TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1973
X X X X Extracts X X X X
X X X X Extracts X X X X
....n sale of diamonds. He submitted that subsequently, assessment proceedings were carried out under section 143(3) of the Income-tax Act, 1961 (for short 'the Act'), being the year of search, which completed vide assessment order dated 30.09.2021 wherein the following additions/ alterations were made to assessee's returned income: Computation of Income by the Assessing Officer S. No. Particulars Section Amount (in Rs. ) 1 Returned income - Rs. 87,30,27,840 2 LTCG declared on sale of diamonds derecognised - (76.18,74,668) 3 Sale consideration declared on sale of diamonds 68 82,67,44,250 4 Commission expenditure on sale of diamonds @ 0.18% of sale consideration 69C 14,88,140 5 Unexplained jewellery (Protective Basis) - 2,05,13,354 3.1 He submitted that against the aforesaid assessment order, the assessee preferred an appeal before the ld. CIT(A), which was partly allowed vide impugned order dated 24.01.2024 wherein: (i) Addition of Rs. 82,67,44,250/- under section 68 on account of sale of diamonds and consequential addition of Rs. 14,88,140/- under section 69C on account of al....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eated as unexplained cash credit under section 68 and addition was also made on account of alleged commission under section 69C of the Act and identical addition was made in assessment years 2017-18 to 2019-20. 3.7 Ld. AR further submitted that the present issues are squarely covered by ITAT order dated 20.01.2025 in the lead case of assessee's relative, Shashi Kant Chaurasia vs. DCIT in ITA Nos. 3844 & 3845/Del/2023 for AYs 2018-19 & 2019-20 wherein identical addition(s) i.e., (i) addition u/s. 68 qua sale consideration of diamonds and: (ii) addition u/s. 69C of the Act qua alleged commission expenditure, were deleted by the Tribunal and referred to pages 103 to 128 of the paper book which is the copy of the order dated 20.01.2025. 3.8 He further submitted that from the bare perusal of the decision of ITAT in case of Shri Shashikant Chaurasia, it becomes evident that all the aspects relevant to question of genuineness of the sale of diamonds made by the assessee in different AYs have attained finality and leaves no scope for any further ambiguity. The entire transaction starting from existence, to processing and subsequent sale of the diamonds have been examined by the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vailable on record. We observe that the issues involved in the present appeal are squarely covered by the decision of the coordinate Bench of the Tribunal in the case of Shri Shashi Kant Chaurasia (supra), the family member of the assessee. For the sake of brevity, the findings of the ITAT in case of Shri Shashi Kant Chaurasia (supra), which are squarely applicable to the case of the assessee, are summarized hereunder: (i) The coordinate Bench held that the existence of rough diamonds cannot be doubted having regard to the declaration of the same in IDS, 2016 being accepted by the Pr. CIT, coupled with the fact that the assessee had paid due taxes thereon. The Tribunal held that the IDS declaration is to be treated as conclusive proof of matters contained therein and is binding on all the parties including regulatory authorities. The Tribunal held that such declaration cannot be doubted by the Revenue in the light of the sovereign commitment given by the Government of India (refer paras 12 and 13); (ii) The coordinate Bench held that cutting, polishing, etc., of the rough diamonds by the job workers in Surat cannot be doubted having regard to the contemporaneous e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....can be no doubt regarding the existence of rough diamonds, activity of processing/ cutting polishing the same and sale to third party buyers (paras 29 and 33); (viii) The coordinate Bench held that gain on sale of diamonds is accepted as taxable long-term capital gain since entire holding period of the diamonds is to be considered, including the holding period of the previous owner in view of Explanation 1(i)(b) of section 2(42A) of the Act (refer paras 33 and 34); (ix) In view of the above, the coordinate Bench had deleted the addition made by observing as under: "35. In view of the aforesaid observations, we hold that the gains on sale of cut and polished diamonds is to be construed as LTCG which had already been offered to tax by the assessee in the return of income and the same cannot be treated as unexplained cash credit u/s 68 of the Act in the facts and circumstances of the instant case. Accordingly, the Ground Nos. 2 to 2.2. raised by the assessee are allowed'". (x) Since the sale proceeds of diamonds were held to be genuine, the coordinate Bench deleted the addition of commission made under section 69C of the Act (refer para 36)....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... hands of various family members as under: Name Amount (Rs.) Remarks Refer Sh Kamal Kishore Chaurasia 2,05,13,134 Addition on substantive basis by the AO vide order dated 30.09.2021 (wrongly mentioned as 30.09.2019) appeal pending there against before the CIT (A) 149-154 @150/ PB Shri Anand Kumar Chaurasia (assessee herein) 2,05,13,134 (Impugned) Addition on protective basis by the AO, deleted by the CIT (A) Pg.127, Para 6/ AO 13. He submitted that that the aforesaid jewellery and bullion were found and seized from the residential premises belonging to Shri Kamal Kishore Chaurasia where he, along with his sons, Sh. Rajiv Chaurasia, Sh. Arpit Chaurasia and their respective family members reside. He further made reference in this regard to the following valuation report(s) drawn up by the search team and forming part of the panchnama: S.No. Person found to be in possession of jewellery/bullion Valuation Report - Page No. of PB Bullion Jewellery 1 Smt. Dipti Chaurasia (wife of Sh. Arpit Chaurasia) 136 139 - 142 2 Smt. Tarang Chaurasia (wife of Sh. Rajiv Chaurasia) 137 143 - 145 3 ....