2011 (3) TMI 137 - HC - Income Tax

Appeal to High Court - Sale of jewellery - The Hon ble ITAT Bench deleting the addition made by the A.O. on account of transaction of sale of jewellery without appreciating the evidence on record and the facts of the case - Hence, the matter is covered by judgment of Court , CIT v. Sh. Tejinder Singh HUF, wherein questions have been answered in favour of the revenue after hearing the parties and the matter has been remanded to the Tribunal for fresh decision - Hence, remand the matter to the Tribunal for fresh decision on merits in accordance with law after hearing the concerned parties - If respondent-assessee is aggrieved by this order, he will be at liberty to move this Court for appropriate orders.

Issues:
1. Appeal under Section 260-A of the Income Tax Act, 1961 against the ITAT order for the assessment year 2000-01.
2. Justification of ITAT Bench in deleting the addition made on account of a transaction of sale of jewellery.
3. Validity of ITAT's decision in following a previous order of the Special Bench of ITAT, New Delhi.
4. Contradictory findings in the ITAT order regarding a hawala operator and a genuine business of trade of jewellery.
5. Justification of ITAT in following its decision in another case without appreciating the facts and evidence.
6. Acceptance of the genuineness of jewellery transactions conflicting with the "Normal human conduct" principle.
7. Alleged error by ITAT in applying different standards for the appellant Revenue Dept. and respondent.
8. Covered matter remanded to the Tribunal for fresh decision.

Analysis:
1. The High Court heard an appeal under Section 260-A of the Income Tax Act, 1961 against the ITAT order for the assessment year 2000-01. The appellant raised substantial questions of law regarding the addition made on account of a transaction of sale of jewellery. The Court considered the justification of the ITAT Bench in deleting this addition without appreciating the evidence on record and the facts of the case.

2. The Court also examined the validity of ITAT's decision in following a previous order of the Special Bench of ITAT, New Delhi, which was challenged as perverse. Contradictory findings were noted in the ITAT order regarding a hawala operator and a genuine business of trade of jewellery, raising concerns about the consistency and reasoning behind the decisions.

3. Further, the Court assessed whether ITAT was justified in following its decision in another case without properly considering the facts and evidence presented in the present case. The acceptance of the genuineness of jewellery transactions was questioned, especially in light of conflicting with established legal principles such as the "Normal human conduct" principle.

4. An alleged error by ITAT was highlighted for applying different standards for the appellant Revenue Dept. and the respondent, creating a disparity in the burden of proof and treatment of evidence. The Court acknowledged a covered matter that had been remanded to the Tribunal for a fresh decision on merits in accordance with the law after hearing all concerned parties.

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