2025 (6) TMI 1914

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....r referred as the Act] relating to the Assessment year 2016-17. 2. Brief facts of the case is that the assessee is an individual and engaged in the business of trading of Textiles. For the Asst. Year 2016-17 the assessee filed her original return of income on 23.03.2017 declaring total income of Rs. 17,46,570/-. During the course of assessment proceeding the AO noticed that there was difference in opening balance of capital account amounting to Rs. 2,48,60,376/- in as much as the closing balance in capital account as on 31.03.2015 was Rs. 2,30,65,819/- whereas opening balance as on 01.04.2015 was Rs. 4,81,25,160/-. Further the AO noticed that the assessee claimed Long Term Capital Gain of Rs. 12,92,714/- on sale of diamonds having original....

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....ced a gift deed dated 23.08.1988 evidencing receipt of diamonds from her husband on the occasion of the first birthday of her son. It was further demonstrated that the diamonds worth Rs. 1.15 crores were sold during the year and remaining diamonds worth Rs.1.35 crores were reflected in the balance sheet as on 31.03.2016 and also the capital gain arising on sale was offered to tax. 4.1. With respect to the sale of diamonds, the Ld. CIT(A) observed that the assessee furnished confirmations from 49 buyers, PAN details, her own and buyers' bank statements, and a letter from Axis Bank confirming the transaction trail. Further, there was no rebuttal by the AO either in assessment order or during appellate proceedings on the genuineness or credit....

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....dition was made merely on the ground that the diamonds were not recorded in earlier balance sheet. But the assessee has explained the omission as inadvertent, since the diamonds received as gift valuing to the extent of Rs. 1.15 crores were sold during the year [5440.2 carats] and the balance Rs. 1.35 crores [6359.8 carats] were still lying with the assessee as at the end of the year which is evident from the copy of the balance sheet as on 31-03-2016 which was submitted during the course of assessment proceedings. It is appropriate to reproduce the replies letter dated 12-12-2018 and 20-12-2018 filed by the assessee before the Assessing Officer as follows: "With reference to notice dated 06/12/2018 regarding Assessment proceedings for A.....

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....erusal. Further for sales consideration on sale of Diamonds, I have already provided the confirmations from all the parties to whom I have sold the diamonds." Further the assessee also substantiated the claim by offering LTCG on their sale. The Ld AO neither doubted about the credit worthiness, identity of the donor nor the occasion for the gift, thus the assessee discharged its primary onus cast upon it clearly. Therefore, the Ld CIT[A] was correct in deleting the addition made u/s.68 of the Act on account of unexplained capital account difference. We do not find any infirmity in the order passed by the Ld CIT[A] which requires any interference. Hence this ground raised by the Revenue is devoid of merits and liable to be dismissed. 7. Re....