TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 1991
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.... both the cases are identical except change of amount involved and therefore the facts of the case of Sh. Anil Kumar Bansal are only discussed in forthcoming parents. 3. The briefly stated facts of the case of Shri Anil Kumar Bansal(ITA No. 148/Del/2007) are that a search and seizure operation was conducted under section 132(1) of the Income-tax Act, 1961 (in short the 'Act') in the cases of M/s Bemco Jewelers Private Limited and its directors Sh. Manoj Aggarwal and Sh. Bishan Chand. On the basis of the documents seized during the course of search operation, proceedings under section 158 BD read with Section 158 BC of the Act were initiated in the case of M/s Bishan Chand Mukesh Kumar i.e. a partnership firm. The Assessing Officer having jurisdiction over the said case held that the material collected during the course of search as well as during the post search enquiries were sufficient to show that jewellery claimed to be purchased by the said parties including M/s Bishan Chand Mukesh Kumar from different persons were bogus and same were merely accommodation entries given against payment made in cash. As the assessee was one of such person, to whom such accommodation entries wer....
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....engaged only in providing accommodation entries in the garb of bogus transaction of purchase and sale of jewellery, bogus long-term capital gain by channelizing income of beneficiaries against commission income and the assessee being one of such beneficiary of accommodation entry. The Assessing Officer also noted that no details in respect of bank account of the assessee, as business activity and other details were furnished in spite of repeated request and the affidavit filed by the assessee of Shri Bishan Chand merely shows nexus between the entry operators and the beneficiary assessee. The Assessing Officer also calculated amount of commission payable at the rate of 0.50% for obtaining accommodation entry, which was worked out to Rs. 44,672/-and in this manner, the Assessing Officer made total addition of Rs. 89,79,189 ( 89,34,517+ 44,672) to the returned income of the assessee in assessment order passed under section 143(3)/147 of the Act on 24/03/2006. 7. Aggrieved with the order of the Assessing Officer, the assessee preferred appeal before the Ld. CIT(A) challenging both the initiation of reassessment proceedings as well as merit of the addition. The Ld. CIT(A) though uphel....
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....ry by the asseesee to Bishan Chand Mukesh Kumar/ Bemco Jewellers. Since the Tribunal has not done that, we are setting aside the impugned orders and are remitting the matters to the Tribunal for considering this aspect of the matter so that the Tribunal can return a clear finding in respect of each of the matters as to whether the alleged transaction of sale of jewellery was genuine or pot" . 9. Before us, the Ld. counsel filed a paper book containing pages 1 to 78 inter alia including copy of affidavit of Bishan Chand and relied on the submission made before the Ld. CIT(A). The Ld. Counsel also relied on the decision of the Tribunal dated 19/08/2016 in the case of ITO Vs. Sanjeev & Sons (HUF) in ITA No. 362/Del/2007 for Assessment Year 1998-99. The Ld. Counsel submitted that this is one of the cases out of the 22 appeals and the Tribunal has deleted the addition in the said case. He submitted that facts and circumstances of the instant case being identical with the facts and circumstances of the case of Sanjeev & Sons (HUF) (supra), the addition in the instant case also need to be deleted. The Ld. DR on the other hand, relied on the order of the Assessing Officer and obje....
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....that it was as a result of sale of jewelry. In the circumstances, the onus was on the assessee to establish that it was genuine sale. The assessee was required to produce Sh. Bishan Chand alongwith documentary evidences before the Assessing Officer for discharging his onus. 14. The Ld. Counsel further contended that purchases and sales details shown by M/s Bishan Chand Mukesh Kumar in the sales tax returns were accepted by the Sales Taxes Department and thus the purchases shown by M/s Bishan Chand Mukesh Kumar cannot be doubted. In our view, the details purchases and sales have been filed by the assessee in the return of sales Department by way of self declaration and no physical verification has been made by the sales Department, and thus filing return before the sales Department is not conclusive evidence of sale of jewellery by the assessee to M/s Bishan Chand Mukesh Kumar. 15. The Ld. CIT(A) observed that the Assessing Officer has not brought on record any evidence whether the jewellery is still in the possession of the assessee. In our opinion, to establish whether the transaction of the sale was genuine or not, was on the assessee and not on the Assessing Officer. Thus, the....
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....n Chand Mukesh Kumar for the year was completed on the turnover of Rs. 134 crores and the transaction of sale of jewellery was confirmed by way of affidavit of Sh. Bishan Chand and all these documentary evidences/orders were submitted before the AO. However, on perusal of the assessment order of assessee (HUF) shows that that the AO has recorded following categorical finding: "The assessee was required to furnish documentary evidence to the sale of this jewellery as also books of accounts, vouchers and bank passbook. A number of opportunities were given to the assessee but the assessee failed to furnish any information or supporting evidence. The 7 ITA No.4200 & 4199/Del./2006 assessee was specifically asked to furnish evidence to the acquisition of the above said jewellery. In the absence of any evidence, I have reason to belief that this is accommodation entry and has been routed through a sale bill by obtaining draft/cheque against payment of cash from M/s. Bishan Chand Mukesh Kumar." 7.1 In view of the above contradictions, it is not proper to record a decisive finding based on examination of such evidences, alleged to have been produced before the AO. Secondly, the Sales T....
