(Per : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Revenue is in appeal against the judgement of the Tribunal dated 19.12.2008, raising the following questions for our consideration :
“[A] Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT (A) deleting addition of Rs.22,00,000/- made in respect of cash found during the course of search, on the basis of the provisions of section 292-C of the Act?
[B] Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs.3,43,20,956/- made in respect of unaccounted investments in property?
[C] Whether the Appellate Tribunal is right in law and on facts in deleting the addition made on account of unaccounted profit on sale of land situated at Chekhla?
[D] Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT (A) deleting addition of Rs.46,00,000/- being the unexplained investment in deposit with M/s L. T. Shroff?
[E] Whether the Appellate Tribunal is right in law and on facts in deleting the addition made on account of unexplained investment in petrol pumps?
[F] Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT (A) deleting the addition made on account of unexplained capital introduced in various petrol pumps?
[G] Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs.4,38,81,688/- made in respect of unaccounted sales?”
2. Question “A” pertains to addition of Rs.22 lakhs made by the Assessing Officer in respect of cash found during the course of search, on the basis of the provisions of section 292- C of the Income Tax Act, 1961 (hereinafter to be referred to as “the Act”). CIT (Appeals) deleted such addition upon which, the revenue approached the Tribunal. The Tribunal upheld the order of CIT (Appeals) observing that the findings of CIT (Appeals) are based on appreciation of facts. The presumption under section 292-C of the Act was not to be applied in view of the fact that the assessee had succeeded to rebut the same by leading evidence on record. The Tribunal, therefore, observed that once this was done, the revenue could not have relied simply on the presumption without bring any evidence on record. The Tribunal noted that that CIT (Appeals) had deleted the addition by considering the cash as belonging to the company.
3. Upon perusal of the orders on record, we are of the opinion that the entire issue is based on appreciation of evidence. When CIT (Appeals) as well as the Tribunal on the basis of the evidence on record, came to the conclusion that no addition could be made in the hands of the assessee, we do not find any question of law arises in this respect.
4. With respect to question “B”, in connected appeal of the revenue being Tax Appeal No.113 of 2010, we have dealt with the issue and found that insofar as the order of CIT (Appeals) by which the revenue was aggrieved, no interference is called for. We may note that insofar as the assessee's appeal against the CIT (Appeal)'s decision is concerned, which was allowed by the Tribunal, we have separately considered such question in revenue's Tax Appeal No.113 of 2010. Our observations with respect to this issue are as under :
“2. With respect to question “A”, we find that the Assessing Officer made the addition of Rs.3.43 crores (rounded off) in respect of unaccounted investment made by the assessee in the properties during the block period under consideration. CIT (Appeals), however, in the appeal filed by the assessee, reduced such amount to Rs.25.86 lakhs (rounded off to Rs.26 lakhs). Both the sides carried the issue in further appeal before the Tribunal. The Tribunal allowed the assessee's appeal in part and rejected the revenue's.
3. Having heard the learned counsel for the parties, we notice that CIT (Appeals) had given detailed reasons for reducing the unexplained investment from Rs.3.13 crores which was adopted by the Assessing Officer to Rs.3.15 lakhs. He thereafter calculated investments made in different lands by the assessee and thereby, came to a final figure of Rs.25.86 lakhs (rounded off to Rs.26 lakhs). The discussion of CIT (Appeals) and the materials on record would convince us that the entire issue is based on appreciation of the evidence on record. To the extent the CIT (Appeals) reduced the addition to Rs.26 lakhs, in our opinion, therefore, no question of law arises. CIT (Appeals) noted certain duplications and also gave cogent reasons for reducing the additions made by the Assessing Officer.”
5. Insofar as question “D” is concerned, we noticed that the addition of Rs.46 lakhs made by the Assessing Officer towards unexplained investment in deposit with M/s L. T. Shroff, CIT (Appeals) as well as the Tribunal both found that there was insufficient evidence to sustain such addition. The Tribunal while upholding CIT (Appeals)'s view, held that the Assessing Officer wrongly added three zeros in the entries made in the passbook. The entire issue is based on appreciation of evidence. CIT (Appeals) as well as the Tribunal having concurrently found that the addition was not justified, no question of law arises for our consideration.
6. With respect to questions “E” and “F”, we have considered such issue in revenue's Tax Appeal No.113 of 2010 in following manner :
“10. With respect to question “C”, issue arises out of the Assessing Officer's addition of Rs.75 lakhs. The assessee carried the matter in appeal. CIT (Appeals) retained only Rs.1,50,000/- under such head. Both the sides carried the issue in further appeal. The Tribunal deleted even the limited addition sustained by CIT (Appeals).
11. From the documents on record and in particular, the discussion of the Tribunal on the issue, it clearly emerges that the entire issue is purely factual in nature. The Tribunal was of the opinion that the investment in the petrol pumps as well as lands was in the names of Shri V.
K. Bhatia and Shri Poonam Gadhavi. The document showing such investment was also seized from Shri Poonam Gadhavi and was with respect to account of Shri Gadhavi. The document did not show the assessee's investment. The Tribunal further observed that even the addition of Rs.1.50 lakhs sustained by CIT (Appeals) was not justified since the revenue could not show that the assessee was partner in the petrol pumps business.
12. From the above discussion, it can be gathered that the Tribunal on the basis of the evidence, found that the Assessing Officer erred in making the addition. According to the Tribunal, even CIT (Appeals) to the limited extent he retained the addition, erred in appreciating the evidence on record. The entire issue being purely factual in nature, in our view, no question of law arises.”
6.1 Such questions are also, therefore, not required to be considered.
7. With respect to question “G”, we have dealt with the same in revenue's Tax Appeal No.113 of 2010 in the following manner :
“13. Question “D” pertains to addition of Rs.4.38 crores (rounded off) made by the Assessing Officer. Such addition was deleted by CIT (Appeals) on the ground that the transactions pertain to the business of the assessee and that out of such transactions, profit element of Rs.1.10 crores alone could be sustained. Such business being jointly carried on, the profit was equally divided between two partners. It was this view that the Tribunal upheld. The Tribunal concluded that looking to the documents as well as the nature of receipts, the same must be held to be on account of business transactions and therefore, the revenue authorities were justified in considering the receipts as business turnover. The Tribunal also upheld CIT (Appeals)'s decoding of the documents. However, looking to the totality of the facts and circumstances, the Tribunal agreed that the assessee's contention that the transactions are business transactions and that, therefore, only the profit element embedded in such transactions should be charged to tax.
14. CIT (Appeals) as well as the Tribunal having given cogent reasons and having taxed income element of such transactions properly as business transactions, no question of law arises.”
8. In the result, tax appeal is dismissed.
[AKIL KURESHI, J.] [HARSHA DEVANI, J.] parmar*