Case Number: ITA 5674/DEL/2019
Appellant: Dialmaz Exports, New Delhi
Respondent: ACIT Special Range-18, New Delhi
Assessment Year: 2016-17
Case Filed On: 2019-06-28
Order Type: Final Tribunal Order
Date of Order: 2019-09-30
Pronounced On: 2019-09-30
This case involves an appeal filed by Dialmaz Exports, New Delhi (the appellant) against the Additional Commissioner of Income Tax (ACIT), Special Range-18, New Delhi (the respondent). The appeal pertains to the assessment year 2016-17 and was filed on 2019-06-28. The case was heard by the Income Tax Appellate Tribunal (ITAT), Delhi Benches “B”, New Delhi.
The appellant, Dialmaz Exports, New Delhi, brought this case against the ACIT Special Range-18, New Delhi. The dispute involved the valuation of rejected diamonds and the resultant tax implications for the assessment year 2016-17. The matter was heard by the ITAT on 25th April 2023, and the order was pronounced on 27th June 2023.
The appeal was directed against the order of the learned CIT(A)-18, New Delhi, dated 05.01.2019, which involved the confirmation of an addition made by the Assessing Officer (AO) on account of alleged undervaluation of closing stock of rejected diamonds.
The appellant, represented by Shri Gaurav Jain, Adv., Shri Ridhi Karan Agarwal, CA, and Shri Sudarshan Roy, Adv., argued that the CIT(A) erred in law and on facts in confirming the addition of Rs. 35,19,645/- out of the total addition of Rs. 1,66,41,429/- made by the AO. The contention was based on the valuation of 485 carats of rejected diamonds at an average rate of Rs. 12,257/- per carat against the market price of such rejected diamonds, which was Rs. 5,000/- per carat.
The respondent, represented by Ms. Maimun Alam, Sr. DR, argued that the tax effect involved in the grounds raised by the Revenue is below Rs. 50 lakhs. Therefore, in view of the recent CBDT Circular No.17/2019 dated 8th August 2019, raising the monetary limit for filing of the appeal by the Revenue before the Tribunal to Rs. 50 lakhs, the appeal filed by the Revenue is not maintainable.
The Tribunal, comprising Judicial Member Shri Chandra Mohan Garg and Accountant Member Shri M. Balaganesh, reviewed the contentions of both parties. The Tribunal found that the tax effect involved in the grounds raised by the Revenue is indeed below Rs. 50 lakhs. Therefore, in view of the CBDT Circular No.17/2019 dated 8th August 2019, the appeal filed by the Revenue is not maintainable and was accordingly dismissed.
Regarding the appellant’s appeal, the Tribunal noted that the sole grievance revolved around the action of the AO in making an addition of Rs. 1,66,41,429/- and the partial confirmation of this addition by the CIT(A). The appellant’s counsel submitted additional evidence, including a valuation report and sale invoice for the rejected diamonds, which were not available during the assessment and first appellate proceedings.
The Tribunal admitted the additional evidence submitted by the appellant, noting that the evidence was relevant and self-explanatory regarding the appellant’s valuation of the rejected diamonds. The Tribunal restored the matter to the file of the AO for fresh adjudication, directing the AO to re-evaluate the issue of the part addition after allowing due opportunity of hearing to the appellant and without being influenced by the earlier assessment and first appellate order.
In conclusion, the appeal filed by the Revenue was dismissed on account of low tax effect as per CBDT Circular No. 17/2019. The appellant’s appeal was allowed for statistical purposes, with the matter being restored to the file of the AO for fresh adjudication regarding the valuation of the rejected diamonds.
Order pronounced in the open court on 27th June 2023.
Signed by:
(M. BALAGANESH) ACCOUNTANT MEMBER
(CHANDRA MOHAN GARG) JUDICIAL MEMBER
Date: 27th June 2023
Copy forwarded to:
// BY Order //
Assistant Registrar, ITAT, New Delhi Benches, New Delhi
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform