THE ITO 19(3)-4, v. MRS. SANJAY MALHOTRA, MUMBAI

ITA 4422/MUM/2007 | 1998-1999
Pronouncement Date: 21-04-2010 | Result: Dismissed

Appeal Details

RSA Number 442219914 RSA 2007
Assessee PAN AABPM5629G
Bench Mumbai
Appeal Number ITA 4422/MUM/2007
Duration Of Justice 2 year(s) 10 month(s) 13 day(s)
Appellant THE ITO 19(3)-4,
Respondent MRS. SANJAY MALHOTRA, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted J
Tribunal Order Date 21-04-2010
Date Of Final Hearing 09-04-2010
Next Hearing Date 09-04-2010
Assessment Year 1998-1999
Appeal Filed On 08-06-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI PRAMOD KUMAR ( AM ) ITA NO. 4422/MUM/2007 ASSESSMENT YEAR : 1998 - 99 INCOME TAX OFFICER WARD - 19(3) - 4 ROOM NO.304 PIRAMAL CHAMBERS LAL BAUG PAREL MUMBAI - 400 0 12 . ..( APPELLANT ) VS. MR. SANJAY MALHOTRA 6/11 SILVER CRAFT PALI MARKET BANDRA(W) MUMBAI - 400 0 50 . ..( RESPONDENT ) P.A. NO. ( AABPM 5629 G ) APPELLANT BY : MS. M. KHARE RESPONDENT BY : SHRI M.S. MATHURIA O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 29.3.2007 PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEAR 1998 - 99. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETURN DECLARING AN INCOME OF RS. 4 86 555 / - . THE INCOME COMPRISED OF BUSINESS INCOME LONG TERM CAPITAL LOSS ON S ALE OF LOOSE DIAMONDS AND INCOME FROM OTHER SOURCES. THE RETURN OF ITA NO. 4422/M/07 A.Y: 98 - 99 2 THE ASSESSEE WAS ACCEPTED U/S.143(1) OF THE INCOME TAX ACT 1961 (THE ACT). SUBSEQUENTLY THE CASE WAS RE - OPENED U/S.147 OF THE ACT ON ACCOUNT OF REASONS RECORDED WHICH EMANATED FROM THE S EARCH AND SEIZURE ACTION IN THE CASE OF SHARMA AND JOHARI GROUP . IN THE RETURN OF INCOME THE ASSESSEE INTERALIA HAS SHOWN A LONG TERM CAPITAL LOSS OF RS. 21 422 / - ON ACCOUNT OF SALE OF JEWELLERY WHICH WAS EARLIER DECLARED UNDER VDIS 1997. THE SAID DECLARATI ON WAS ACCEPTED BY THE LD. CIT MC - I X U/S.68 OF THE VDIS. THE ASSESSEE SOLD JEWELLERY TO M/S. GALAXY EXPORT FOR A SUM OF RS. 17 86 272 / - . HOWEVER THE ASSESSING OFFICER ON THE BASIS OF SEARCH AND SEIZURE IN THE CASE OF SHRI KAMAL KUMAR JOHARI & SHRI HARI O M SHARMA UNRELATED TO THE ASSESSEE WAS OF THE VIEW THAT THE SALE OF JEWELLERY TO M/S. GALAXY EXPORT WAS NOT GENUINE. HE ACCORDINGLY TREATED THE SALE OF RS.17 86 272/ - AS UNDISCLOSED INCOME AND ADDED THE SAME U/S.68 OF THE ACT . APART FROM THIS THE ASSESSIN G OFFICER ALSO ADDED RS.1 42 900/ - U/S.69C OF THE ACT ON THE GROUND THAT EXPENDITURE HAS BEEN INCURRED BY THE ASSESSEE FOR OBTAINING THE BOGUS BILLS AND ACCORDINGLY COMPLETED THE ASSESSMENT AT AN INCOME OF RS. 23 94 293 / - VIDE ORDER DATED MARCH 2006 PASSE D UNDER SECTION 14 4/ 147 OF THE ACT. ON APPEAL THE LD. CIT(A) FOLLOWING THE ORDERS OF THE ITAT ON THE ABOVE ISSUES DELETED THE ADDITION S MADE BY THE ASSESSING OFFICER. ITA NO. 4422/M/07 A.Y: 98 - 99 3 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE DELETION OF ADDITION OF RS. 19 29 160 / - MADE BY THE ASSESSING OFFICER AS UNDISCLOSED INCOME AND UNEXPLAINED EXPENDITURE . 