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2016 (6) TMI 1366 - AT - Income TaxDeclaration under VDIS - Introduction of cash in the books of accounts of the assessee on sale of sliver and diamonds which were declared under Voluntary Disclosure of Income Scheme, 1997 (VDIS) - HELD THAT - Same quantity of silver and diamonds which were declared under VDIS was sold. Though the assessee has declared the silverware in different form under VDIS, but in sale bill the assessee has sold silver bullion and diamonds separately. The assessee has filed evidence with respect to conversion of silverware into silver bullion and diamonds. Since the same quantity which was disclosed under VDIS was sold, I find no justification in making the addition on introduction of sale proceeds in the books of account. Once the Revenue has accepted the declaration under VDIS and accepted the tax deposited by the assessee, it should not have made a further addition on account of introduction of sale proceeds of the said jewellery in the books of account. I therefore find no merit in the addition made by the revenue authorities. Accordingly, I set aside the order of the CIT(Appeals) and delete the addition.
Issues:
1. Appeal against CIT(A) order for assessment year 1998-99. 2. Introduction of cash in the books of accounts related to sale of gold, silver, and diamond under VDIS. Analysis: 1. The appellant challenged the CIT(A) order for assessment year 1998-99 on various grounds related to the addition of cash in the books of accounts. The appellant disputed the assessment amount and the justification provided by the CIT(A) for confirming the addition under section 68 of the Act. Additionally, the appellant contested the findings regarding the nomenclature discrepancy between the declaration and sale invoice of gold, silver, and diamond. 2. The Assessing Officer raised a technical objection during the assessment proceedings, questioning whether the items sold were the same as those declared under the Voluntary Disclosure of Income Scheme, 1997 (VDIS). The matter was remanded to the AO by the High Court to determine this specific issue. Despite the appellant's explanations and evidence of conversion of jewelry into bullion, the AO and CIT(A) did not accept the contentions. 3. The Tribunal carefully examined the evidence presented by the appellant, including valuation reports, VDIS certificate, and sale documents. It was established that the same quantity of gold, silver, and diamond declared under VDIS was indeed sold by the appellant. The Tribunal noted that although the form of declaration differed from the sale bill, the conversion of jewelry into bullion was supported by evidence. 4. The Tribunal concluded that since the quantity declared under VDIS was sold, there was no justification for the addition of sale proceeds in the books of account. The Tribunal emphasized that once the Revenue accepted the declaration and tax payment under VDIS, further additions on the sale proceeds were unwarranted. Consequently, the Tribunal set aside the CIT(A) order and deleted the addition, allowing the appeal by the assessee. This judgment highlights the importance of consistency in declarations and sales transactions, emphasizing the need for proper documentation and evidence to support claims made during assessment proceedings.
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