9911796707
TMI Blog2009 (6) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... commensurate. Keeping in view these huge deposits in the bank account No. 7674 in Punjab National Bank, Katra Jaimal Singh, Amritsar, the AO had reasons to believe that income has to be much higher than declared by the assessee, even after adopting a modest rate of 1 per cent. For the asst. yr. 1999-2000, the assessee had filed his return on 31st March, 2003 which was beyond the prescribed time under s. 139, it was declared to be non est. The AO recorded reasons for issuing notice under s. 148 and the said notice was served on 25th Sept., 2003 wherein the AO after going through the said bank account has reasons to believe that volume of transactions during the year did not correlate with the return of income. Therefore, the AO had reasons to believe that income had escaped assessment. During the asst. yr. 2000-01, the AO found that the assessee had filed his return on 31st March, 2003 declaring income of Rs. 23,311 which did not tally with the huge cash deposits in bank account No. 7674 with the Punjab National Bank. Katra Jaimal Singh, Amritsar. Therefore, the AO had reasons to believe that income had escaped assessment. For the asst. yr. 2001-02 on the same reasons the AO issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he office of the Dy. Director of IT (Inv.), Amritsar. The learned Departmental Representative further stated that the documents at serial No. 69 of the Departmental paper book is a chart of market rate for gold and silver which are being filed for reference to buttress the case of the Department. Lastly, he requested that these evidences filed by the Department are very much necessary for the correct decision of the present ease and requested that the same may be admitted. 7. After hearing both the parties on the applications filed by the assessee for admission of the additional ground of appeal under r. 11 of the ITAT Rules, 1963, an application filed by the assessee for admission of the additional evidence under r. 29 of the ITAT Rules, 1963 and application filed by the Revenue for admission of additional evidence under r. 29 of the ITAT Rules, 1963, the Bench vide its order dt. 27th May, 2009 allowed the applications filed by the assessee for admission of the additional ground of appeal, an application filed by the Revenue for admission of the additional evidence but the Bench had dismissed the application of the assessee for admission of the additional evidence in its detailed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, I have the reasons to believe that the income chargeable to tax to the tune of Rs. 5 lacs have escaped assessment for the asst. yr. 1996-97, hence proceedings under s. 147 are to be initiated. Your kind approval for the issue of notice under s. 148 for the asst. yr. 1996-97 is solicited. Sd/- (K.K. Mahajan) ITO, Ward-IV(3), Amritsar." The learned counsel for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty which has not been adjudicated by him. The learned first appellate authority has also not appreciated properly the income-tax and sales-tax returns filed by the assessee to prove the genuineness of the transaction/credits/deposits. The learned counsel for the assessee also drew our attention towards rent deed placed at pp. 12 to 14 of the paper book No. 1 filed by the assessee in Punjabi and 14A and 14B English translation and stated that the shop of the assessee was situated in Anand Market, Patel Chowk, Amritsar wherein shop No. 3 owned by Shri Jatinder Anand S/o Late Shri D.L. Anand, resident of 116, Shakti Nagar, Amritsar, for Rs. 500 per month for 11 months w.e.f. 1st Nov., 1997. He stated that this rent deed established that the assessee has taken this shop for doing the business of jewellery. He also drew our attention towards page No. 69 of the paper book No. 1 and drew our attention towards statement dt. 22nd Jan., 2004 under s. 131 recorded on 22nd Jan., 2004 of the owner of the assessee named Shri Jatinder Anand which he had made before the AO in which the owner of the shop stated that he had rented out the shop to the assessee. He also drew our attention towards page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sales bills issued by the SBI and the other evidence filed by the assessee without verifying the same and wrongly held that the assessee was not engaged in the genuine business of gold jewellery and disallowed the claim of the assessee. The learned counsel for the assessee further contended that the assessee has also purchased jewellery from various registered dealers registered with the sales-tax authorities during the financial year 1998-99 as per copies of bills placed at. pp. 27 to 38 of the paper book. Keeping in view the arguments raised by him, he stated that the assessee has conclusively established beyond any reasonable doubt that the assessee was engaged in the business of purchase and sale of jewellery and allegation of the AO that the assessee was not engaged in the jewellery business but was merely providing accommodation entries is totally false and incorrect. 10. He further stated that the Dy. Director of IT (Inv.) and the AO recorded the statement of the assessee from time to time, the assessee repeatedly confirmed that he was engaged in the business of jewellery. He invited our attention towards the statement recorded on 13th Dec., 2002 and stated that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and is merely providing accommodation entries. The learned counsel for the assessee stated that these statements were recorded by the Dy. Director of IT (Inv.) under threat and coercion and the same were not voluntary statements given by the assessee. The assessee was made to sign the said statements wherein it was stated that the assessee's business of sale and purchase of jewellery and job work was bogus and it was never in existence. He stated that the assessee was forced to give confessional statements before the Dy. Director of IT (Inv.). When the second statement of the assessee dt. 6th Jan., 2003 recorded by the Dy. Director of IT (Inv.), Amritsar, the assessee was paraded in the Patel Chowk Bazar, Amritsar, in the presence of various shopkeepers due to which the assessee felt very humiliated and insulted. Due to this intense pressure of the Investigation Wing, the assessee started feeling acute chest pain on 6th Jan., 2003 and had to be hospitalised on 7th Jan., 2003 and was discharged from hospital on 15th Jan., 2003. During this period of hospitalisation of the assessee i.e., from 7th Jan., 2003 to 15th Jan., 2003, the investigating authority recorded the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mary basis for alleging that the assessee was engaged in providing accommodation entries and not the business of purchase and sale of jewellery was recorded under immense threat, pressure and coercion and affidavit in support of the retraction dt. 14th Feb., 2003 was also filed before the AO and the assessee was also cross-examined on this affidavit in the statement dt. 10th March, 2005. He requested that it is settled law that statement once retracted looses its evidentiary value and cannot be relied upon for drawing any adverse inference. In support of his contention, he relied upon the following judgments: (1) Vinod Solanki 2009 (233) ELT 157 (SC); (2) K.T.M.S. Mohd. & Anr. vs. Union of India (1992) 108 CTR (SC) 84 (1992) 197 ITR 196 (SC); (3) Dy. CIT vs. Ratan Corporation (2005) 197 CTR (Guj) 536; (4) G. Kanagaraj vs. Dy. CIT (2001) 73 TTJ (Chennai) 731; (5) Govind Ram Chhugani vs. Asstt. CIT (2002) 77 TTJ (Jd) 339; (6) Surinder Pal Verma vs. Asstt. CIT (2004) 83 TTJ (Chd)(TM) 24 : (2004) 89 ITD 129 (Chd)(TM); (7) ITO vs. Pukhraj N. Jain (2006) 99 TTJ (Mumbai) 364 : (2005) 95 ITD 281 (Mumbai); (8) Ashok Manilal Thakkar vs. Asstt. CIT (2006) 99 TTJ (AM) 1262 : (2005) 97 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gies vs. Dy. CIT (2006) 104 TTJ (Asr) 353; (8) Late Shri Mukund V. Kapadia vs. ITO (2002) 77 TTJ (Mumbai) 595 : (2002) 82 ITO 489 (Mumbai). 