ITO 19(3)(2), MUMBAI v. LATE REKHA LALWANI THROUGH L/H KISHIN LALWANI, MUMBAI

ITA 712/MUM/2009 | 1998-1999
Pronouncement Date: 19-03-2010 | Result: Dismissed

Appeal Details

RSA Number 71219914 RSA 2009
Assessee PAN AAUPL9250F
Bench Mumbai
Appeal Number ITA 712/MUM/2009
Duration Of Justice 1 year(s) 1 month(s) 15 day(s)
Appellant ITO 19(3)(2), MUMBAI
Respondent LATE REKHA LALWANI THROUGH L/H KISHIN LALWANI, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 19-03-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 19-03-2010
Date Of Final Hearing 11-03-2010
Next Hearing Date 11-03-2010
Assessment Year 1998-1999
Appeal Filed On 03-02-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH MUMBAI BEFORE SHRI R.K. GUPTA JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NO. 712/MUM/2009 (ASSESSMENT YEAR: 1998-99) INCOME TAX OFFICER 19(3)(2) LATE REKHA LALWANI 3RD FLOOR PIRAMAL CHAMBERS (THROUGH L/H KISHIN LAL WANI) PAREL MUMBAI 400012 VS. FLAT NO. 16 JEEVAN SUKH BANDRA (W) MUMBAI 400050 PAN - AAUPL 9250 F APPELLANT RESPONDENT APPELLANT BY: SHRI CHANDRA RAMKRISHNAN RESPONDENT BY: SHRI K.R. LAKSHMI NARAYANAN O R D E R PER B. RAMAKOTAIAH A.M. THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF THE CTA XIX MUMBAI DATED 12.12.2008. 2. REVENUE HAS RAISED A SOLITARY GROUND AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS .14 04 920/- MADE UNDER SEC. 68 IGNORING THE FACT THAT: (A) THIS ADDITION WAS MADE ON THE BASIS OF WELL ESTAB LISHED PRINCIPLE OF PRE-PONDERENCE OF PROBABILITIES AND IN THE LIGHT OF FINDINGS MADE IN THE CASE OF MR. KAMAL KUMAR JOHARI AND MR. HARI OM SHARMA. (B) THE DEPARTMENT HAS NOT ACCEPTED THE DECISION OF T HE HON'BLE ITAT IN ALL THE CASES PERTAINING TO JOHARI &SHARMA GROUP AND ALSO IN THE CASE OF UTTAMCHAND JAIN RELIED UPON BY THE LD. CIT(A) AND PREFERRED APPEALS U/S. 260A BEFORE HON'B LE BOMBAY HIGH COURT. 3. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE HAS DECLARED CAPITAL GAINS OF RS.4 06 660/- ON SALE OF DIAMONDS DECLARED UNDER VDIS 1997 SOLD TO GALAXY EXPORTS FOR RS.14 04 920/-. THE COST OF A CQUISITION OF DIAMONDS WAS TAKEN IN THE YEAR 1981-82 AND AFTER THE INDEXAT ION INCOME FROM LONG TERM CAPITAL GAIN WAS ARRIVED AT. IT WAS ASSESSING OFFICER CONTENTION THAT IN ITA NO. 712/MUM/2009 LATE REKHA LALWANI 2 THE CASE OF SEARCH OF M/S. GALAXY EXPORTS ON 12.12. 1992 IT WAS NOTICED THAT THE SAID FIRM GAVE ACCOMMODATION BILLS FOR SALE OF JEWELLERY AND MOST OF THE PURCHASES OF THE FRONT CONCERNS ARE FROM THE PEOPLE WHO HAVE USED VDIS 1997 SCHEME. CONSEQUENT TO THOSE FINDINGS OF THE IN VESTIGATION TEAM THE A.O. HELD THAT M/S. GALAXY EXPORTS WAS ONE OF THE B OGUS FRONT CONCERNS WHICH WAS INVOLVED IN BOGUS PURCHASE OF NON-EXISTEN T DIAMONDS. THE A.O HAS ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE ON THE BASIS OF THE SAID FINDINGS ASKING THE ASSESSEE WHY THE AMOUNT OF RS.1 4 04 920/- OF THE SALE PROCEEDS IN THE BANK A/C OF THE ASSESSEE SHOULD NOT BE TREATED AS UNACCOUNTED CASH CREDIT. THE ASSESSEE HAS EXPLAINED THAT THE BILLS OF THE GALAXY EXPORTS WAS CONSIDERED BY THE ITAT AND THE T RANSACTIONS WERE ACCEPTED AS GENUINE AND ON THAT BASIS THERE IS NO C ASE FOR TREATING THE SALE PROCEEDS AS UNACCOUNTED CASH CREDIT. THE A.O. DID N OT ACCEPT ASSESSEES CONTENTION AND TREATED THE ENTIRE SALE PROCEEDS AS INCOME UNDER THE PROVISIONS OF SECTION 68. THE CIT(A) RELYING ON TH E DECISION OF THE ITAT IN VARIOUS CASES INCLUDING THE CASE OF MR. UTTAMCHAND JAIN HELD THAT THE ASSESSEE HAS VALIDLY DISCLOSED VDIS AND CERTIFICATE BY THE CIT WAS GRANTED HENCE EXISTENCE OF DIAMONDS CANNOT BE DOUBTED. FURT HER THE SALE PROCEEDS WERE ALSO RECEIVED THROUGH ACCOUNT PAYEE CHEQUES. A CCORDINGLY THE HE HAS DELETED THE ADDITION. HENCE THE REVENUE IS AGGRIEVE D AND HAS RAISED THE ABOVE GROUND. 4. AT THE OUTSET IT WAS SUBMITTED THAT THE DEPARTMENT WAS CONTESTING ONLY ON THE BASIS THAT THE STATEMENTS OF SHRI KAMAL KUMAR JOHAR AND SHRI HARI OM SHARMA OF M/S. GALAXY EXPORTS AND THE DEPAR TMENT HAS NOT ACCEPTED THE DECISION OF THE ITAT IN THOSE GROUP CA SES AND ALSO THE DECISION IN THE CASE OF UTTAMCHAND JAIN RELIED UPON BY THE C IT(A). 5. NOW THAT THE ISSUE HAS BEEN CRYSTALLISED BY THE DEC ISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. UT TAMCHAND JAIN 182 TAXMAN 243 WHEREIN THE HON'BLE JURISDICTIONAL HIGH COURT H AS UPHELD THE SAID ORDER OF THE ITAT. SINCE THERE IS NO DOUBT ABOUT THE EXIS TENCE OF DIAMOND JEWELLERY AND ALSO THERE ARE EVIDENCES THAT THE ASSESSEE HAS RECEIVED THE SALE PROCEEDS BY WAY OF CHEQUES IN THE BANK ACCOUNT THE PRINCIPLE ESTABLISHED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE ABOVE REFE RRED CASE WILL EQUALLY APPLY. ITA NO. 712/MUM/2009 LATE REKHA LALWANI 3 THE LEARNED CIT(A) HAS FOLLOWED THE ITAT ORDER IN T HE SAID CASE WHILE DELETING THE ADDITION SO MADE. THERE IS NO NEED TO INTERFERE WITH THE ORDER OF THE CIT(A) BOTH ON FACTS AS WELL AS ON LAW. ACCORDINGLY THE GR OUND OF THE REVENUE IS REJECTED. 6. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH MARCH 2010. SD/ SD/- (R.K. GUPTA) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 19 TH MARCH 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XIX MUMBAI 4. THE CIT XIX MUMBAI CITY 5. THE DR D BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.