TMI Blog2006 (9) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... clared at Rs. 4,643 in the return of income is illegal arbitrary, uncalled for and against the facts and circumstances of the case. 4. The action of the learned CIT(A) in confirming the action of the learned AO, without confronting the appellant with the evidences 1 to 5 stated on p. 3 of learned. AO's order and taking an adverse view is illegal arbitrary, uncalled for and against the facts and circumstances of the case. 5. The action of the learned AO in charging interest under s. 234A, Band C is illegal arbitrary, uncalled for and against the facts and circumstances of the case. 6. The appellant reserves the right to add, alter, amend, modify or withdraw any ground of appeal". 3. Rival contentions have been heard and record carefully perused. The facts in brief are that during the course of assessment under s. 143(3)/147 of the Act, the AO observed that assessee had sold jewellery to Surendra Khanna Sons and a draft of Rs. 5,95,850 was received from the aforesaid jeweller through bank account No. 1392 of M/s Surendra Khanna Sons. The AO further stated that majority of the persons who had shown receipt of amount through this bank account, by way of gift had admitted be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he genuineness of explanation and the documents furnished before it, the onus shifted to the Department to substantiate the doubt by bringing some cogent material on record. She further submitted that it is not in the hands of the assessee to catch hold of the jeweller to whom ornaments were sold 3-4 years back. When the ornaments were sold and the sale consideration was received by the assessee in the form of account payee draft and the same was deposited in his bank account, there was no reason to doubt the genuineness of sale of the jewellery and payment received through account payee draft. The transaction of sale was complete in all respect on the part of assessee. After sale of the ornaments and getting due payment for the same, the assessee is not having continuous relationship or contact with the jeweller, so that it is not practicable nor is it in his hand to produce the jeweller after 3-4 years, before the IT Authorities when he was not found. She further submitted that merely because some of the persons who have received the gift amount through the same bank account from where the assessee received the account payee draft, accepted before the Department that the same was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that alleged bank account through which draft was received by assessee was benami, the AO has sufficient reason to believe that income of the assessee received through the very same bank account has escaped assessment, therefore, reopening by the AO was well within his jurisdiction and as per the provisions of Act. He further contended that assessee was unable to prove the genuineness of transaction insofar as he could not produce the person who operated the bank account or the jeweller who has purchased the ornaments from the assessee. Under these circumstances, as per learned Departmental Representative, Shri Badhok, the AO was perfectly justified in making addition of the amount of the draft received by the assessee on account of sale of ornaments. 8. We have considered the rival contentions, carefully gone through the orders of the lower authorities, various materials placed on record as well as the statement of the assessee recorded by the AO under s. 131 of the IT Act, 1961. From the record, we found that during the year under consideration, the assessee has credited income in his books of account in respect of sale of ornaments. 9. The bank account through which assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation No. 07666, dt.18th March, 1998. The registered valuer issued valuation report of jewellery possessed by the assessee. The VDIS disclosure was accepted by the Department. Thus, on the date of sale the assessee was having jewellery in his possession. The jewellery was sold to M/s Surendra Khanna Sons, 1422 S.B. Sarula Market, Chandni Chowk, Delhi-1l0 006. The said firm M/s Khanna Sons was registered withDelhiSales-tax Authority with Registration No. S.T. No. LC/12/121131/0387. Bills and vouchers with respect to sale of jewellery and particulars of the sale consideration received through account payee draft and deposited in his bank account was duly confirmed. The amount was received by the assessee on account of sale consideration and the same was accounted for as income, therefore, the onus of the assessee with regard to such transaction of sale is different from the onus cast on him when amount is received on account of gift or as a loan. In case of transaction of loan or gift, the assessee is undisputedly required to establish not only identity of loan creditor/donor, the genuineness of loan/gift transaction, but also the credit worthiness of the loan creditor or the don ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry well use its powers under s. 131 to call a person for examination. The assessee is not having these powers. The Allahabad High Court in the case of Nathu Ram Premchand vs. CIT (1963) 49 ITR 561 (All), observed that it is the duty of the AO to enforce the attendance of a witness, if the witness is material, in exercise of his powers under O. 16, r. 10 of Cr.PC, where the officer does not do so, no inference can be drawn against the assessee. Hon'ble Supreme Court in case Of Prakash Chand Nahta vs. Union of India Ors. (2000) 163 CTR (SC) 310 : (2001) 247 ITR 274 (SC) held that cross-examination of the witness is must, before the Department relies on the statement of the witness for making addition. Moreover once the transaction of sale is complete in all respects, the assessee cannot insist the persons to whom sale had been made to appear before the IT authorities after lapse of 3-4 years specially when he is not in contact of the assessee. On the other hand, if the Department doubts the genuineness of transaction, it can very well after making inquiry, use these persons as its witnesses and after allowing opportunity to the assessee to cross-examine these persons, reach to some ..... X X X X Extracts X X X X X X X X Extracts X X X X
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