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TMI Blog2005 (1) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... same. The Department is also objecting by its grounds, to the deletion of addition on account of payment of commission at the rate of 3 per cent for arranging the alleged havala transaction under section 69C of the Act. Again, grounds on this issue are also similar in all these appeals, though amounts are different. 3. At the time of hearing, the learned Departmental Reprcsentative has fairly stated that though the grounds are 26 in number in each of these five appeals, the effective grievance is only against the deletion by the CIT(A) of additions under sections 68 and 69C made by the AO. 4. 1 have considered the orders of the AO and the C1T(A) and other materials to which my attention was drawn at the time of hearing of these appeals. As stated above, the facts in all these five appeals are identical. I will discuss the facts of the case and contentions of the parties in the case of Smt. Jyoti Prakash Chhabria (ITA No. 1592/Mum/2004) and give my findings thereon. The outcome of that case will apply to the other cases as well, as the facts in those cases are identical. This proposition of mine was accepted by both the parties at the time of hearing. 5. The assessee. Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved through account payee cheques Therefore, it was submitted that the sales shown by the assessee are genuine. However, the Assessing Officer was not satisfied. In his view, both the jewellers to whom the jewellery was sold by the assessee have categorically admitted before the search/investigation party that no purchases have been made by them, and the cheques had been issued after taking cash through middlemen Summons under section 131 were also issued to both the jewellers, viz., proprietor of M/s. Kankai Jewellers who did not appear. However, proprietor of M/s. Dhunanjay Diamonds has confirmed having made the purchases from the assessee. The Assessing Officer was not satisfied with the reply sent by Shri Vishnudut proprietor of M/s. Dhananjay Diamond, as before search party, he has categorically admitted not having made any purchases in respect of jewellery and diamonds and that the cheques were issued, after accepting the amount in cash In lieu of cheques. Accordingly, the Assessing Officer has made an addition of ₹ 1,04,562 on account of sale made to M/s. Kankai Jewellers and further addition of ₹ 2,37,920 on account of sale made to M/s. Dhananjay Diamonds and al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it is irrelevant that the jewellery and diamonds declared under VDIS were accepted by the Department, and the important thing is whether the assessee has sold her jewellery/diamonds or not. As it is evident from the order of the AO, assessee has not sold any jewellery, and to convert the black money into white, she has come out with fictitious transaction which has been proved, as the party to whom the jewellery has been shown to have been sold, has categorically denied the same. 8. On the other hand the learned Authorised Representative of the assessee reiterating the contents urged before the lower authorities, placed strong reliance on the order of the CIT(A). 9. After considering the rival submissions and perusing the orders of the authorities below along with other materials placed on record, I find that there is no infirmity in the orders of the CIT(A). The CIT(A) after considering the order of the AO in the light of submissions made before him and other material on record has found that there are number of discrepancies and contradictions in the facts of the case and the statements recorded under section 132(4) in the case of Shri Milan P. Gandhi, proprietor of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in cash only The purchase of gold biscuits and bars is also substantiated by the seized papers found during the course of search. (iv) The AO has mentioned that Shri Milan P. Gandhi as issuing cheques to the VDIS declarants after receiving cash through M/s. Maya Jeweller of Kalyan. It is seen that 3 per cent of the sales value has been added as unexplained expenditure under section 69C in the assessment order. In the 132(4) statement, Shri Milan P. Gandhi had stated that he was selling gold biscuits to M/s. Maya Jewellers during the year. It is further ascertained that in the case of M/s. Maya Jewellers, no addition has been made in the block assessment proceedings under section 158BC. In fact, block assessment proceedings in the case of M/s. Maya Jewellers has been dropped by same AO who passed block assessment order in case of Shri Milan P. Gandhi. It is seen that full preliminary statement and full section 132(4) statement copies were not given to the appellant. The full bank statements copies of Shri Milan P. Gandhi were not given to the appellant. It is seen that there is so question regarding cash deposits prior to the period 5th May, 1998 in case of bank account in Kapo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposited in his bank account. The relevant dates on which cheques were issued to the assessee were of later date. It was further noted by the CIT(A) that the statement of Shri Milan P. Gandhi was not provided to the assessee for filing her explanation/objections. On this aspect, reliance has been placed by the CIT(A) in the case of Kishinchand Chellaram (supra). Thereafter, reliance was placed by the CIT(A) in the case of Udayraja Goliya (HUF) v. Asstt. CIT [1998] 64 ITD 21 (Bom.)(TM) in the case of CIT v. Orissa Corporation (1986) 52 CTR (SC) 138/[1986] 159 ITR 78 (SC) ; CIT v. Baishnav Charan Mohanty [1995] 212 ITR 199 (Ori.); CIT v. U.M. Shah [1973] 90 ITR 396 (Bom.) and CIT v. Devi Prasad Khandelwal [1971] 81 ITR 460 (Bom.), and then a conclusion was arrived that the AO was not correct in drawing any adverse inference against the assessee that no sale was made by the assessee. The CIT(A) has also taken into consideration that no material was brought on record to establish that assessee has paid 3 per cent over and above the cheque amount received on account of sale of jewellery and diamonds. Therefore, the entire addition on account of sale of jewellery and also on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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