Delhi High Court
Commissioner Of Income Tax vs Smt. Seema Tripathi on 7 September, 2010
Author: Manmohan
#2-5
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
2.
+ ITA 1300/2010
COMMISSIONER OF
INCOME TAX ..... Appellant
Through: Mr. Abhishek Maratha with
Ms. Anshul Sharma, Advocates
versus
SMT. SEEMA TRIPATHI ..... Respondent
Through: Ms. Rani Kiyala, Advocate
AND
3.
+ ITA 1307/2010
COMMISSIONER OF
INCOME TAX ..... Appellant
Through: Mr. Abhishek Maratha with
Mr. Anshul Sharma, Advocates
versus
SMT. SEEMA TRIPATHI ..... Respondent
Through: Ms. Rani Kiyala, Advocate
AND
4.
+ ITA 1301/2010
COMMISSIONER OF
INCOME TAX ..... Appellant
Through: Mr. Abhishek Maratha with
Mr. Anshul Sharma, Advocates
versus
SHRI MITHILESH KUMAR
TRIPATHI ..... Respondent
Through: Ms. Rani Kiyala, Advocate
AND
5.
+ ITA 1306/2010
COMMISSIONER OF
INCOME TAX ..... Appellant
Through: Mr. Abhishek Maratha with
Mr. Anshul Sharma, Advocates
versus
SHRI MITHILESH KUMAR
TRIPATHI ..... Respondent
Through: Ms. Rani Kiyala, Advocate
% Date of Decision: 7th September, 2010
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE MANMOHAN
1. Whether the Reporters of local papers may be allowed to see the judgment? No.
2. To be referred to the Reporter or not? No.
3. Whether the judgment should be reported in the Digest? No.
MANMOHAN, J:
CM No.15510/2010 in ITA 1300/2010
CM No.15517/2010 in ITA 1307/2010
CM No.15511/2010 in ITA 1301/2010
CM No.15515/2010 in ITA 1306/2010
Allowed, subject to all just exceptions.
Accordingly, applications stand disposed of.
ITA Nos. 1300/2010, 1307/2010, 1301/2010 & 1306/2010
1. The present appeals have been filed by the Income Tax
Department under Section 260A of the Income Tax Act,1961 (for
brevity "Act, 1961") challenging the common order dated 7th October,
2009 of Income Tax Appellate Tribunal (in short "Tribunal") in ITA
No. 20/Agr./2008 for the Assessment Years 1999-2000 and 2000-2001
2. The relevant facts are that respondents-assesses showed long
term losses on account of sale of jewellery in their original returns of
income filed for Assessment Years under consideration. The jewellery
was shown to be sold to M/s. SMS Surya Ornaments and M/s. Shree Ji
Jewellers. The said jewellery were earlier declared by the assessees
under Voluntary Declaration of Income Scheme, 1997 (in short
"VDIS"). A search under Section 132 of Act, 1961 was conducted at
the residential premises of the assesses on 10th December, 2002. During
the post search enquires, M/s. SMS Surya Ornaments and M/s. Shree Ji
Jewellers were not found at their given addresses.
3. The Assessing Officer (in short, "AO") initiated proceedings
under Section 147 of the Act, 1961 and a notice under Section 148 of
the Act, 1961 was issued. The AO did not accept the explanation given
by the respondents-assesses in reply to the abovesaid notice and held
that the abovesaid concerns were sham identities created just to
facilitate the respondents-assesses to introduce the undisclosed income
in the garb of sale proceeds of jewellery. AO in the assessment order
for the relevant assessment years made additions (of Rs.17,450,552/- in
A.Y.1999-2000, Rs.65,24,953/- in A.Y. 2000-2001 in the case of Shri
Mithilesh Kumar Tripathi and Rs.16,36,470/- in AY 1999-2000 and
Rs.67,53,047/- in AY 2000-2001 in the case of Smt. Seema Tripathi
w/o Sh. Mithilesh Kumar Tripathi) on account of bogus cash credits.
4. The respondents-assesses preferred an appeal before the
Commissioner of Income Tax [in short, "CIT(A)"] against the
assessment order. The CIT(A) allowed the appeals preferred by the
respondents-assessees.
5. The appeals filed by the revenue were subsequently dismissed
by the Tribunal. Hence, the present appeals.
6. Mr. Abhishek Maratha, learned counsel for revenue submitted
that the Tribunal had erred in law in deleting the additions by holding
that the sale of jewellery was not a sham transaction. Mr. Maratha
further submitted that Tribunal had grossly erred in law in ignoring the
findings of the Commissioner of Customs and Central Excise in the
case of one Devi Das Garg that M/s. SMS Surya Ornaments and M/s.
Shree Ji Jewellers were dummy entities created for the purpose of
making accommodation entries.
7. Having heard the learned counsel for the appellant and having
perused the file, we are of the view that the respondents-assessees have
led sufficient evidence before the authorities below to establish the
genuineness and existence of the two parties and transactions of sale of
the jewellery.
8. In fact, the Tribunal in the impugned order has held as under:-
"9. Considering the above submissions, we find that the
AO relying upon the findings of ld. Commissioner of
Customs and Central Excise, Delhi relating to M/s. Shreeji
Jewellers, to whom the assessee had claimed to have sold
the gold jewellery declared in VDIS, 1997, doubted the
genuineness and existence of those two parties and the
claimed transaction of purchasing of gold jewellery by
them from the assesses and added the stated sale
consideration in the income of the assesses. The assesses,
on the other hand, produced all the necessary information
about these transactions and above named parties
supported with documents like their Permanent Account
Numbers, bank accounts, their trade-tax assessment
orders, sale vouchers issued by them against the claimed
sales as well as their full addresses. The assesses had also
produced the buyers' Income-tax returns for the relevant
years in which the profits on sale of jewellery shown in
respective returns were accepted by the department. The
sale considerations were also paid by them to the assesses
through account payee cheques. Thus in our view, the
assesses had furnished all the necessary information
supported with documents about the transactions and
parties which could have been expected from a prudent
seller to establish the genuineness of the claimed sales.
Not only that, the proprietors of both the said concerns in
response to summons u/s 131 issued to them by the AO in
their reply to the AO had affirmed the claimed sale of gold
jewellery by the assesses to them. It is also an undisputed
fact that the assesses had paid tax, as directed by the
department, while accepting their declaration made under
VDIS, 1997. There is also substance in the submission of
the assessee before the lower authorities that it was
beyond their power and control to compel the proprietors
of above named concerns to appear before the Assessing
Officer in person in compliance of summons u/s 131 issued
to them."
(emphasis supplied)
9. Further, we are of the view that the AO's reliance on the finding
of Commissioner of Customs and Central Excise in the case of the third
party without affording an opportunity to the respondents-assessees to
rebut or contradict the findings, is a clear violation of the principles of
natural justice. The Tribunal in this context has observed as under :-
10. ...........The ld. DR has also not denied this
arguments of the ld. AR in the present case before us that
the assesses were not afforded opportunity to comment
upon/contradict the findings of the ld. Commissioner of
Customs and Central Excise, Delhi that the above named
two parties, M/s. Surya Ornaments and M/s. Shreeji
Jewellers were not genuine by supplying this findings to
the assessee before using the same adversely by the
Assessing Officer against the assesses. It is obviously
violation of basic principle of natural justice. Considering
the totality of the above material facts and circumstances
of the present case, we are of the view that the ld. CIT(A)
has rightly deleted the additions in question made by the
AO disbelieving the genuineness of the claimed sale of
gold jewellery to the above named parties declared by the
assesses under VDIS, 1997. The finding of the ld. CIT(A)
in this regard is, thus, upheld....."
10. From the above, it is apparent that the Tribunal has given cogent
reasons for arriving at its factual conclusion. Moreover, in the present
appeals, no substantial question of law arises. Accordingly, the present
appeals being bereft of merit, are dismissed in limine.
MANMOHAN, J
CHIEF JUSTICE
SEPTEMBER 07, 2010
rn/ms