4. AT THE TIME OF HEARING THE LD. DR SUPPORTS THE ORDER OF THE ASSESSING OFFICER . 5. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE WHILE RELYING ON THE ORDER OF THE LD. CIT(A) SUBMITS THAT THE IMPUGNED ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDERS OF THE TRIBUNAL AND THE RECENT DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CI T VS. INDER V. NANKANI INCOME TAX APPEAL NO.128 OF 2009 DATED 24.2.2009(BOM.). HE ALSO PLACED ON RECORD COPY OF THE SAID JUDGMENT. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS THE ASSESSEE HAS SOLD THE DIAMOND JEWELLERY WHICH WAS DECLARED UNDER VDIS. WE FURTHER FIND THAT THE TRIBUNAL IN SIMILAR CASES CITED IN THE ORDER OF THE LD. CIT(A) HAS UPHELD THE ORDER OF THE LD. CIT(A) TR EATING THE TRANSACTIONS AS GENUINE AND IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER . ITA NO. 4422/M/07 A.Y: 98 - 99 4 7. THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SHRI INDER V. NANKANI (SUPRA) WHILE OBSERVING THAT THE TRIBUNAL IN THE INSTANT CASE HAS HELD THAT THE ASSESSEE HAD DISCLOSED THE DIAMONDS IN HIS POSSESSION AT THE TIME OF VDIS DECLARATION WHICH WAS ACCEPTED HELD THAT ONCE THAT BE THE CASE AND THE CONSIDERATION RECEIVED FROM THE PURCHASER WHICH HAS NOT BEEN DOUBTED THE FACT THERE IS DOUBT ABOUT THE SECOND SALE CANNOT RESULT IN MAKING ADDITION IN THE HANDS OF THE ASSESSEE. 8. RECENTLY THE HON BLE JURISDICTIONAL HIGH COURT IN CIT VS. UTTAMCHAND JAIN (2010) 320 ITR 554 (BOM.) HAS HELD VIDE PARA - 20 OF THE JUDGMENT AS UNDER : 20. IT IS PERTINEN T TO NOTE THAT THE SALE TRANSACTION OF DIAMOND JEWELLERY DECLARED UNDER VDIS 1997 BETWEEN THE ASSESSEE AND MR. TRIVEDI OF DHANANJAY DIAMONDS HAS BEEN ACCEPTED BY THE SALES TAX AUTHORITIES AND THE ASSESSMENTS MADE THEREUNDER HAVE ATTAINED FINALITY. IN ANY E VENT IN THE FACTS OF THE PRESENT CASE THE VIEW TAKEN BY THE TRIBUNAL TO REJECT THE CONTENTION OF THE REVENUE THAT THE RETRACTED STATEMENT OF MR. TRIVEDI IS CORROBORATED BY THE PAY - IN - SLIPS / CASH DEPOSITS IN THE BANK ACCOUNT OF MR. TRIVEDI AND THE NON - AV AILABILITY OF THE JEWELLERY CLAIMED TO HAVE BEEN SOLD BY THE ASSESSEE TO MR. TRIVEDI IS A REASONABLE AND POSSIBLE VIEW. AS THE DECISION OF THE TRIBUNAL DOES NOT GIVE RISE TO ANY QUESTION OF LAW WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE TRIBUNA L. 9. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE REVENUE WE RESPECTFULLY FOLLOWING THE JUDGMENTS OF THE HON BLE JURISDICTIONAL HIGH COURT SUPRA AND THE CONSISTENT VIEW OF THE TRIBUNAL ITA NO. 4422/M/07 A.Y: 98 - 99 5 HOLD THAT THE ADDITION OF RS. 19 29 160 / - MADE BY THE ASSESSING OFFICER IS NOT SUSTAINABLE IN LAW AND ACCORDINGLY WE ARE INCLINED TO UPHOLD THE FINDING OF THE LD. CIT(A) IN DELETING THE SAME. THE GROUNDS TAKEN BY THE REVENUE ARE THEREFORE REJECTED. 10. IN THE RESULT REVENUE S APPEAL STANDS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.4.2010. SD/ - SD/ - ( PRAMOD KUMAR ) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 21.4. 20 10 . JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.