HUBLI«S6f) 020.
IN THE HIGH COURT OF KARNATAKA
CIRCUIT BENCH AT DHARWAE)
DATED THIS THE 232» my on' SEFVPEMBER 2002:"--- A ' H' A
PRESENT _
THE HONBLE MRJUSTICE -x
'THE HONBLE MRJU STICE $3-A'I'YANA_RA¥AAl**§AV":~--;
INCOME TAX APPEALNEX219/QG04 -
Between: " K" ' -- . V. n
s.RAMESHVMAH...:<;<31?HaR;;,._ __
AGED ABOUT 44'¥JEARS",V _ _
s/0 SR; HI_RAc}1AN:::~,a._» KO'I'HA'i?1 -- -
PARTNER, . .
M {s 3. MAHENDRA 3s--BI2=:3s,, _ '
DURGADBAIL,"?.OR1', A
APPELLANT
E33» Sri. S.PAI§T}--IASARATHI, ADV, )
" ~ 1 'j .ms.1gD- 1(3), HUESLI.
THE 1Nt::~}iE TAX OFFICER
... RESPONDENT'
;;(B’y-. ‘:91 v SH ESHACHALA, ADV. ,)
THIS I.’I’.A FILED U/S. 260A OF THE INCOME TAX ACT,
A A ” “1961 ARIS¥NC’z OUT OF’ ORDER’ DATEQ 17.12.2003 PASSED HQ
ETA NOA50/BANG/2003 FOR THE ASSESSMENT YEAR 1998-
99 PRAYING THAT THIS HON’}}3LE COURT MAY BE PLEASEE) T0
FORMULATE THE SUBSTANTIAL QUESTION OF’ LAW STATES
T1-IEREIN AND ALLOW THE APPEAL ANS SET ASIDE THE
ORDER OF THE TRIBUNAL BEARING ITA $10,450/BANG/2003
DATED 23.12.2003 ON THE VAIJDETY OF’ ASSESSMENT FOR
THE ASSESSMENT YEAR 1998-99 ETC.
THIS ETA comma on FOR HEARENG f;*§i’i’s”‘ –
SABI-KAHIT J2, DELIVERED THE FOLLOVHNG:
Jtmeuszrr
This appeal is by thtieassesseewi ugdef
260-A of the Income Tax Act,s_.1.§6.1 by
the order passed isfitehes . 51’sx Appellate
Tribunal, Ba11gsio;’e in ITA
No.450 1ss7.~1:ég2o_G3k’ confrmirlg the
order Cemmissioner of Income Tax
(Appeals), “Hub1i, ‘g1s.tedV:’::_i£7.2.20O3, who inturn had
_ the er*<ier__'pa.ssed by the Assessing Authority
'v._1ci:~rftV;ec!.V2Q_,3.2§50l., wherein the transaction declared in
as unexplained investment under
' {Sec1:ie1:… the Income Tax Act, 196i (for short the
2. The essential facts of the ease leading up to
VA ” appeal are as follows:
\/we
The assessee filed return of iI1come4~»..l_:etl;l~.._
23.11.1998 declaring a total income of Rs.
and the case was selected for H
approval of the Additional ‘ 11’
Tax, Range 1, Hubli. The_V:”‘~~assessee . some VA
Assessment Year 1998f99 * term
capital loss for la and notice
was issued of the Act.
The assessee copy of the
applicaiioié scheme, 1997 as also
“said application and
contended’ and diamonds which are
gnatteze-~ef’sale and declared in the regular
” articles which are the subject
oflvapfiificafion filed under VDIS Scheme, 1997
wlfierefore, no tax can be levied under Section 68
Act. The return filed by the appellant was
and the assessment was completed under
Section 143(3) of the Act. 011 29.3.2001, wherein the
assessing authority found that the transactions in
regard to the sale of jewellery declared under VDIS was
\2~/”
not genuine insofar as Sri Kailash Rawal, I’I’0pIiCl1OIiCif
Sri Mahaiaxmi Jewellers to whom the assfifil A’
sold the gold jewellery after oonversion into 1 ” l
not proved by the assessee V» is
sale of diamonds also hasV»’no_t ” proxretl tile .
assessee, aeeorrlirigly, the treated
the profits on sale of tlialmont-is
as unexplained iI1\feste:te:1t_ return of
the 1. Being
agg’ieveti__ authority,
the before the Commissioner
of Income the order passed by the
Assessfiiem A1it’:hlority:was confirmed in the appeal.
