ITO, Wd.-2(4),, Solapur v. Smt. Usha Bhagwan Shinde,, Solapur

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I.C. SUDHIR AND SHRI D. KARUNAKARA RAO ITA NO.1338/PN/05 (ASSTT. YEAR 1998-99) I.T.O WARD 2(4) SOLAPUR .... APPELLANT VS. SMT. USHA BHAGWAN SHINDE 219-A/220 GOLD FINCH PETH SOLAPUR PAN NO.ACLPS9241C . RESPONDENT ITA NO. 1340/PN/05 (ASSTT. YEAR 1998-99) I.T.O WARD 1(2) SOLAPUR .... APPELLANT VS. SMT. KALPANA GOKUL SHINDE LAXMI PETH DAMANI NAGAR SOLAPUR PAN NO.ACLPS9241B . RESPONDENT ITA NO. 1361/PN/05 (ASSTT. YEAR 1998-99) I.T.O WARD 2(3) SOLAPUR .... APPELLANT VS. SMT. ANJANABAI DATTATRAY SHINDE 219-A/220 GOLD FINCH PETH SOLAPUR PAN NO.ADEPS4452A . RESPONDENT ITA NO. 1338 1340 1361 1363 & 1365/PN/05 A.Y 1998-99 PAGE 2 OF 4 ITA NO. 1363/PN/05 (ASSTT. YEAR 1998-99) ACIT CIRCLE-2 SOLAPUR .... APPELLANT VS. SHRI GOKUL DATTATRAY SHINDE 219-A/220 GOLD FINCH PETH SOLAPUR PAN NO.ADWPS3173P . RESPONDENT ITA NO. 1365/PN/05 (ASSTT. YEAR 1998-99) ACIT CIRCLE-2 SOLAPUR .... APPELLANT VS. SHRI GANPAT DATTATRAY SHINDE 219-A/220 GOLD FINCH PETH SOLAPUR PAN NO.ADWPS3174L . RESPONDENT APPELLANT BY : SHRI ABHAY DAMLE RESPONDENT BY : SHRI K. SHRINIVASAN ORDER PER D. KARUNAKARA RAO AM THESE FIVE APPEALS ARE FILED BY THE REVENUE AGAINST THE FIVE DIFFERENT ORDERS OF THE CIT(A)-III PUNE COMMONLY DATED 28-02- 2005 FOR THE COMMON ASSESSMENT YEAR 1998-99. THE ISSUES INVOLVED IN ALL THESE APPEALS ARE IDENTICAL AND IT RELATES TO THE ADDITION U/S 69C OF THE ACT IN VOLVING VDIS LINKED ASSETS. HENCE ALL THESE APPEAL ARE CONSOLIDATED AND HEREBY D ECIDED BY THIS CONSOLIDATED ORDER. 2. AT THE VERY OUTSET LD. COUNSEL FOR THE ASSESSEE ME NTIONED THAT THIS IS THE CASE OF MAKING OF ADDITIONS U/S. 69C IN RESPECT OF T HE SALE PROCEEDS RECEIVED ON SALE OF THE DIAMOND JEWELRY / OTHERS WHICH WAS OTHERWI SE DISCLOSED SUCCESSFULLY UNDER VDIS. LD. COUNSEL MENTIONED THAT THE REVENUE A LLEGED THAT THE GALAXY EXPORTS OF KAML KUMAR JOHRI / HARIOM SHARMA IS INVOLVED IN ENTERTAINING THE ACCOMMODATION / HAWALA ENTRIES AND ASSETS DISCLOSED UNDER THE VDIS ARE NONEXISTENT AND THEREFORE THE SALES OF SUCH NONEXIST ENT JEWELRY IS A BOGUS ITA NO. 1338 1340 1361 1363 & 1365/PN/05 A.Y 1998-99 PAGE 3 OF 4 TRANSACTION. FURTHER LD. COUNSEL MENTIONED THAT IT I S A SETTLED MATTER AT THE LEVEL OF MUMBAI TRIBUNAL THAT THE GALAXY EXPORTS IS A GENUINE CONCERN AND THEREFORE THE ALLEGED ACCOMMODATION ENTRIES INVOLVING GALAXY EXPORT ARE GENUINE. LD. COUNSEL RELIED ON THE DECISION OF THE T RIBUNAL IN THE CASE OF UTTAMCHAND JAIN 103 ITD 1 (MUM) TO SUBSTANTIATE HI S ARGUMENT AND REQUESTED FOR DISMISSING THE APPEALS OF THE REVENUE. HE MENTION ED THAT THE SAID DECISION IS AFFIRMED BY JURISDICTIONAL HIGH COURT REPORTED IN 320 IT R 554 (BOM). LD. COUNSEL ALSO MENTIONED THAT THE IMPUGNED ORDERS HAVE TO BE C ONFIRMED AS THE COMMISSIONER (APPEAL) DECIDED RELYING ON THE ORDER OF T HE COORDINATE BENCH OF THE ITAT. LD. COUNSEL RELIED ON THE RATIO IN THE CASE OF UTTAMCHAND JAIN 103 ITD 1 (MUM) FOR IDENTICAL PROPOSITION. 