9911796707
TMI Blog2007 (10) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee is a Hindu Undivided Family (HUF) and had returned a total income of Rs. 10,52,195 for the year under consideration. The total income so declared included a sum of Rs. 9,55,800 as long-term capital gains on sale of diamonds. To verify the genuineness of the said sale of diamonds, extensive investigation was carried out by the Assessing Officer. The said diamonds were claimed to have been declared under the Voluntary Disclosure of Income Scheme (VDIS) in support of which VDIS certificate issued by the CIT was placed on record. The value of the diamonds was declared at Rs. 39,79,962. Taxes were paid on the said disclosure. The details of alleged sales of diamonds showed that the sale was effected in five lots to four different pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng accommodation entries. Report was also called from the Mumbai branches of the banks from whom DDs were purchased specifically calling for information regarding the names of the persons who had applied for the DDs and if they were purchased by cheque, then to indicate from whose account the cheque was issued. The report was indeed received and as stated by the Assessing Officer, DDs were purchased by depositing equivalent amount of cash in the account. The Assessing Officer then scrutinised the details of the travel undertaken by the assessee to Surat purportedly to sell the diamonds. In these details, the glitches noted by the Assessing Officer were that the assessee travelled alone carrying the diamonds and that five such visits were ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply because the travel of the assessee to Surat was not completely verifiable, that alone could not have been the ground to disbelieve the assessee s version. Further, none of the investigation reports like the statements of Madanlal and Gautam Jain were put before the assessee and he was not given any opportunity to cross-examine them. It was contended that even if the theory of human probabilities was to be considered, the Assessing Officer had not been able to disprove any of the evidence put forth by the assessee. Thus, it was vehemently pleaded that the action of the Assessing Officer was wholly unjustified and the addition made by him deserved to be deleted. 4. The contention of the learned Departmental Representative was that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer has taken great pains to conduct detailed enquiries. But somehow, in the later part of his seemingly fruitful exercise, in his enthusiasm to find his way to Surat, he lost direction and could not locate the assessee at Surat. In the process, he got completely misdirected to the extent that he could not appreciate even the uncontroverted and unproved evidence which was before him. Let us see how. 7. Firstly, the diamonds are declared in the VDIS in support of which the certificate issued by the CIT is placed on record. Therefore, the presumption is that the diamonds were in the possession of the assessee unless contrary is proved by the Assessing Officer. This has not been done by the Assessing Officer. Secondly, sale invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money deposited in the account could have been traced back. But it is here the Assessing Officer failed utterly. Though the Assessing Officer received the report from the bank, he has not brought these important details on record. It is not his case that the bank has not given the details. Therefore, there is a strong presumption in favour of the assessee that there was nothing adverse in the bank s report. Deposit of cash in the account on the same day may be by the purchaser of the goods himself but nothing turns on the assessee on account of that fact. We have reason to believe that because the Assessing Officer was failing to nail the assessee, he diverted his attention and energies on the purported trips of the assessee to Surat. He in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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