AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2009 (7) TMI 2
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....999. 3. The respondent (`assessee' for short) is a Dealer in Diamonds. The assessee had declared diamond jewelery weighing 65.75 carats under the Voluntary Disclosure of Income Scheme, 1997 ('VDIS, 1997' for short). The said declaration was accepted by the department and a certificate was issued to the assessee under VDIS, 1997. 4. In the return of income filed for A.Y. 1998-1999, the assessee claimed to have sold the said jewelery declared under VDIS, 1997 to M/s. Dhananjay Diamonds, a proprietary concern of Vishnudatt Trivedi on 20-01-1999 for Rs.10,35,562/-, thereby earning long term capital gains amounting to Rs.1,75,520/-. The said return was processed under Section 143(1)(a) of the Act on 23-7-1999. 5. On 30-3-2000, the Income Tax authorities conducted a survey at the business premises of Mr.Trivedi, Proprietor of M/s. Dhananjay Diamonds. During the course of survey proceedings statement was recorded on 30/3/2000 wherein Mr. Trivedi stated that he was in the business of trading and manufacturing of diamonds. However, in this statement recorded under section 133A of the Act on 31-3-2000, Mr. Trivedi confessed that he was not doing actual business of trading and manufacture ....
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....nt recorded on 31-3-2000 under Section 133A of the Act. It is contended that the retraction letter of Mr. Trivedi though dated 4-4-2000 was in fact posted on 11-4-2000 and was received by the A.O. on 17-4-2000. These facts clearly show that the retraction was only an after-thought and ought to have been discarded. It is contended that Mr. Trivedi had failed to explain as to how the admission made by him on 31-3-2000 was under undue pressure exerted by the department and if the said statement was under undue influence, then why he took 11 days to retract his statement recorded on 31-3-2000. It is contended that there is inconsistency in the retraction of Mr. Trivedi because, in the re-assessment proceedings, although Mr. Trivedi claimed that the transaction with the assessee took place through his family members, he could not even state the names of the family members through whom he allegedly entered into the transaction with the assessee. In these circumstances, it is contended that the A.O. was justified in making the additions. 10. Relying upon two decisions of the Calcutta High Court in the case of CIT Vs. Precision Finance Pvt. Limited 208 ITR 465 (Cal.) and CIT V/s. United C....
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....essee under VDIS, 1997. 13. When the assessee claimed that the above diamond jewellery declared under VDIS 1997 has been sold to Dhananjay Diamonds on 20-1-1999 for Rs.10,35,562/-, the same was accepted in the original assessment, however, in the reassessment order, the claim is disbelieved mainly by relying on the statement of Mr. Trivedi recorded on 31/3/2000, wherein he had stated that the transactions recorded in his books are hawala transactions. It is further held that the above statement is corroborated by the non-availability of the diamond jewellery allegedly sold by the assessee to Dhananjay Diamonds and the bank accounts of Mr. Trivedi show that he had received cash before issuing cheques to various parties including the assessee. 14. In the present case, the statement of Mr. Trivedi recorded on 31-3-2000 has been retracted by him vide letter dated 4-4-2000 (received by the A.O. on 17-4-2000). In the light of the decision of the Apex Court in the case of Vinod Solanki V/s. Union of India reported in 2008 (16) Scale 31, the retracted confession of Mr. Trivedi can be relied upon only if there is independent and cogent evidence to corroborate the statement of Mr. Trivedi ....
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....ellery sold by the assessee is not found with the purchaser cannot be a ground to hold that the transaction was bogus and the consideration received by the assessee was the undisclosed income of the assessee. 18. Assuming the revenue is right in its contention that the sale did not involve actual delivery of diamond jewellery, then, unless it is established that the assessee had passed on his undisclosed income to Mr. Trivedi, it cannot be said that the amount received by the assessee from Mr. Trivedi represented the undisclosed income of the assessee. In the present case neither Mr. Trivedi in his statement recorded on 31-3-2000 had stated that the assessee had given the cash amount of Rs.10,35,562/- nor in the reassessment proceedings the A.O. has gathered any evidence to that effect. In fact, in the statement recorded on 31-3-2000, Mr. Trivedi had stated that he used to received cash through Mr. Sanjay Saxena. There is nothing on record to suggest that the assessee had given cash to Mr. Sanjay Saxena. The A.O. has not chosen to examine Mr. Sanjay Saxena to establish that cash was given by the assessee to Mr. Trivedi though Mr. Sanjay Saxena. Perusal of the re-....