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..../2006 jewellery and denied that they are providing only accommodation entries. However, here we find that the ld. Assessing Officer appears to have not summoned the said purchaser for verification of the actual purchase/sale transaction of the impugned jewellery. Therefore, before repudiating this stand of the assessee, the AO is required to summon the alleged purchaser of impugned jewellery and to record its statement to ascertain the truth. All these exercises are necessary to be made before deciding the issue in view of the directions of Hon'ble Jurisdictional High Court. Such exercises/enquiries, being not possible at the stage of Tribunal, can be conducted at the stage of Assessing Officer well. The ld. AR was asked if he has any other evidence to establish that the impugned sale of jewellery is recorded in any of books of a/c of purchaser, but he showed his inability to presently adduce any such direct evidence before us. On the other hand, the ld. DR also could not prove by any positive evidence to establish that the impugned sale of jewellery was not recorded in and verifiable from the books of alleged purchaser. In present of all these facts, we, therefore, think it approp....
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....ly with the items declared in the valuation report filed under VDIS Scheme The sale of jewellery in question and capital gain hereon was duly declared in the return for AY 1998-99 filed on 14.07.1998 much before the date of search in the case of M/s Bishan Chand Mukesh Kumar Saraf. This return of income has been filed and accepted much before the date of notice issued u/s 148 in case of the appellant. Copies of Income-tax return along with computation of income chargeable under the head capital gains, bills etc. have been furnished in support which have been placed on record. Besides the above, the jeweller himself has also confirmed the sale of jewellery by way of an affidavit filed in support, copy of which has also been placed on record. 8.1 There is no dispute that the assessee has made a disclosure under VDIS, 1997. The declaration was accepted by the CIT vide certificate issued under section 68(2) of the VDIS, 1997. The assessee got the valuation done from registered valuer and filed the valuation report along with the VDIS declaration. Since under the VDIS, it has been provided that such disclosure when accepted offers complete immunity to the declarant in respect of the i....
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....o not confronted with any such evidence during the course of assessment proceedings despite having made a request in writing in this regard. The detailed submissions made by the appellant during the course of the assessment proceedings have been rejected in one go on the ground that in view of the circumstantial evidence as per discussion made in the assessment order of M/s Bishan Chand Mukesh Kumar Saraf, it was apparent that the assessee had not made actual sale of jewellery but merely obtained accommodation entry through device of sale of jewellery. In fact, the onus to prove so clearly lied on the shoulders of the department and not on the appellant, more so in the absence of any evidence brought on record to support any such allegation. The appellant, on the other hand, has furnished incontrovertible evidence in support of his claim of purchase/sale of jewellery. The appellant has thus discharged his onus of proving the transaction. The addition made by the Assessing Officer by considering that the appellant has introduced his own unaccounted money as his income from sale of jewellery and the entire transaction was nothing but mere accommodation entries can, therefore, at be....
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....e Long Term Capital Loss as declared will have to be allowed in the hands of the assessee. The Assessing Officer is, accordingly, hereby directed to take the Long Term Capital Loss on sale of jewellery at Rs. 5,36,074- as declared by the appellant in his return of income. In the result, the appeal is partly allowed." 4. On the outset Ld.AR placed on record the decision passed by Hon'ble Allahabad High Court in the case of CIT vs. Mohan Lai Aagarwal, reported in (2013) 35 taxman.com 258, wherein Ld.AR submits that Hon'ble High Court has decided the issue on identical facts. We have perused the submissions of Ld-AR on the basis of the order passed by Hon'ble Allahabad High Court. 4.1. In the facts of the Acit Circle 30 (1), vs Gunvir Kumar Jain, on 4 April, 2018 present case Hon'ble High Court, while remanding the issue, directed this Tribunal to independen*_ examine each of the case and return a specific finding, as to whether there was a genuine transact!:: of sale of jewellery by assessee to M/s Bishan Chand Mukesh Kumar/Bemco Jewellers. 4.2. Thus il is very clear from the specific direction by Hon'ble High Court that, jewellery declared by assessee under Vol....
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....ntry and there is no real sale. This allegation is based on the facts gathered by the investigation wing where the jeweler has confessed the same. Hence we also direct the assessee to produce jeweler, in person, along with the (i) books of accounts of jeweler (ii) treatment of sale of jewelry by the assessee in books of jeweler (iii) the impact in the assessment order of the jewelers of this sale whether the jeweler has accepted it is real sale or merely an accommodation entry (iv) Any other details regarding the purchase of jewelry from assessee The assessee is directed to produce jeweler with these details before the Id AO within three months from the date of receipt of this order. The Id AO may examine the jeweler with respect to his books of accounts as well as the earlier allegation of accommodation entry provided by the jeweler and then examine the issue afresh and decide the issue of genuineness of sales of jewelry. If the assessee fails to produce the jeweler along with necessary details as directed, Ld AO may decide the issue on merit as per facts available on record. In the result, appeal filed by the revenue is allowed for statistical purposes. CO.120/Del/07:....