TMI Blog2014 (10) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... w that all the three assesses have sold the diamonds, that are separated from the jewellery, at Surat. It is a place known for voluminous business in diamonds - Not only the particulars of the persons, who purchased the diamonds was furnished, but also the manner of payment was disclosed - The entire payments were through demand drafts - The purchaser was undoubtedly a dealer in diamond - Even assuming that on certain occasions, the corresponding assessee did not proceed to Surat, it cannot be a factor to disbelieve the transaction - When not only the respondents have disclosed the wealth in VDIS, but also have shown sale proceeds as capital gains, it was farfetched, if not unreasonable, on the part of the AO, to doubt their honesty in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, Tilak Raj Kumar, was ₹ 1,57,028/- and that of diamonds - ₹ 1,16,000/-. Certificates of disclosure were also furnished to them. All the three assesses are said to have sold away the jewellery declared by them under the VDIS. While the gold is said to have sold at Hyderabad, the diamonds are said to have been separated from the ornaments and sold at Surat. The sale proceeds of the jewellery were shown in the respective returns, as capital gains, for the assessment year 1998-99. The Assessing Officer believed the transaction of sale of gold at Hyderabad, but doubted the genuinity of sale of diamonds at Surat. After conducting a detailed enquiry, he disbelieved that, and treated the amount shown as sale proceeds of dia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct in law in holding that the alleged sale transaction of diamonds worth ₹ 51,92,750/- as claimed by the assessees, is a genuine transaction? 2. Whether on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the amount of ₹ 51,92,750/- cannot be added u/s.68 of I.T.Act? 3. Whether on the facts and in the circumstances of the case the Tribunal is correct in directing the Assessing Officer not to add aggregate the sum of ₹ 3,75,000/-, each, being the assessees share from M/s. Basant Farms for rate purposes? Heard the learned counsel for the appellant and learned counsel for the respondents. It is a matter of record that all the three assesses made separate voluntar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voluminous business in diamonds. Not only the particulars of the persons, who purchased the diamonds was furnished, but also the manner of payment was disclosed. The entire payments were through demand drafts. The cross verification undertaken by the Assessing Officer, did not result in noticing of any discrepancy. The bank accounts of the purchasers were verified and the demand drafts issued to the respondents, towards consideration, corresponded to the entries in the bank accounts. Unable to find any discrepancy in such important aspects, the Assessing Officer started the verification of travel particulars of the respondents. The record discloses that the sale of diamonds did not take at a time and it was in a phased manner. The purch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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