14. After citing the aforesaid judgments, the learned counsel for the assessee stated that the statements recorded under s. 131 of the Act even though no proceedings were pending was not a valid statement and, therefore, no reliance could be placed on such invalid statement. Therefore, the statements recorded on 16th and 17th Jan., 2003 were invalid in the eye of law and could not be relied upon by the AO. As regards to the statements dt. 17th Jan., 2003 of the assessee's brother and mother which are also invalid because these were also recorded by the Dy. Director of IT (Inv.), who had no authority to record the same. The learned counsel for the assessee submitted that keeping in view aforesaid various decisions, statements recorded by the Dy. Director of IT (Inv.) are invalid statements in the eye of law and could not be relied upon by the AO. He also draw our attention towards the statements of Shri Harjinder Singh, dt. 6th Jan., 2003, recorded before the Dy. Director of IT (Inv.), Shri Jatinder Anand, dt. 6th Jan., 2003. recorded befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(SB) 145 : (2008) 11 DTR (Del)(SB)(Trib) 1 : (2008) 113 ITD 377 (Del)(SB); (14) Sarita Devi Kajaria vs. ITO (2004) 86 TTJ (Kol)(TM) 1090 : (2004) 89 ITD 109 (Kol)(TM); (15) Mahes Gulabrai Joshi vs. CIT (2005) 96 TTJ (Mumbai) 876 : (2005) 95 ITD 300 (Mumbai); (16) ITO vs. Pukhraj N. Jain. 16. In the end, the learned counsel for the assessee stated that the issue in dispute is squarely covered in favour of the assessee by the recent decision of the Special Bench of the Tribunal in the case of Manoj Aggarwal vs. Dy. CIT. He stated that in these cases also the AO proceeding on conjectures and surmises alleged that the assessee was engaged in providing accommodation entries. The assessee in that case also had purchased huge quantity of old jewellery from various declarants of VDIS, 1997, which was subsequently sold in cash and the cash was deposited in the bank account. out of which cheques were issued to the sellers of jewellery. The modus operandi of the said seller was broadly similar to that of the appellant. The Special Bench, after elaborately considering various allegations of the AO similar to the one levelled against the assessee held that the Department has not been able ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther contended that the bank account of the appellant was opened on the verification of one Mr. Rakesh Kumar, who was holding bank account in the name of M/s Aar Aar Traders. The bank account of the said concern was introduced by Mr. V.K. Umat himself personally. On the reliance being placed on the rent agreement entered into by the appellant for taking the shop on rent, the Departmental Representative contended that the said agreement was witnessed by one Shri Vijay Gupta, who had given his residential address as the office address of Mr. V.K. Umat. It was further contended that even the signature of the landlord, Shri Jatinder Anand, in the rent deed does not match with his Signatures in his statement placed at pp. 69 to 72 of the assessee's paper book. It was further submitted that reliance placed by the assessee on the acceptance of the returns of income filed for the asst. yrs. 1996-97 and 1997-98 were improper. He submitted that the said returns were nothing but a sudden creation of records and were filed on 15th Jan., 1998 with token tax payment in order to give impression of genuine trade being carried on by the assessee. The Departmental Representative further submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details as given in the IT returns. This, according to the Departmental Representative, shows that records were prepared/created in order to give the genuine shape to the jewellery business. The Departmental Representative further referred to the sales-tax return filed by the appellant for various years. It was submitted that in the sales-tax return for the financial year 1997-98, the appellant had shown sales of Rs. 68,56,320 only as against sales of Rs. 6,69,82,150 shown in the IT return. It was further submitted that in the return for the subsequent financial year 1998-99 the appellant declared nil turnover to the Sales-tax Department, whereas the appellant claimed to have carried on bullion trade during the said financial year. 24. As regards reliance being placed on purchase from the registered dealers relied upon by the Authorised Representative, the learned Departmental Representative invited our attention to various bills of purchases made from the three dealers, viz., M/s Vinod Jewellers, Pathankot, M/s Hukum Chand Sushil Chand, Amritsar and M/s Kapoor Jewellers, Amritsar. It was contended that some of the bills placed in the assessee's paper book contained descriptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s asked to show his shop, the appellant stated that let us go and thereafter, run away. Thereafter, he got himself admitted in the hospital and in the meanwhile FIR was also lodged stating that the books of accounts were lost on 16th Dec., 2002. It was further contended that the allegation of the appellant and his mother and brother that their statements were recorded under threat and coercion on 16th Jan., 2003 and 17th Jan., 2003 is not correct as is evident from the fact that subsequent to the recording of the said statement health of the mother of the appellant recovers, which was not possible had there been threat and coercion by the Investigation Department. As regards the statement of Shri Sanjay Grover, brother of the appellant recorded by the AO on 16th Jan., 2004, it was submitted in that statement he gave evasive replies. 26. As regards the contention that the statement of appellant and various persons recorded by the Dy. Director of IT (Inv.) under threat and coercion, the Departmental Representative further submitted that had there been such threat/coercion, the appellant should have reported the matter to the higher authorities, which has not been done. As regards re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded by Dy. Director of IT (Inv) on 17th Jan., 2003 wherein he denied knowing the appellant. It was submitted that the appellant had claimed to have got his bill books printed from M/s Jaspal Printing Press. It was further submitted that the appellant refused Lo cross-examine Shri Vajinder Singh, when such opportunity was allowed by the AO. 29. The Departmental Representative further referred to the findings given by the AO in the assessment order regarding credit of unexplained money belonging to Shri Subhash Chand Goel, Mrs. Veena Goel, Shri Vinod Kumar Chadha and Shri Rajeev Arora of M/s Saba Naga Rice Mills, some of the beneficiaries of the accommodation entries provided by the appellant. It was submitted that the AO has traced actual deposit of money in the bank account of the appellant in receiving accommodation entries. As regards the statements of Shri Parminder Singh, Shri Hakumat Rai and Shri Vijay Gupta being relied upon by the appellant, it was submitted that the said three persons are not independent evidences in as much as Shri Hakimat Rai and Vijay Gupta are employees of Shri V.K. Umat. It was further contended that Shri Hakumat Rai and Shri Vijay Gupta, who clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts by the appellant in order to give it a genuine shape of jewellery business is evident from the fact that the appellant had subsequently adjusted the accounting of one sale bill of jewellery in order to include the transactions with SBI in the books of accounts. The Departmental Representative further submitted that the appellant, in order to hide, the same, adjusted the balance of the SBI bank account in the capital account of the assessee, which is contrary to the general accounting practice being followed. All these facts, according to the Departmental Representative, leads to the conclusion that the transactions of bullion trade from SBI were subsequently included in the books of accounts merely to give a genuine shape of jewellery business to the accommodation entries business carried on by the appellant. Elaborating further, it was further submitted that the bullion trade was not at all recorded in the books of accounts impounded by the Department on 6th Jan., 2003. The said bullion trade was, however, incorporated in the books of accounts subsequently before filing the return of income for the asst. yr. 1999-2000. It was further submitted that the details of bullion trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or's confession has been upheld and another part has not been upheld. The confession can be either true or false. It has been decided many number of times that the document has to be seen in its totality. The same logic should apply to the confessional statement also. More so, when Shri Manoj Aggarwal has also confirmed that Shri Sunil Kapoor was a mediator/sub-mediator in his accommodation entry business. 32.2 As we have stated above, the learned Departmental Representative distinguished both the eases in his written submissions of 50 pages and lastly he requested that appeals filed by the assessee may be dismissed. 33. In reply to the aforesaid contentions of the Departmental Representative, the learned counsel of the assessee primarily reiterated his submissions made earlier. As regards the address of M/s Umat & Associates being mentioned in some of the application forms like sales-tax registration form and PAN application form, it was primarily eon tended that the same was given as Shri Kapil Agarwal, associate of the said concern was counsel of the appellant and the details of counsel were mentioned in the application form for the sake of convenience, which is quite usua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry sold by them was in the nature of accommodation entry. It was contended that the Departmental Representative is reading words into the statements and also the application filed under s. 144A to the Addl. CIT since none of the parties ever accepted having routed accommodation entries through the appellant, as is alleged by the Departmental Representative. 35. As regards the receipt of money from M/s Baba Naga Rice Mills for allegedly giving accommodation entry, it was submitted that the appellant had purchased jewellery from four persons mentioned on p. 91 of the assessment order belonging to the same group for total consideration of Rs. 12,24,579 on 11th Aug., 1998. These transactions were duly recorded in the books of account. However, on the very next date, i.e., on 12th Aug., 1998, the aforesaid parties again approached the appellant to take back the jewellery due to some family dispute. Accordingly, the appellant returned the jewellery and received back the consideration vide the pay order referred in the assessment order, which is also recorded in the books of accounts. It was submitted that the AO totally misconstrued the transactions and levelled false and baseless alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Departmental Representative that the appellant had subsequently incorporated transactions of bullion trade in the books of accounts, the Authorised Representative submitted that it is an undisputed fact that the appellant has duly included the turnover from purchase and sale of bullion from SBI in the return of income filed for the asst. yr. 1999-2000. The appellant's trade has been impliedly accepted by the AO in the assessment order for the asst. yr. 1999-2000 since the AO has not disputed the same. Therefore, it is not now open to the Departmental Representative to challenge the genuineness of the bullion trade carried on by the appellant. Reference in this regard was also made to the decisions of the Hon'ble Supreme Court in the cases of Hukumchand Mills Ltd. vs. CIT (1967) 63 ITR 232 (SC) and MCorp Global (P) Ltd. vs. CIT (2009) 222 CTR (SC) 110 : (2009) 19 DTR (SC) 153 : (2009) 309 ITR 434 (SC). As regards the allegation of the Department that the bullion trade was carried out by someone else and the appellant had merely lent his name for carrying on such trade, it was submitted that such allegation is totally baseless and incorrect. Our attention was invited to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicating the appeal of the appellant. It was submitted that findings given in the case of Shri Raj Kumar are not at all relevant in the case of the appellant. As regards the contention of the Departmental Representative that Shri Raj Kumar also contended having carried on business from the same shop as claimed by the appellant, it was submitted that the appellant had registered rent deed of the premises and secondly the appellant is unaware as regards what was said by Mr. Raj Kumar and further that in the absence of cross-examination of Shri Raj Kumar, his statement could not be relied upon in the case of the appellant. 41. As regards threat and coercion being applied by Dy. Director of IT (Inv.) for recording various statements including that of appellant, the learned Authorised Representative relied upon the circumstances highlighted earlier to contend that such statements were not at all voluntary statements and, therefore, cannot be relied upon. Alternatively it was contended that the statements before Dy. Director of IT (Inv.) were invalid statements in the eyes of law and, therefore, must be excluded from consideration. Lastly, it was also contended that most of the statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers, was used to provide "accommodation entries" to various parties. Thus, the unaccounted cash available with the parties (or, beneficiaries) would be deposited in the said bank account and on payment of some commission, cheques/demand drafts/pay orders etc. would be issued in favour of the beneficiaries from that bank account. Thus, this method was used for converting the unaccounted money of the beneficiaries into white money on payment of commission by such beneficiaries. The volume of transactions during one financial year, as perused from this bank account does not collate with the income as returned by the assessee in his IT return filed for that corresponding assessment year. The assessee has filed return of income for asst. yr. 1998-99 on 31st Oct., 1998 declaring the income of Rs. 73,180. During the financial year corresponding to asst. yr. 1998-99, it is found that the total deposits in the bank account No. 7674 are to the tune of Rs. 6,75,15,110 and even if it is assumed that this figure represents the total deposits/gross turnover of the assessee, then this does not collate with the income of Rs. 73,180, as has been declared by the assessee for asst. yr. 1998-99. By a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the form of huge transactions in the bank account and other information received were sufficient for the AO to come to a prima facie belief of escapement of income. 46. We have carefully considered the rival submissions. We find substantial merit in the contention of the learned Departmental Representative that at the stage of reopening the proceedings under s. 147 of the Act what is required is only the prima facie belief that any income of the assessee has escaped assessment. In the present case, from the reasons as reproduced hereinabove, we are of the considered view that the AO did entertain a prima facie belief of escapement of income and, therefore, the proceedings initiated by the AO were valid. In the aforesaid reasons, the AO has observed that certain information was received from the Investigation Wing of the Department that bank account No. 7674 in PNB, Katra Jaimal Singh, Amritsar, standing in the name of the appellant was used to provide accommodation entries. The AO, on the basis of the entries in the bank account observed that the return filed by the appellant was too low as compared to substantial transactions appearing in the bank account of the appellant. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under s. 147 of the Act. It may also be noted that for the asst. yr. 1998-99, the return filed by the assessee was not scrutinized under s. 143(3) of the IT Act and original return was accepted as such. In these circumstances, the reasons recorded by the AO were sufficient enough for him to come to a prima facie belief of escapement of income. 49. As regards the reopening of assessment proceedings for the asst. yrs. 1999-2000 to 2002-03, no contention was raised before us by the learned Authorised Representative, even though specific ground has been raised challenging the validity of the initiation of proceedings under s. 147 of the IT Act. From the records, it is noticed that returns for the three years were filed belatedly on 31st March, 2003, i.e., even after the expiry of the time-limit for filing the belated return. Accordingly, the return for the asst. yrs. 1999-2000 to 2002-03 were invalid returns in the eyes of law. The AO initiated assessment proceedings under s. 147 of the IT Act on almost the identical reasons as recorded for the asst. yr. 1998-99. Since no valid return was filed by the assessee for the said three assessment years, the AO was well within his powers to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is whether on the facts and the circumstances of the case it can be held that the appellant was during the relevant year engaged in jewellery business or not. On perusal of the records, we notice that the assessee has claimed to be engaged in the jewellery business since the financial year 1993-94, even though returns for the initial assessment years were not filed as the income for the said year were below the taxable income. For the asst. yrs. 1996-97 and 1997-98, the appellant filed return of income on 15th Jan., 1998, declaring income from his proprietary concern, M/s Vishnu Jewellers, much prior to the start of the investigations proceedings in the case of the appellant sometime in December, 2002. Thereafter, return for the asst. yr. 1998-99 was filed by the appellant on 31st Oct., 1998 duly accompanied by the audited accounts and the audit report under s. 44AB of the IT Act. The returns for the subsequent years were filed belatedly on 31st March, 2003. 53. In the return of income for the asst. yr. 1996-97 placed at pp. 4 to 7 of the paper book, the appellant had declared turnover of Rs. 82,541 and also job work receipts of Rs. 79,516. Similarly for the asst. yr. 1997-98, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi Grover, Prop. M/s Vishnu Jewellers. Q. 4 But in statement recorded on 6th Jan., 2003 in response to question No. 8 you had stated that no rent deed had been executed with M/s Vishnu Jewellers. Please explain. Ans. I was made to sign on the statement which had been recorded on 6th Jan., 2003 that is why I had signed the statement under pressure." 55. Apart from Shri Anand, the fact that the appellant carried on jewellery business from the said shop has even been confirmed by various other persons, which we shall be referring to in due course. We also note that not only the assessee had filed his return of income for various asst. yrs. 1996-97 to 1998-99 by mentioning the address of his shop as 26, Anand Market, Patel Chowk, Amritsar, but the Department has also been issuing various notices, intimations, etc., at the said premises of the assessee. It is also noted that there is no allegation of any of the documents/notices, summons, etc., being either claimed as having been received unserved and/or claimed to have not been served on the assessee by the Department. The assessee has placed on record copies of the some of the notices and intimations at pp. 340 to 350 of the paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to the tune of Rs. 18,570 and Rs. 11,727 respectively. Prior to joining this business, I was doing job work. The firm has no additional place of business. On the R.H.S.C. shop No. 27 and on the LH.S. is shop No. 25. R.O.A.C. Sd/- For Vishnu Jewellers Prop." 57. In the aforesaid statement, the appellant clearly stated to be engaged in the business of manufacture and resale of jewellery w.e.f. 1st Nov., 1997, i.e., the date on which he took the shop on rent. Prior to that, he stated that he was doing job work. On the basis of the report of the sales-tax Inspector furnished subsequent to recording of the aforesaid statement and inspection being carried out at the business pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by the appellant before the sales-tax authorities could not be the ground to hold that the appellant was not at all engaged in the jewellery business. On the contrary, the fact that the appellant was registered as a jewellery dealer with the Sales-tax Department clearly supports the case of the appellant of being engaged in jewellery business. 58. Apart from the aforesaid, it is further noticed that the appellant had also made substantial purchase of jewellery from some of the registered sales-tax dealers, bills in respect of the same are placed at pp. 27 to 38 of the assessee's paper book. On perusal of the same, it is noticed that the appellant had made purchases of jewellery from three registered dealers, viz. M/s Vinod Jewellers, M/s Hukum Chand Sushil Chand and M/s Kapoor Jewellers. Before us, the learned counsel of the Revenue has placed copies of the assessment order dt. 28th March, 2005 passed in the case of M/s Vinod Jewellers for asst. yr. 1999-2000, the assessment order and the CIT(A) order passed in the case of M/s Hukum Chand Sushil Chand for the asst. yr. 1998-99 along with the application under s. 144A filed by the said firm and also the assessment order dt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant also. In response to question No. 6, he stated that he used to sell some jewellery items to M/s Vishnu Jewellers from time to time. Again in his statement dt. 30th Sept., 2003 recorded by the AO, Shri Kapoor again confirmed the fact that he had business transactions with M/s Vishnu Jewellers. In his reply to question No. 8, he stated as under: "Question No. 8 I am showing you statements recorded under s. 131 by Dy. Director of IT (Inv.), Amritsar, on 26th July, 2002, 12th Aug., 2002, 13th Aug., 2002, 10th Jan., 2003, 6th Jan., 2003, 13th Jan., 2003, 29th Jan., 2003 and 30th Jan., 2003. Please specify all the relevant portions of statements which were written without your consent. Ans. I will tell you the specific instances which are untrue and written without my consent. The real state of office as situated as follows: (i) The shops of M/s Vishnu Jewellers at Anand Market, Opp. Allahabad Bank actually exist since 1997. (ii) M/s Vishnu Jewellers has actually done business of trading of gold and diamond jewellery. (iii) M/s Vishnu Jewellers has not given any accommodation entries. (iv) My partnership firm M/s Hukum Chand Sushil Kumar, Guru Bazar, Amritsar has also so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistered dealer number of the purchaser and that is acknowledged by the purchaser as a registered dealer. The assessee firm was selling mainly gold jewellery and not old diamond jewellery. Therefore, the old diamond jewellery purchased was to be sold to another registered dealer who was purchasing and selling that jewellery. All the jewellery in question, on the basis of which the assessment is reopened was purchased and sold as it was without any process. 2. It was the diamond jewellery of some other parties which was purchased and sold to M/s Vishnu Jewellers and the profit earned by our firm was duly declared in the P&L a/c of the firm. This is fully illustrated in the charts and bank statements, which were filed before the learned AO and copies thereof are enclosed for your kind consideration and for ready reference. 3. From the chart of asst. yr. 1998-99 you will find that jewellery of four persons of Galhotra family taken on 17th April, 1998 for Rs. 42,84,250 was given to M/s Vishnu Jewellers under our sales bills dt. 20th Feb., 1998 and 21st Feb., 1998 for Rs. 42,92,918 earning profit of Rs. 8,668 only. The cheques received from M/s Vishnu Jewellers were cleared in our ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kum Chand Sushil Chand had stated that M/s Vishnu Jewellers is their concern and therefore, the diamond jewellery was sold to the said concern. Based on the said statements, the Departmental Representative contended that M/s Vishnu Jewellers was actually not engaged in any jewellery business and the jewellery was sold by M/s Vinod Jewellers to M/s Hukum Chand Sushil Chand and merely entry in respect of the same was routed through M/s Vishnu Jewellers, which goes to prove that M/s Vishnu Jewellers was not engaged in genuine business. However, contrary to the said assertion of the Departmental Representative, on careful perusal of the complete statement of Shri Vinod Kumar, we notice that what emerges from his statement is that he actually sold diamond jewellery to M/s Vishnu Jewellers through M/s Hukum Chand Sushil Chand. The said transaction was done by M/s Vinod Jewellers through M/s Hukum Chand Sushil Chand and that M/s Vinod Jewellers were not independently aware and had no direct dealings with M/s Vishnu Jewellers. However, Mr. Vinod Kumar in his statement had repeatedly stated that the transaction of sale of diamond jewellery to M/s Vishnu Jewellers was done by treating the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us where the seller has denied having sold jewellery to the assessee. On the contrary, we find that in case of one of the seller, Shri Rajiv S. Arora the Mumbai Bench of the Tribunal has accepted sale of jewellery to M/s Vishnu Jewellers. Copy of the said decision is placed at pp. 532 to 538 of the assessee's paper book. 67. All the aforesaid facts and circumstances, in our considered view clearly lead to the conclusion that the assessee was engaged in the jewellery business in the name of his proprietary concern M/s Vishnu Jewellers. Before we deal with various findings given by the AO and also the evidences and contentions raised by the learned Departmental Representative, we may also note that various statements of the assessee were recorded at various stages, both by the Dy. Director of IT (Inv.) as well as AO in order to determine as to whether or not the assessee was engaged in jewellery business. The first statement of the assessee was recorded on 13th Feb., 2002, which is reproduced on pp. 33-35 of the assessment order for the asst. yr. 1998-99. Some of the questions put to the assessee, Shri Rishi Grover, in his said statement are reproduced hereunder: "Q. 1 Plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor of IT (Inv.), Amritsar, we may, however, refer to various other statements (about nine) recorded by the AO during the assessment proceedings. In his first statement dt. 16th Sept., 2003, recorded by the AO, placed on pp. 177-178 of the assessee's paper book, it is noticed that the assessee again confirmed having carried on jewellery business. This fact was repeatedly confirmed by the assessee, Shri Rishi Grover, in all his subsequent statements dt. 11th Nov., 2003, 17th Nov., 2003, 20th Nov., 2003, 15th Jan., 2004, 13th Aug., 2004, 16th Sept., 2004, 30th Sept., 2004 and 31st Dec., 2004. Some of the extracts from the statements of the assessee are reproduced hereunder: Statement dt. 11th Nov., 2003- "Q. 7 When and how did you start this business in jewellary? Ans. I started this business in 1993-94. I met Shri Satish Kapoor, whom I knew since long since I lived in that locality. He has a shop by the name of M/s Hukam Chand Sushil Kumar. He started giving me some repair work of old jewellery." Statement dt. 17 Nov., 2003- "Q. 11 When did you start purchase of old jewellary and ornaments, i.e., trading in jewellary? Ans. I started trading in jewellary in 1997. Q. 12 Wha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be accepted. 71. On perusal of the assessment order, it is noticed that the major circumstances which lead the AO to believe that the assessee was not engaged in genuine jewellery business and was merely providing accommodation entries to the various persons are the two statements of the assessee dt. 16th Jan., 2003 and 17th Jan., 2003 recorded by Dy. Director of IT (Inv.) and also the fact that substantial cash amounts were deposited in the bank account of the assessee against which cheques were subsequently issued to various sellers of the jewellary. Apart from this fact, the AO in his detailed assessment order has primarily referred to the statements of various other persons recorded by the Dy. Director of IT (Inv.) and also by the AO subsequently during the course of assessment proceedings in order to try to establish that the assessee was not into the genuine jewellery business. 72. Firstly, coming to the so-called confessional statements of the assessee, Shri Rishi Grover, recorded on 16th Jan., 2003 and 17th Jan., 2003 by the Dy. Director of IT (Inv.), on a careful consideration of various factual circumstances in which the said statements recorded, we find substant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcion being employed by the Dy. Director of IT (Inv.) prior to the recording of the statements. Further a detailed note was filed along with the returns of the income for the asst. yrs. 1999-2000 to 2002-03 on 31st March, 2003, which reads as under: "Note attached along with the return filed: 1. I am filing my IT returns for asst. yrs. 1999-2000 to 2002-03 voluntarily and in good faith. 2. I was the sole proprietor of M/s Vishnu Jewellers in which I was doing the business of purchase and sale of jewellery and labour work of jewellery. The said business was started by me during the financial year 1995-96 and I have already filed my IT returns for asst. yrs. 1996-97, 1997-98 and 1998-99 as my income for all these three years was taxable. 3. Thereafter, although I was carrying on the said business of jewellery M/s Vishnu Jewellers but my income for asst. yrs. 1999-2000 to 2002-03 was below the taxable limits. I was under the impression that since my income is below the taxable limit I was not required to file the IT returns and was not required to get the accounts audited under s. 44AB of the IT Act. 4. For the last couple of months I have received a number of notices from the Dy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... All the transactions of M/s Vishnu Jewellers were genuine and represent the true state of affairs and are hereby confirmed by me. 11. I am filing the returns for asst. yrs. 1999-2000 to 2002-03 voluntarily so as to reconfirm my above noted contentions." 74. We also note that the AO, during the course of assessment proceedings, cross-examined the assessee, Shri Rishi Grover, on the affidavit filed by him in his statement dt. 10th March, 2005 placed at pp. 223-226 of the assessee's paper book. In the said cross-examination, the assessee maintained that the statements dt. 16th Jan., 2003 and 17th Jan., 2003 were not his voluntary statements but were statements under threat and coercion. 75. The aforesaid facts, in our considered view, do indicate that the so-called confessional statements of the assessee dt. 16th Jan., 2003 and 17th Jan., 2003 were not his voluntary statements, which were subsequently retracted, firstly vide note dt. 31st March, 2003 and supported by his affidavit dt. 14th Feb., 2003. In these circumstances, in our considered view, the said statements dt. 16th Jan., 2003 and 17th Jan., 2003 could not have been used as evidence against the assessee. In the serie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is to be noted that, merely because a statement is retracted, it cannot be recorded as involuntary or unlawfully obtained. It is only for the maker of the statement who alleges inducement, threat, promise, etc. to establish that such improper means have been adopted. However, even if the maker of the statement fails to establish his allegations of inducement, threat, etc., against. the officer who recorded the statement, the authority, while acting on the inculpatory statement of the maker, is not completely relieved of his obligation at least subjectively to apply its mind to the subsequent retraction to hold that the inculpatory statement was not extorted. It thus boils down to this that the authority or any Court intending to act upon the inculpatory statement as a voluntary one should apply its mind to the retraction and reject the same in writing. It is only on this principle of law that this Court, in several decisions, has ruled that, even in passing a detention order on the basis of an inculpatory statement of a detenu who has violated the provisions of the Foreign Exchange Regulation Act or the Customs Act, etc., the detaining authority should consider the subsequent re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he confessional statements cannot be the sole basis for making assessments or for making any additions in the hands of the assessee. 80. In the present case, as has been noted by us hereinabove, the statements of the assessee, Shri Rishi Grover, recorded on 16th Jan., 2003 and 17th Jan., 2003 by Dy. Director of IT (Inv.) were not his voluntary statements but were recorded by the Dy. Director of IT (Inv.) under threat and coercion. The learned Departmental Representative, however, contended that the statements of the assessee recorded on 16th Jan., 2003 and 17th Jan., 2003 were the voluntary statements of the assessee and there is nothing on record to establish that the assessee was threatened to give the statements. It was further contended that had there been threat, the assessee should have reported the matter to the higher authorities. We, however, note that the assessee has placed on record a letter written by the Amritsar Jewellers Association to CBDT, placed on pp. 96-102 of the assessee's paper book wherein complaint has been filed against the officials of the Investigation Wing of Amritsar. In these circumstances, we are of the considered view that so-called confession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of IT (Inv.). 82. On a careful consideration of the aforesaid submissions, we are of the considered view that at a time when the statements were recorded by Dy. Director of IT (Inv.), no proceedings were pending against the assessee. Further under the provisions of s. 131 of the IT Act, the Dy. Director of IT (Inv.) could have recorded statements under sub-s. (1A) thereto, that too, in connection with any pre-search enquiry only. The said sub-section is reproduced as under: "131. Power regarding discovery, production of evidence, etc.-(1) The AO, Dy. CIT(A), Jt. CIT, CIT(A) and Chief CIT or CIT shall, for the purposes of this Act, have the same powers as are vested in a Court under the CPC, 1908 (5 of 1908), when trying a suit in respect of the following matters, namely: (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath; (c) compelling the production of books of account and other document; and (d) issuing commissions. (1A) If the Director General or Director or Jt. Director or Asstt. Director or Dy. Director, or the authorised officer referred to in sub-s. (1) of s. 132 before he tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) on the IT authorities referred to in that sub-s. notwithstanding that no proceedings with respect to such person or class of persons are pending before him or any other IT authority. The officers, i.e., the officers mentioned in sub-s. (1) of s. 131 are also possessed of the power of the Civil Court regarding discovery, production of evidence, etc., in relation to the judicial proceedings before them in regard to the assessment and there was no question of repetition of those officers performing judicial function in sub-s. (1A) of s. 131 of the Act, but the power under s. 131(1A), is exercised notwithstanding that no proceedings with respect to such person or class of persons are pending before him or any other IT authority, for the purpose of the items enumerated in cls. (i) to (v) mentioned therein. But under the power of such search and seizure under s. 132 of the Act, the concerned authority cannot exercise power as enumerated in cls. (a), (b), (c) and (d) of s. 131(1) of the Act, on the basis of the reasons to believe consequent upon information in his possession in regard to the undisclosed income or property in regard to the income or property which is concealed or is like ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of Classic Builders & Developers relied upon by the learned Departmental Representative cannot be applied in view of the aforesaid decision of the Division Bench of the same Hon'ble High Court in the case of Arjun Singh discussed hereinabove. 86. In view of the aforesaid legal position, it clearly emerges that statements of the assessee and various other persons recorded by the Dy. Director of IT (Inv.) were not valid statements in the eyes of the law and, therefore, the same could not be relied upon. The Hon'ble Supreme Court of India in the case of K.T.M.S. Mohd. & Anr. observed that if the officer exercising powers under s. 40 of the FERA, was not a Gazetted Officer, there is no sanctity to the statements recorded by him under sub-s. (1) of that section. It has been similarly held by the Delhi Bench of the Tribunal in the case of Asstt. CIT vs. K.L. Jolly & Sons, Amritsar Bench of the Tribunal in the case of Pyramid Software & Technologies and Mumbai Bench of the Tribunal in the case of Late Shri Mukund V. Kapadia, relied upon by the learned Authorised Representative for the assessee, that statement recorded by an authority not competent to do so is an i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected to cross-examination, the same could not be relied upon as has been held by the Supreme Court in the case of Kishinchand Chellaram. (b) Statement of Shri Jatinder Anand recorded on 6th Jan., 2003 by the Dy. Director of IT (Inv.) has been relied upon by the AO. On perusal of the statement dt. 6th Jan., 2003, it is, however, noticed that Shri Jatinder Anand in the said statement confirmed having given one shop on rent to M/s Vishnu Jewellers. Subsequently, in his statement dt. 22nd Jan., 2004, which has been discussed by us in the earlier part of the order, Shri Jatinder Anand again confirmed having given shop No.3 on rent to M/s Vishnu Jewellers, the proprietary concern of the assessee. The learned Departmental Representative in his submissions, however, contended that the subsequent statement of Mr. Jatinder Anand was a coached statement given at the behest of one Shri V.K. Umat and, therefore, his statement recorded by the AO on 22 Jan., 2004 could not be relied upon. We fail to appreciate such contention of the learned Departmental Representative. Firstly, statement of Mr. Jatinder Anand has been relied upon by the AO against the assessee and now merely because his subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of jewellery. (d) Statements of Shri Chamel Singh (alias Nikku) and Shri Raj Kumar (alias Bittoo), both employees of the assessee, were also recorded by the AO on 30th Dec., 2003. The AO in his assessment order has referred to certain inconsistencies in the statements of the two employees to allege that the assessee was not doing genuine jewellary business. On perusal of the statements reproduced on pp. 84-86 of the assessment order, we, however, notice that both the employees have confirmed in their respective statements that they worked for Shri Rishi Grover, the assessee herein and that the assessee carried on jewellery business from its shop in Anand Building, Patel Chowk, Amritsar. The said two statements, in our considered view, clearly support the case of the assessee that the assessee was engaged in jewellery business rather than supporting the case of the Revenue. (e) Statement of one Shri Hukumat Rai recorded on 6th Feb., 2004 by the AO has been relied upon by the AO to contend that he was one of the persons filling cheques, etc. for M/s Vishnu Jewellers. The learned Departmental Representative contended before us that Shri Hukumat Rai was a part-time employee of M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment was recorded under pressure, which, even otherwise was an invalid statement and could not be the basis for holding that the assessee was merely providing accommodation entries and that the appellant was not engaged in the jewellery business. (g) Statement of one Shri Vijay Gupta recorded on 6th Feb., 2004 by the AO has been relied upon by the AO to state that he was also an employee of Umat & Associates and he used to fill cheques, deposit vouchers, bills for M/s Vishnu Jewellers, the proprietary concern of the assessee. The learned Authorised Representative for the assessee, however, submitted that, Shri Vijay Gupta was part-time accountant of the assessee and, therefore, he used to fill cheques, deposit vouchers, bills, etc., of the assessee. It was further submitted that his statement supports the claim of the assessee rather than supporting the case of the Revenue. The learned Departmental Representative relied upon his statement to contend that there appears to be no reason as to why Shri Vijay Gupta was at all required for filling cheques, deposit vouchers, bills, etc. He submitted that the assessee used to give the details by writing on the piece of paper and subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utiny assessment by the Department. On careful consideration of various statements of the two brokers, we notice that though initially said two persons confirmed having worked as brokers for the assessee, but in their statement recorded in March, 2005, both the persons denied having conducted jewellary business for the assessee. Thus, while the first statements support the stand taken by the appellant, the subsequent statements to some extent support, the case of the Revenue since even according to the assessee entire sales were not effected through the said brokers. It is, however, noticed that both the persons have taken contrary stands in their various statements recorded by the AO and, therefore, both the persons could not be regarded as reliable witnesses. Furthermore, the contention of the learned Authorised Representative for the assessee that in their subsequent statements the said persons they may have taken contradictory stand in order to evade their respective scrutiny assessment cannot be brushed aside lightly and such position cannot be ruled out altogether. In the aforesaid circumstances, on the basis of the statements of these two persons it cannot be concluded th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the office of Umat & Associates is found mentioned in various documents like application for allotment of PAN. sales-tax registration, surety bonds, etc. On the basis of the same, it was repeatedly contended by the learned Departmental Representative that the assessee did not carry on jewellery business and the entire transactions were done at the behest of Shri V.K. Umat of M/s Umat & Associates. On a careful perusal of the various records brought to our attention, we find no merit in such contention of the Department. It was the contention of the learned Authorised Representative for the assessee that the particulars of Umat & Associates were mentioned since Shri Kapil Agarwal was the consultant of the assessee and he was associated with M/s Umat & Associates. It is a usual practice to mention the particulars of the consultant in various application forms for the sake of convenience. There is merit in such contention and the mere fact that particulars of the office of M/s Umat & Associates is found mentioned in various application forms could not, in our considered view, be the basis for holding that the assessee did not carry on any actual business and the entire transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Departmental Representative that original bills and vouchers were never actually lost cannot be accepted. Furthermore, the Departmental Representative has not been able to rebut the contention of the appellant's Authorised Representative that each and every bill stands duly recorded and included in the return of income and the duplicate bill books were printed merely to issue duplicate bills to the persons who lost their original bills and in whose cases proceedings were initiated by the IT Department. In these circumstances, we are unable to accept the contention of the Departmental Representative that the fact that the duplicate bill books were found during survey goes to show that the appellant was actually engaged in providing accommodation entries. 95. In view of the aforesaid discussion, we are of the considered view that documents and evidences relied upon by the appellant-assessee clearly proves that the appellant carried on business of purchase and sale of jewellery under the name of its proprietary concern, M/s Vishnu Jewellers. None of the documents and evidences collected by the Revenue authorities goes to establish that the appellant was actually engaged in m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade were included by the appellant subsequently after the books of accounts were impounded by the Dy. CIT(A) on 6th Jan., 2003 merely to give the colour of genuineness to the appellant's business. 