TMI Blog2009 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... in law, the ITAT was justified in deleting the addition of Rs.10,35,562/- made on account of alleged unaccounted income from sale of jewellery which are declared under VDIS 1997 ? b) Whether on the facts and circumstances of the case and in law, the ITAT was justified in not appreciating the fact that the statement of confession of Vishnudatta Trivedi is backed by the irrefutable evidence in respect of pay-in-slips of the banks, cash deposits and non existence of any stock during the course of survey ? 2. The assessment year involved herein is A.Y. 1998-1999. 3. The respondent (`assessee' for short) is a Dealer in Diamonds. The assessee had declared diamond jewelery weighing 65.75 carats under the Voluntary Disclosure of Income Scheme, 1997 ('VDIS, 1997' for short). The said declaration was accepted by the department and a certificate was issued to the assessee under VDIS, 1997. 4. In the return of income filed for A.Y. 1998-1999, the assessee claimed to have sold the said jewelery declared under VDIS, 1997 to M/s. Dhananjay Diamonds, a proprietary concern of Vishnudatt Trivedi on 20-01-1999 for Rs.10,35,562/-, thereby earning long term capital gains amounting to Rs.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore issuing cheques to various parties. 8. On further appeal filed by the assessee, two members of the ITAT differed in their view and the matter was referred to a third member. In the light of the decision of the third member, the appeal filed by the assessee was allowed and the addition was deleted. Challenging the aforesaid order of the tribunal, the present appeal is filed by the revenue. 9. On behalf of the revenue, it is contended that the tribunal has committed an error in relying upon the retracted statement of Mr. Trivedi instead of relying on his statement recorded on 31-3-2000 under Section 133A of the Act. It is contended that the retraction letter of Mr. Trivedi though dated 4-4-2000 was in fact posted on 11-4-2000 and was received by the A.O. on 17-4-2000. These facts clearly show that the retraction was only an after-thought and ought to have been discarded. It is contended that Mr. Trivedi had failed to explain as to how the admission made by him on 31-3-2000 was under undue pressure exerted by the department and if the said statement was under undue influence, then why he took 11 days to retract his statement recorded on 31-3-2000. It is contended that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rove the source of credit in the books of account including the genuineness of the transactions. Accordingly, it is submitted that the decision of the tribunal be quashed and set aside by answering the questions raised in favour of the revenue. 12. We see no merit in the above contentions. At the outset, we may note that the certificate issued by the revenue under VDIS 1997 to the effect that the assessee had diamond jewellery weighing 65.75 carats continues to be valid and subsisting. In fact, no proceedings have been initiated so far to cancel the certificate issued to the assessee under VDIS, 1997. 13. When the assessee claimed that the above diamond jewellery declared under VDIS 1997 has been sold to Dhananjay Diamonds on 20-1-1999 for Rs.10,35,562/-, the same was accepted in the original assessment, however, in the reassessment order, the claim is disbelieved mainly by relying on the statement of Mr. Trivedi recorded on 31/3/2000, wherein he had stated that the transactions recorded in his books are hawala transactions. It is further held that the above statement is corroborated by the non-availability of the diamond jewellery allegedly sold by the assessee to Dhananj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97 cannot be faulted. 17. The fact that the diamond jewellery claimed to have been sold by the assessee was not found with the purchaser (Dhananjay Diamonds) or his associates cannot be held against the assessee, because, admittedly, the said diamond jewellery declared under VDIS 1997 is also not found with the assessee after the sale is effected. If existence of the diamond jewellery with the assessee prior to the sale is evidenced by the VDIS, 1997 certificate and on sale of the said jewellery the assessee has received the consideration which is duly accounted for, then the mere fact that the jewellery sold by the assessee is not found with the purchaser cannot be a ground to hold that the transaction was bogus and the consideration received by the assessee was the undisclosed income of the assessee. 18. Assuming the revenue is right in its contention that the sale did not involve actual delivery of diamond jewellery, then, unless it is established that the assessee had passed on his undisclosed income to Mr. Trivedi, it cannot be said that the amount received by the assessee from Mr. Trivedi represented the undisclosed income of the assessee. In the present case neither ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iamond jewellery. Therefore, reliance placed on the aforesaid two decisions is misplaced. 20. It is pertinent 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 event, 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-availability 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 Tribunal. 21. For all the aforesaid reasons, we see no merit in the appeal and the same is hereby dismissed by answering both the questions in the affirmative, that is, in favour of the Assessee and against the Revenue. 22. The Appeal is disposed of accordingly with no order as to costs. - - TaxTMI - TMITax - I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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