax/Director General of Income Tax, the Appellant FIUF denies itself liable to be charged to interest under section 234B o....
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....upra). Consequently, in compliance with the directions of the Hon'ble High Court, the AO has issued the notice and asked the assessee to produce bank statements/bills of purchase and sale of gold, silver, etc., and any other documentary evidences in support of his contention that the goods sold are the same which were declared in the application filed under VDIS Scheme, 1997. In response to said notice, the assessee filed the written submissions along with some evidences which were considered and examined by the AO and he came to the conclusion that what is sold under the sale transaction claimed by the assessee in the regular return and what is declared under the VDIS 1997 are not the same goods. The AO further examined the details furnished by the assessee and after taking cognizance of the statements of the assessees made in response to show cause notices issued under section 263 of the Act, held that the jewellery sold were not the same which were declared under the VDIS scheme. He accordingly treated the entire sale proceeds as unexplained cash credit and made the addition of Rs. 11,21,625/- in the case of Shri. Basavaraj I Kamatagi, HUF and Rs. 11,08,610/- in the case of Shri....
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....s 2 Tambige-9 3 Vati-36 4 Glass-18 5 Trey-4 6 Samai-4 7 Dinner Set-1 8 Jug set-1 1. Diamonds: Stones- 291 stones 8.0 From the above table it can be observed that what is sold under the sale transaction claimed by the assessee in the regular return filed and what is declared in the application filed under the VDIS Scheme 1997 are not the same goods. The Hon'ble High Court has held that the material fact has not been considered by the Assessing Authority or the first appellate authority or the Appellate Tribunal. As the authorities have not given a finding on the material fact, a finding ahs to be given now by the Assessing Authority, as to the said material fact as to whether the assessee is able to prove that the subject matter of the goods which are sold as per the sale transactions declared under the regular returns filed for the assessment year 1998-99 is in respect of the same goods which were subject matter of a....
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....partment rakes up the issue afresh, I will also be free to withdraw the sworn statement and also take different stand convenient to me. In that case assets declared under VDIS are to be treated as not disposed off and are held by me..........." As the assessee has agitated against the additions made as per order u/s 263 of the Act, that means as per assessee's own words the assets declared under VDIS are to be treated as not disposed off and they are still held by him. If the VDIS-1997 declared assets were really disposed off, what is the reason behind assessee's making above statement? The above statement of the assessee gives scope for doubt that those VDIS declared assets are still there and what is disposed of is something else. Under the circumstances it is difficult to believe that the material fact that what is sold under the sale transaction claimed by the assessee in the regular return filed and what is declared in the application filed under the VDIS Scheme 1997 are one and the same. 11.0 Apart from the copies of VDIS Certificate, valuation reports and sale bill copies, the assessee is not able to prove what is sold under the sale transaction claimed by ....
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.... examined the details of jewellery declared in VDIS Scheme and the goods sold as per the jewellery declared. The learned DR invited our attention as a sample in the case of Shri. Basavaraj I Kamatagi (HUF) that the gold jewellery was of 1401.100 grams but the weight of gold bullion sold was at 1161.250 grams meaning thereby the jewellery declared though it may converted into bullion according to assessee was not the same as contended by the assessee. Similarly, the silver articles declared under the VDIS Scheme were of 38.710 Kgs. but the silver bullion sold was 34.900 Kgs. Therefore, it cannot be said that the silver articles declared under VDIS Scheme was sold in the form of bullion after its conversion. Again in the case of diamond also, the declared diamond stones were 291 in numbers whereas the sold diamonds were cut and polished diamonds of 291 pieces. 5. The learned DR further invited our attention that under the category of gold jewellery, certain gold jewellery i.e., Necklace, Bangles, Tops, Hangings and Rings were studded with diamonds but no sale in this regard was claimed to have been effected. Since the declared jewellery do not tally with the sold goods, the cla....
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....aration has been admittedly accepted by the revenue. If the assessee is able to prove that what is sold under the sale transaction claimed by the assessee in the regular return filed pertains to the gold jewellery and diamond which was declared in the application filed under Scheme 1997, the contention of the assessee that what is soldunder the sa1e transaction and declared under the regular returns is the gold jewellery and diamond that was subject matter of application filed under the Scheme 1997 and cannot be taxed under section 68 has to be accepted. However, if the assessee is not able to prove that the subject matter of transaction declared in the regular returns is the same goods which is declared under the application filed under Scheme 1997 and accepted by the revenue, then it is clear that the assessee is bound to pay tax on the sale transactions, as what is sold is not the property which is the subject matter of application under the Scheme 1997. This proposition cannot be disputed by the Counsel for the parties. When the finding given by the assessing authority, which is confirmed by the first appellate authority and the Tribunal in appeal is considered, it is clear tha....
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....r passing fresh orders in the light of the observations made in the body of the order." 7. Pursuant to the directions of the Hon'ble High Court, the AO has made necessary enquiries. Having noted the discrepancies in the jewellery declared under VDIS Scheme and sold, the AO came to the conclusion that the jewellery sold are not the same which were declared under VDIS as there was difference in quantities. From a careful perusal of the chart, we find that gold jewellery declared in the case of Shri. Basavaraj I Kamatagi (HUF) was at 1401.100 grams whereas the gold bullion sold was at 1161.250 grams. Short fall in the quantity of the jewellery was not explained by the assessee either before the lower authorities or before us. Under the heading gold jewellery, gold diamond items were shown as Necklace, Bangles, Tops, Hangings, Rings at 178.570 grams. Once these jewelleries were converted into gold bullion, there may be availability of diamond stones for which no explanation was furnished as to whether they were sold or not. Similar is the position of silver articles. The silver articles were declared at 39.710 Kgs, whereas silver bullion sold were at 34.900 Kgs. There was no explana....