by the order dated 27.2.2003, the
an appeal before the Income Tax
V Bangalore Bench ‘C’, Bangalore
. V’ ‘the Vvllrleome Tax Appellate Tribunal confirmed the
Hlpassed by the Commissioner of Income Tax
who in turn confirmed the order of the
Assessing Offieer insofar as it relates to the transaction
of sales of jewellary to M/’ s Mahalaxmi Jewellers,
‘\,../”
Hubli, however reversed the finding of
Commissioner Income Tax (Appeals)
order passed by the Assessing Autlioxity
of diamonds and held that the
diamonds to M/s _VJeVv2ve1l{ers, = VA
Binal Gems and M/s emit said
to be unexplained has been
proved and alloww Being
aggrieved Income Tax
of jewellery to M/s
1 appeal is filed under Section
260-15; of iliaet, 1961.
Q We the learned counsel for the
it u
Tliere is no merit in the contention of the
e appearing for the appellant that the
_ Officer has admitted in the assessment order
V it the bullion that is sold is made out of jewellary
and the subject matter of application filed under VDIS,
97. As it is clear from the order passed by the
\,,/Q
Assessing Officer that the said Hansaction has
referred only to give deduction to the tax ”
already been paid and there is no finding ” ”
the transaction rekating to sale of _
the same jewellery decIared5i;.1 V.
under VDIS and for the same t1ie1*eé_VV:isV’:nof;n1eI’it
in the obeervation o:§ieIt_oi’ “the Incoele Tax
Appellate Tribune} ihrelaling to
diamond ‘Ky mean that
the buuiofieeai-it :5: eggzaeagjeewsma1; alaxmi Jeweilers is
the san:ge.3¢we11eiy§%é1¢¢1a:feciomder VDIS, 1997.
3 to the contenuons urged, the
V. .VV:4A’*«s;guest1on of law arises for our
dete:f;_n1rxei1;1o:1AV.i1;1*i”‘t1ns appeal is:
o ~ ‘Whether the finding ofthe Income Tax
Appezzate Tribunal oonfinning the order
“passed by the Commissioner of Income Tax
(Appeals) and the Assessing ofiioer that the
incomebywayofsaleofjeweltaryto
M75 Mahalaxmt Jewellers is an unexplained
investment is perverse or arbitrary for non-
yo}
consideration of material fact, as to whether .
the goods that are sold under the
transactions relied upon by the assesse
the same goods which had been ”
under the application filed VoZiif:tej:y””V
Dedarazion of Income z fl ‘
6. The above said
has been answered faets No.
186/2004 by hoiding as to whether
the jewellary xeetter of sale
decIere<i"if1 am' the same subject
matter the finder voxs, 97 and the
said deeisioti me appeal would decide the
V' question..;-eVasve« nto w'heifier the income from the said
be unexplained investment under
69. Act. If the aseessee is able to prove
tilevjfsunion that was sold was made out of the
declared in the application under VDIS 97,
’11’ VA said amount realised to the said transaction would
VA ~ ” not amount to unexplairxed investment under Section
69 of the Act. However, if the assessee is not able to
prove that the goods that is the subject matter of
\,,./”
transaction as declared in the regular returns is magdej
out of the same jewellary which was ”
application filed under VDIS 97, the 9′ _
realised to the said uansaetiori
unexplained investment undeij Sectiofi 69 9′
Accordingly, for the
appeal I.T.A.No. 186/0-4;,’_”‘:’;ve :1_a;t~isr,1;e substantiai
question of law had to and
accordingly, it
by the Income Tax
9 nApV’pe~iiate_Afi’Iiburia1, Bangalore Bench ‘C’ in
:vIifo;4f50/Bang/2003 for the assessment
1998-99 confirming the order passed
.9 the Commissioner of Income Tax
(Appeals) dated 27.2.2003 who inturn had
confirmed the order passed by the
Assessing Officer insofar as it relates to sale
of jewellary to M] s Mahalaxmi Jewellaiy is
set aside and the matter is remitted to the
\},,}x
Tl
Income Tax Oflicer, Ward No.1(3),
for fresh consideration of the V-V. _
accordance with law the _-
obscxvafions made
judgment. ‘
%9;f3″d9°