IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 899 of 2011 For Approval and Signature:
HONOURABLE MR.JUSTICE V. M. SAHAI HONOURABLE MR.JUSTICE N.V. ANJARIA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
========================================================= COMMISSIONER OF INCOME TAX-24 MUMBAI - Appellant(s) Versus AHMED ALIJI NANDOLIYA - Opponent(s) ========================================================= Appearance :
MRS MAUNA M BHATT for Appellant(s) : 1, None for Opponent(s) : 1, =========================================================
CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI
and HONOURABLE MR.JUSTICE N.V. ANJARIA Date : 21/06/2012 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE N.V. ANJARIA) The Revenue has preferred the present appeal under section 260A of the Income Tax Act, 1961 to challenge the order dated 18.05.2007 of the Income Tax Appellate Tribunal, Ahmedabad Bench ‘B’ in IT(SS) No.308/Ahd/2003, proposing the following questions formulated in the memorandum of appeal as substantial questions of law.
“[A] Whether on the facts and circumstances of the case and in law, the Tribunal erred in directing the Assessing Officer to take income from cattle farming business at Rs.6,60,000/- as against Rs.95,27,824/- determined in the block assessment on the basis of admission by the assessee in statement recorded u/s 132(4) of the Income Tax Act.”
“[B] Whether on the facts and circumstances of the case impugned order dated 18/05/2007 the Hon'ble Tribunal was perverse on facts?”
2. We have heard learned advocate Ms. Mauna Bhatt for the appellant.
We have also gone through the impugned order and the relevant material on record.
3. Summarizing the relevant facts involved in the appeal with reference to which the aforementioned questions are formulated, the Assessing Officer made addition of Rs.95,27,824/- as undisclosed profit in the income of the respondent-assessee, who was engaged in dairy business and business of cattle breeding, for the block period of 1.4.1991 to 9.1.2001. The addition was on the basis of information gathered during search operation carried out under section 132 of the Act. Relying on the statement of the assessee under section 132(4), the Assessing Officer estimated the net monthly income at Rs.73,666/- on the basis that according to assessee on an average 35 buffalos were brought every month at his farm. The Assessing Officer did not accept the explanation of the assessee that buffalos were at the farm and kept until they become ready for giving milk and the lactation period being 5-6 months, on an average 200 to 250 buffalos were maintained every month at the farm rotated in their lactation period, and that he was getting Rs.20,000/- for a lot of seven buffalos, which was Rs.2,500/- per buffalo and which amount was inclusive of the expenses for fodder, etc. According to the Assessing Officer, the assessee had shown his income on lower side and was not maintaining the books of accounts.
3.1. The Commissioner (Appeals) while dealing with the assessee’s appeal accepted the estimation of Assessing Officer that he was right in working out the income and expenditure in respect of 35 buffalos for arriving at the net monthly income. At the same time, according to the Commissioner, the Assessing Officer overlooked that the buffalos were brought for maintenance for limited period and they were made to stay during their lactation period for 5-6 months. However, upon considering the facts, the Commissioner put his own estimation for the entire block period determining the income at Rs.3,50,000/-. He accordingly confirmed the addition to the extent of Rs.3,50,000/- and the balance addition of Rs.91,77,824/- was deleted.
3.2 The Revenue went in appeal before the Income Tax Appellate Tribunal.
The Tribunal considered the issue whether restricting the addition of Rs.95,27,824/- to Rs.3,50,000/- by the Commissioner was justified. After taking into account the order of the Assessing Officer and that of the Appellate Commissioner, the Tribunal recorded its own findings as under:
“This is an admitted fact that the assessee was not maintaining any books of account. In reply to question No.9 as reproduced hereinabove in the brief facts the assessee had admitted that he got cash receipt of Rs.1 lac to 1.25 lac per month and against which the assessee has to incur the following expenses-labour wages for 20 workers @ Rs.1,200/- per month, fodder expenses @ Rs.500/- per buffalo per month including electricity and water charges. It was also stated that the income from cattle breeding is between Rs.70,000/- to Rs.90,000/- per month. .... In our opinion, looking to the facts of the case and respectably the fact neither the assessee has submitted any detail not any evidence has been brought on record. The statement of the assessee recorded u/s. 132(4) was not retracted by the assessee. We feel it appropriate that the income of the assessee should be estimated at Rs.40,00,000/- per month for first five years and Rs.80,000/- for the next five years and again Rs.60,000/- for 9 months up to the date of search. .... We also noted contradiction in the statement and the working of the Assessing Officer. The Assessing Officer has estimated the miscellaneous expenses @ 1500 per month while the assessee states that Rs.30,000/- to Rs.35,000/- is expenditure for cattle breeding. On that basis miscellaneous expenses are taken at Rs.30,000/-. The estimated income of the Assessing Officer @ Rs.73,666/- will also get reduced by Rs.28,500/- per month.”
4. With above observations, the Tribunal set aside the Commissioner’s order on the issue and directed the Assessing Officer to take assessee's income for the block period in question at Rs.6,60,000/-, instead of Rs.3,50,000/-.
5. In above view of the matter, there is no gainsaying that the whole issue considered by the Income Tax authorities and finally by the Tribunal was in the realm of facts. The number of buffaloes kept at the farm of the assessee and estimation of expenses and income derived therefrom and the related issues were all questions of fact. The Tribunal arrived at its own assessment and estimation on the basis of facts and figures requiring addition of Rs.6,60,000/- in the total income of the assessee. The conclusion of the Tribunal is reasonable and in no way perverse.
6. Therefore, neither of the two questions raise any question of law, much less, substantial questions of law for consideration. In absence of any substantial question of law arising, the tax appeal cannot be entertained.
7. Accordingly this appeal is dismissed.
(V.M. SAHAI, J.) (N.V. ANJARIA, J.) (SN DEVU PPS)