IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 523 of 2012 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 ?
Whether this case involves a substantial question 4 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 - Appellant(s) Versus ARIF AHMED NANDOLIA - 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 : 01/08/2012 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE N.V. ANJARIA) This appeal is preferred by the Revenue under section 260A of the Income Tax Act, 1961, and is directed against the order dated 31.10.2007 in IT(SS)A.No.280 of 2003 passed by the Income Tax Appellate Tribunal, Ahmedabad `C' Bench, Ahmedabad.
1.1 Following questions are raised by the appellant proposing them as substantial questions of law.
“1. Whether on the facts and circumstances of the case and in law, the Tribunal erred in deleting the addition made on account of sale of milk?
2. Whether on the facts and circumstances of the case and in law, the Tribunal erred in deciding the issue in favour of the assessee where the determination of quantity of sale of milk and sale price of milk per buffalo contemplated by the Assessing Officer was not disputed by the assessee as well as at the time of assessment proceedings?”
2. We heard learned advocate Mrs. Mauna Bhatt for the appellant.
3. A search under section 132 of the Income Tax Act, 1961 (hereinafter referred to as `the Act' for sake of brevity) was carried out at different premises of one Nandoliya group. The premises was occupied jointly by the assessee and his other brothers,. It was a large cattle shed where 242 cattle were maintained. The respondent-assessee was the owner of 45 buffaloes. The ownership of other buffaloes was divided between the firm M/s. Ahmed Aliji & Co. and one Ismail Aliji Nandoliya. The block assessment was undertaken under section 158BC of the Act for the period of 01.04.1991 to 09.10.2001. The Assessing Officer worked out the details of average sale of milk per buffalo and the income from sale of milk per liter after calculating the figures of yield of milk from the buffaloes by relying on the assessee's statement. On the basis that the assessee had 45 buffaloes and on an average one buffalo was giving 6 to 6.15 liters of milk per day, the Assessing Officer determined the operating profit earned per year at Rs.42,87,566/- and finally declared the undisclosed income for the block period at Rs.1,16,34,920/-. The said amount was added in total income towards sale of milk in the assessment order dated 24.01.2003.
3.1 The assessee challenged the said order before the Commissioner of Income Tax (Appeals), who allowed the appeal by his order dated 10.04.2003. For deleting the addition in question the CIT(A) was of the view that no material whatsoever was seized or found from the assessee and therefore no unaccounted income from sale of milk was established. It was observed that the assessee was filing returns of income regularly showing the income earned from his dairy business. The CIT(A) noticed that the Assessing Officer had made addition on the basis of material seized in case of some other person by merely applying the figures noted therein which pertained to the third person. Against the aforesaid order of CIT(A), the Revenue preferred appeal before the Income Tax Appellate Tribunal which culminated into the impugned order.
3.2. The Tribunal considered the facts and the material before it and held that the issue involved was already decided its decision in SCIT vs. Nandoliya Ismail Aliji in IT(SS) A. No.278 of 2003. The Department appearing through its representative fairly conceded before the Tribunal that the issue was covered against the Revenue by the said decision. The Assessing Officer in working out the sale of the milk in assessee's case relied on the details of sale of milk contained in the register which was seized but which belonged to third party one Mohamad Aliji Nandoliya. Thus the gross sales figures worked out for assessee was purely on estimation. The Tribunal duly considered the fact that CIT(A) deleted the addition by holding that it was made by relying on the register containing the details of milk which was seized from Mohamad Aliji Nandoliya.
4. No material was found from the assessee to establish any unaccounted income from the sale of milk, the Tribunal observed as under.
“The only basis of addition was the statement of the assessee recorded u/s.132(4) of the Act during the course of search that he was doing the business of dairy since last 8 years. The Annexure seized by the Income – tax department pertains to Mohamed Aliji Nandoliya and not to the assessee.
The learned CIT(A) further found Assessing Officer has not even established with any evidence that the income shown by the assessee in regular return of income from dairy business prior to the date of search is understated. He further held that the addition of undisclosed income in the block period has to be determined on the basis of material and evidence found as a result of search and the material evidence found in the case of some other person cannot be against the assessee unless it is established that it also pertains assessee.”
5. The Tribunal was justified in reaching the aforesaid findings in asmuch as no addition could have been made in the income of the assessee on the basis of the material which was neither belong to him nor recovered from his possession. Moreover, in case of joint occupant Nandoliya Ismail Aliji, who was in same dairy business with the assessee, the Tribunal had deleted the addition. Ismail Aliji's case was at par with the present respondent because in his case also, the addition were made by the Assessing Officer by relying on details in same register of above referred Mohamad Aliji. The cases of the assessee and said Ismail Aliji Nandoliya were identical and there were no distinguishing features pointed out.
6. Thus, the Tribunal arrived at the correct finding on appreciation of facts and material before it. They were the finding of fact properly arrived at. As the impugned order records finding of fact, no substantial question of arises for consideration.
7. Accordingly, the Tax Appeal is dismissed.
(V.M. SAHAI, J.) (N.V. ANJARIA, J.) (SN DEVU PPS)