98. On hearing the rival submissions, vide our separate order dt. 27th May, 2009, the application of the appellant for admission of additional grounds was allowed by us. In the said order, after perusing the records of the CIT(A) it was held that since the appellant had submitted the bills of purchase of bullion from SBI vide its letters dt. 13th Feb., 2006 and 22nd Feb., 2006, the first appellate authority erred in not considering the same even though the said documents were part of records. We also found the contention of the learned Departmental Representative that the letters dt. 13th Feb., 2006 and 22nd Feb., 2006 could not be relied upon because they were planted/inserted in the file of the learned CIT(A) to be incorrect and not supported by any iota of evidence. Contrary to the said contention of the learned Departmental Representative, the said letters were actually found in the file of the CIT(A), which was produced before us during the course of hearing. Even further, the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we also note at the same time that despite the quantum of turnover and the bank statements of PNB account being available with the AO, the AO did not bother to investigate to find out the reason for variation in the entries as per the PNB account and the turnover disclosed in the return of income. Had he investigated, he would have found that the turnover declared in the return of income included the turnover relating to the bullion trade. 101. That apart, we further note that the details of bullion trade were very much filed by the assessee before learned CIT(A). The contention of the learned Departmental Representative that details of bullion trade were not even submitted by the assessee before the CIT(A) in its letter dt. 13th Feb., 2006 and 22nd Feb., 2006 is found to be factually incorrect since in the said letters, the assessee has clearly stated the facts relating to purchase of bullion from SBI during the period 1st April, 1998 to 31st March, 1999. We may mention that there is a specific discussion about the same in letter dt. 13th Feb., 2006 and in para 3 of the letter dt. 22nd Feb., 2006. We, therefore, fail to appreciate the contention of the learned Departmental Repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er elaborately dealing with the rival submission came to the conclusion that the jewellery business carried on by M/s Bemco Jewellers (P) Ltd. and M/s Bishan Chand Mukesh Kumar was genuine and not accommodation entry as alleged by the Revenue authorities. We may reproduce hereunder the observations given by the Tribunal while holding the business of the assessee therein to be genuine. 105. In the case of M/s Bemco Jewellers (P) Ltd., the Tribunal concluded as under: "82. In view of the foregoing discussion, it appears to us that the evidence collected by the Revenue authorities is not sufficient to establish their stand that the jewellery transactions carried on by Bemco Jewellers (P) Ltd. were only paper transactions or bogus and that Manoj Aggarwal, who was one of the directors of the company at the relevant time, controlled and put through these transactions by accommodation entries and earned commission income therefrom. We are aware that the entire evidence has to be appreciated in a wholesome manner and even where there is documentary evidence, the same can be overlooked if there are surrounding circumstances to show that the claim of the assessee is opposed to the normal c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aggarwal through Friends Portfolio and he has also been paid commission in that business. Bemco has been found to have had a shop or showroom in 1182, Kucha Mahajani and this has been confirmed by the report of the Sales-tax Inspector as also by the rental receipt starting from January, 1998. Thus, the surrounding circumstances, apart from the direct evidence in the case, do not contain anything which belies the claim of Manoj Aggarwal that though his share transaction business was only an accommodation entry business for commission, the jewellery business carried on by Bemco has not been proved to be so. 83. For these reasons, we allow ground No. 3 in the appeal of Manoj Aggarwal. Thus, his appeal in IT(SS)A No. 404/Del/2003 is partly allowed. The appeal of the Department in IT(SS)A No. 415/Del/2003 is dismissed. IT(SS)A No. 452/Del/2003; Bemco Jewellers (P) Ltd. 84. This is an appeal by Bemco which is consequential to our decision in the appeal of Manoj Aggarwal, as stated in para 35. The result will be that Bemco will be liable to be assessed substantively in respect of the profits from the purchase and sale of jewellery in its regular assessments which have already been com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal as additional evidence. He has contended that this will enable the AO to reach a proper conclusion after taking into consideration this entire evidence which has been gathered after the completion of assessment in the case of Tejinder Singh, HUF and which is relevant to decide the issues involved in the said case. Although this plea of Shri S.D. Kapila sounds to be logical and legally tenable, we find it difficult to accept the same in view of our decision rendered in the cases of Shri Manoj Aggarwal and Bemco Jewellers (P) Ltd. in the foregoing portion of this order. It is no doubt true that the jewellery by Tejinder Singh, HUF was sold to M/s Bishan Chand Mukesh Kumar and the issue about the genuineness of the transactions of purchase and sale of jewellery by M/s Bishan Chand Mukesh Kumar including the purchase of jewellery from the assessee has not been considered and decided by us on merits. However, a similar issue involved in the case of Bemco Jewellers (P) Ltd./Manoj Aggarwal has been considered and decided by us on merits. In the said cases, the facts involved were almost similar to the facts involved in the case of Bishan Chand Mukesh Kumar inasmuch as the transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Bemco/Manoj Kumar on the said issue is applicable even in the case of M/s Bishan Chand Mukesh Kumar with equal force and this being so, no meaningful purpose will be served by sending the matter back to the AO for reconsideration and redecision merely because the issue has not been decided on merits in the case of M/s Bishan Chand Mukesh Kumar. In our opinion, this exercise would prove to be merely academic and it would result only in multiplicity of litigation. In that view of the matter and keeping in view the reasons given above, we do not find any justifiable reason to send this matter to the AO for reconsideration as sought by Shri Kapila and following our conclusion drawn in the case of Bemco/Manoj Aggarwal, we hold that the transaction relating to sale of jewellery in the case of the present assessee, i.e., Tejinder Singh, HUF is genuine. Accordingly, we delete the addition made by the AO and confirmed by the CIT(A) under s. 68 and allow this appeal of the assessee." 107. The aforesaid decision is, in our considered view, squarely applicable to the facts of the appellant's case. Respectfully following the aforesaid decision of the Special Bench of the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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