2012 (10) TMI 606 - HC - Income Tax

Sale of jewellery - income at Rs. 89,790/- including capital loss of Rs. 6,81,859/- on account of sale of jewellery for Rs. 14.3 lacs. - whether the transaction was genuine or not? - Held that - ITAT rejected the report of valuation officer as no record was maintained by him - ITAT further held that, why an experienced person like Walayam Ram went to such a lad at a distance of more than 1000 Kms for sale of his beloved diamonds which were kept by him from the last more than 50 years and not disclosed to anyone. The story does not appeal to us a plausible one. It is an attempt to create capital without paying any tax, it is not a genuine claim. - Order of ITAT sustained. The evidence which had been produced was of recent origin in the form of sale invoice or report of valuer. Initially, the onus which was placed upon the assessee was required to be discharged by providing unimpeachable evidence which could not have been created i.e. in the form of some document of past nature. The assessee had failed to produce any such material. The view which has been taken by the Tribunal is a plausible view. - Decided against the assessee.

Issues:
1. Delay in filing and refiling the appeal.
2. Appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal.
3. Questions of law raised in the appeal regarding addition of income based on sale of jewellery.
4. Consideration of the genuineness of the sale of jewellery in the assessment proceedings.
5. Evaluation of evidence presented by the appellant to establish the sale of jewellery.
6. Reversal of findings by the Tribunal regarding possession of jewellery and sale transaction.
7. Disagreement with the findings of the Commissioner of Income Tax (Appeals).
8. Upholding the order of the Assessing Officer and dismissing the appeal.

Analysis:

1. The judgment addressed a delay of 40 days in filing and 259 days in refiling the appeal, which was condoned after hearing the counsels for the parties.

2. The appeal was made under Section 260A of the Income Tax Act against the order of the Income Tax Appellate Tribunal, challenging the addition of income based on the sale of jewellery by the assessee.

3. The substantial questions of law raised in the appeal included whether the Tribunal's decision to uphold the addition of Rs.14,30,000/- was correct, considering the documentary evidence provided by the assessee.

4. The main issue in the appeal was to determine the genuineness of the sale of jewellery worth Rs.14.3 lacs made by the deceased assessee during his lifetime.

5. The appellant presented evidence such as sale invoices and a valuation report to establish the sale of jewellery, but the Assessing Officer rejected this evidence, leading to the addition of the amount to the assessee's income.

6. The Tribunal reversed the findings of the Commissioner of Income Tax (Appeals), emphasizing the lack of direct evidence proving the possession of the alleged diamond jewellery by the assessee, questioning the credibility of the valuation report and sales invoices provided.

7. The Tribunal found the evidence produced by the appellant to be of recent origin and failed to establish the possession of the jewellery adequately, leading to the decision to set aside the order of the Commissioner of Income Tax (Appeals) and restore that of the Assessing Officer.

8. The High Court upheld the Tribunal's decision, emphasizing that if two plausible views exist and one has been adopted, the Court cannot interfere unless the decision is shown to be erroneous or perverse. Consequently, the appeal was dismissed for lack of merit.

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