3. ON THE OTHER HAND LD. DR FOR THE REVENUE STATED T HAT THE DECISIONS ARE NOT FINAL AND THE DEPARTMENT IS IN APPEAL BEFORE THE HONBLE HIGH COURT AND THEREFORE THE ORDER OF THE CIT(A) SHOULD NOT BE CONFIRM ED. 4. WE HAVE HEARD BOTH THE PARTIES AND RELIED ON THE REL EVANT JUDGMENTS ON THE RECORDS. WE FIND THAT THE AO DISBELIEVED THE TRAN SACTION HOLDING THAT THE SALE OF DECLARED ITEMS AS A MERE PAPER TRANSACTION. H E FURTHER DISBELIEVED THE FACT THAT THE RECEIPT OF THE SAID AMOUNTS FROM M/S GA LAXY EXPORTS ARE NOT A GENUINE TRANSACTION. THE ADDITION WAS MADE U/S 69C OF THE ACT. CIT (A) DELETED THE SAME RELYING ON THE DECISION OF THE BOMBAY TRIBUN AL IN THE CASE OF K K JOHRI. IDENTICAL APPEALS CAME-UP BEFORE US INVOLVING THE SI MILAR SALES OF THE GALAXY EXPORTS AND RECEIPT OF THE MONEY FROM THE SAID CONCERN. THIS CONCERN UNDISPUTEDLY RELATES TO SHARMA AND JOHRI CONCERNS. M/S GALAXY EXPORTS IS FOUND TO BE A GENUINE CONCERN BY THE TRIBUNAL WHILE DEALING WITH THE BLOCK ASSESSMENT PROCEEDINGS OF THE SHARMA AND JOHRI GROUP OF CASES. THE REFORE THE GENUINENESS OF TRANSACTIONS OF SALE OF THE DECLARED JEWELLERY IS B EYOND DOUBT. RESULTANTLY THE CREDIT OF THE TRANSACTIONS INVOLVING THE SALE PRO CEEDS RECEIVED FROM M/S GALAXY EXPORTS AND OTHERS IS ALSO GENUINE TRANSACTION AND NOT A PAPER TRANSACTION AS HELD BY THE AO. CONSEQUENTLY THE AP PEAL OF THE REVENUE IS COVERED AGAINST THEM BY VARIOUS ORDERS OF THE TRIBUNAL I NCLUDING THAT OF NEETA V RIRA (ITA 5022/MUM/05) AND SURESH CHANDRA GANATYRA (VI DE ITA NO 2815/MUM/06). FURTHER THE HONBLE BOMBAY HIGH COURT S JUDGMENTS IN THE CASES OF H N LAKHANI (147 ITR 552) AND INDER V NANKA NI ITA NO 128 OF 2009 DATED 24.2.2009 AFFIRMS THE POSITION IN FAVOUR OF TH E ASSESSEE. CONSEQUENTLY THE APPEAL OF THE REVENUE IS COVERED AGAINST THEM BY THE ABOVE REFERRED ORDERS. ACCORDINGLY THE GROUNDS OF THE REVENUE ARE DISMISSED . ITA NO. 1338 1340 1361 1363 & 1365/PN/05 A.Y 1998-99 PAGE 4 OF 4 5. IN THE RESULT ALL THE FIVE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON 09 TH FEBRUARY 2011 SD/- SD/- (I.C. SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED THE 09 TH FEBRUARY 2011 R COPY OF THE ORDER IS FORWARDED TO : 1. DEPARTMENT 2. ASSESSEE 3. CIT(A)-III PUNE 4. CIT-IV PUNE 5. D.R. ITAT A BENCH BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE