Ajay Kumar Mittal, J. - (1.)
(2.) DELAY in refilling is condonmed. ITA No. 316 of 2011 1.1 The assessee has filed this appeal under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 31.10.2008, Annexure A -3, passed by the Income Tax Appellate Tribunal Bench 'A', Chandigarh (in short, "the ITAT) in ITA No. 503/CHD/2004 for the assessment year 1998 -99, claiming following substantial questions of law: (i) That whether the ITAT was justified in not considering the retraction of the persons from their earlier statement when they specifically stated that their earlier statements were recorded under pressure and they were made to sign certain written pages with a threat that in case they do not do so they will be subjected to lot of litigation and other harassments. They further stated that there were no bogus sales of jewellery to M/s Zaveri Diamonds (appellant). Copies of the Retraction letters being as per Annexure A -9. Hence adverse finding of the ITAT on this count is perverse and needs intervention by this Hon'ble Court in view of various judgments on the issue of Retraction? (ii) That whether ITAT was justified in not considering the request by the appellant for supplying various documents in the form of confirmation, affidavit, valuation report and the source of acquisition of the impugned jewellery as declared by various customers before the concerned CIT under the VDIS scheme so as to give its comments on the same as these formed important evidence of sale to the appellant by the customers and in other words purchases by the appellant which declarations of these customers of the appellant having been accepted by the Income Tax Department, so that the department cannot adopt double standards to the same transaction, i.e. by accepting sale to the appellant by the customers but on the other hand not accepting the purchases by the appellant, which is against the established principles of law as even held by Hon'ble Punjab and Haryana High Court wherein it was held that surrender to be accepted in toto? (iii) That whether the ITAT was justified in not considering the fact that since the whole amount of sale by the customers having surrendered under the VDIS -1997 scheme and having paid taxes due therein and accepted by the department any further addition under any count will lead to double addition which is not warranted under any enabling provisions of the Income Tax Act, 1961? (iv) Whether, on the facts and circumstances of the case, the Tribunal was justified in reversing a well versed order of CIT(A) and thereby confirming the order of AO that no actual business of purchase or sale of jewellery was carried out by the assessee firm even when evidence in the shape of purchase bills and sales bills, bank statements, pass books through which various transactions have been done, balance sheet, trading and profit and loss account, schedule of partners capital account, quantitative details of stock, written submissions before various authorities, case laws, statement of Manoj Kumar, partner, certificate from Sarafan Bazar Association, copy of the assessment order of M/s Vishal Jewellers showing that partners of the appellant firm were in regular jewellery business have been furnished by the assessee, which findings of the ITAT being perverse needs due indulgence by this Hon'ble Court? (v) Whether, on the facts and circumstances of the case, the Tribunal was justified in confirming the action of A.O., in applying the rate of 2% commission on the purchases of Rs. 16,27,86,745/ -and making an addition of Rs. 32,55,740/ - on estimate basis by ignoring the regular books of account being duly audited by a firm of chartered accountants and is infact based on surmises and conjectures? (vi) Whether the order of the Tribunal is perverse and against the provisions of law? Brief facts as narrated in the appeal may be noticed. The appellant is a partnership firm at Ludhiana. It consists of two partners namely Sarv Shri Manoj Kumar and Vineet Kumar. It is engaged in the business of purchase and sale of diamond and gold jewellery. The Government of India had announced a Voluntary Disclosure of Income Scheme, 1997 (VDIS) whereby the declarants were allowed to declare undisclosed income/assets on payment of prescribed taxes without being liable for prosecution. The appellant filed its return of income for the assessment year 1998 -99 on 30.10.1998 declaring total income of Rs. 1,11,500/ - which was processed under Section 143(1) of the Act. A notice under Section 148 of the Act was issued to the assessee on 18.3.2002. During assessment proceedings, the Assessing Officer confronted Shri Manoj Kumar with the statements of S/Shri Sanjeev Jain, Sanjeev Goel, Shyam Lal and Prem Chand who had stated that actually no sale of jewellery was made by them to the assessee and only bills were issued by the assessee against commission. Later on these persons retracted from their statements. The Assessing Officer made the assessment at an income of Rs. 32,55,735/ - by holding that the assessee is not engaged in the business of sale and purchase of diamond jewellery and only bills were issued after getting two -three percent commission. Copy of the order dated 28.3.2003 is at Annexure A -1. The appellant filed an appeal before the Commissioner of Income Tax (Appeals) [in short "the CIT(A)"] against the said order which was partly allowed vide order dated 6.1.2004, Annexure A -2. Aggrieved by the order passed by the CIT(A), the revenue filed an appeal before the ITAT which was allowed vide order dated 31.10.2008, Annexure A -3. Hence this appeal by the assessee. Learned counsel for the appellant submitted that the persons who had made statements had declared the jewellery under the VDIS scheme and the said statements were later on retracted in as much as it was stated by all of them that the earlier statements were recorded under coercion and duress. In the light of the same, no addition could have been made to the income disclosed by the assessee.
(3.) AFTER giving thoughtful consideration to the submissions made by learned counsel for the appellant, we do not find any merit in the appeal.;