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Smt. Umabai M. Kothari C/o. Lalit Handlooms, Shri. Satish O. Mahajan and Shri. Ashok Kumar Giridharilalji Versus Income tax Officer, Ward -1 (4) , Hubballi

2016 (6) TMI 1113 - ITAT BANGALORE

Addition u/s 68 - VDIS declarations - Held that:- A glance at the bill issued by M/s. Balaji Refinery does show that it was holding a licence. A Look at the purchase bill issued by the concerns show that they were having KST and CST registration numbers. In my opinion, these evidence do tilt the case in favour of the assessees. Assessees had done whatever possible, within their means to show that the gold jewellery sold by them were the same gold declared in VDIS, after converting it into bullio .....

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the assessee. Further there is nothing on record to show that the gold jewellery which were sold by the assessee were antique in nature. In such circumstances, the lower authorities fell in error in disbelieving the source for credits shown by the assessees concerned. Thus have no hesitation in deleting the additions made in the hands of the assessees. - Decided in favour of assessee. - ITA No.86/Bang/2016, ITA No.106/Bang/2016 , ITA No.268Bang/2016 - Dated:- 17-6-2016 - SHRI. ABRAHAM P. GEORGE .....

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declaring income, as under : Table No.1 Sl.No. Name of the assessee Income declared Rs. 1. Smt. Umabai M. Kothari 36,350/- 2. Shri. Satish O Mahajan 92,540/- 3. Shri. Ashok Kumar Giridharilalji 54,726/- 03. During the course of assessment proceedings it was noted by the AO that these assessees had credited the following sums as sale proceeds of gold/silver/bullion : Table No.2 Sl. No Name of the assessee Realisation from sale of gold / bullion Rs. Realisation from sale of silver Rs. Realisation .....

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Mahajan 2,07,628 Nil - 3. Shri. Ashok Kumar Giridharilalji 1,51,074 Nil Nil 05. When queries were raised about the source of the gold/bullion sold, assessees stated before the AO that these were the jewellery declared under VDIS Scheme after converting it to bullion. However, AO did not accept this contention of the assessees. According to him, the concerns to which assessees had claimed to have sold the gold never worked from the addresses given by the assessee. As per the AO, landlord of the .....

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sees who had declared gold jewellery through VDIS return, had claimed sale of such gold through MLJ for showing source. The inference drawn by the AO was that such sales could not have been effected in a short span of four months time and MLJ could not have done business to the tune of ₹ 20 crores in such a short span of time. Thus the AO held in all the above cases that the source for the credits mentioned at Table No.2 above were not proved by the assessees and additions were made accord .....

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cept the assessee's claim because it is supported by the evidence such as the bill issued by Mahalaxmi Jewellers, the fact that amount was reached by the assessee through cheque etc. There is also a letter written by Shri Siraj Ahmed, who is the landlord of the premises from which Mahalaxmi Jewellers carried the business ( pg.1 of the paper book), which says that the premises were given on rent for 11 months from 23.10.97. This letter was strongly relied upon by the learned counsel for the a .....

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s not . clearly say as to when Mahalaxmi Jewellers have also been adverted to in this paragraphs and it has been held that the transaction which Mahendra Kothari and others had with Mahalaxmi Jewellers have not been proved to be genuine. It is noteworthy that the Kothairs also had evidence to show that the jewellery was sold to Mahalaxmi Jewellery but despite this the Tribunal based its conclusion on the evidence brought before it to disprove the existence of Mahalaxmi Jewellers and the genuinen .....

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mself, and hold relying only on the evidence brought before me, that the sale by the assessee to Mahalaxmi Jewellers has been proved. /therefore hold, respectfully following the order of the Tribunal cited above that despite the documentary evidence filed by the assessee in the present case, the claim cannot be accepted in view of the findings recorded by the Tribunal in the above order regarding the existence of Mahalaxmi Jewellers. I accordingly confirm the addition and dismiss the appeal.&quo .....

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ssees were that the gold ornaments which were given for melting with M/s. Balaji Refinery, Hubli, was the very same which was shown by them in VDIS declarations. Assessees again relied on the bills of the concerns to which sale of gold and silver were made. AO after considering the submissions of the assessee and the bills issued by M/s. Balaji Refinery, Hubli, found that weight of the jewellery declared by the assessees, in the valuation report supporting the VDIS declarations were different fr .....

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and shaping it as bullion. Thus he reached a conclusion that what was sold by the assessees were not the gold jewellery which were declared by them in VDIS. He did not accept the source for the credits. Additions were made once again. 10. Aggrieved, assessees moved in appeal before the CIT (A) once more. CIT (A) noted that M/s. Balaji Refinery, Hubli through which assessees claimed to have melted the gold and silver articles to bullion, never existed in the address given by the assessees. As per .....

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had also verified with the owners of various buildings in Keshavpur, who vouched that no such building named, Azad Complex, existed nor they new any Balaji Refinery. Thus according to CIT (A) assessees were unable to show that the gold and silver jewellery which were declared by them in their VDIS returns were melted and converted through the concern called M/s. Balaji Refinery, nor were they able to show that any sale thereof were effected through any concern called MLJ. Thus the CIT (A) upheld .....

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given the details of the jewellery items which were given to them for melting. Labour charges were also paid by the assessees. Ld. AR submitted that copies of bills issued by M/s. Balaji Refinery clearly proved conversion of the ornaments into bullion. As per the Ld. AR, assessees concerned had converted the gold and silver jewellery to bullion since if sold directly as jewellery the items would have fetched much lesser amount. As per the Ld. AR if on an enquiry conducted after twelve years by .....

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l, for the assessment year 1998-99, where on similar set of facts the credits were accepted. 12. Per contra, Ld. DR strongly supporting the orders of authorities below submitted that AO had done detailed enquiries into the bills submitted by the assessees for melting the gold jewellery as well as for selling the gold. As per the Ld. DR it was quite unusual that both the refinery who melted the gold and silver jewellery and the jewellery shop which bought the gold were nonexistent at the time of .....

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was the same gold jewellery after converting it into bullion has been perused by us. Case of one of the assessees, namely Shri. Satish O Mahajan, has been taken as an example. The valuation report dt.18.11.1997, bill from M/s. Balaji Refinery, dt.13.01.1998 and the purchase invoice issued by MLJ, dt.15.01.1998 are reproduced hereunder: 14. What we note is that all the items which were appearing in bill issued by M/s. Balaji Refinery was also mentioned in the valuation report filed in support of .....

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