THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY and THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM
I.T.T.A. No.300 of 2003
% 12.11.2014
Between:
# Commissioner of Income Tax, Hyderabad.
Versus $ Shri Rameshwarlal Gehlot.
< Gist:
> Head Note:
! COUNSEL FOR THE APPELLANT :- Sri S.R.Ashok ^COUNSEL FOR RESPONDENT :- Sri Dwarakanath ? Cases Referred:
... APPELLANT ...RESPONDENT HON’BLE SRI JUSTICE L. NARASIMHA REDDY AND HON’BLE SRI JUSTICE CHALLA KODANDA RAM
I.T.T.A No.300 of 2003
JUDGMENT:- (Per Hon’ble Sri Justice L.Narasimha Reddy)
The respondent is a proprietor of M/s.Bhagawathi Enterprises, which is mainly a dealer in groundnut seeds. For the assessment year 1989-90, the returns were submitted on 06.09.89. A sum of Rs.50,000/- was shown as total income. A search was conducted on 18.08.1989 under Section 132 of the Income Tax Act (for short ‘the Act’). Based upon the facts and figures gathered therein, an order of assessment was passed on 31.03.1992. The taxable income of a fairly high order was shown in the order of assessment. The respondent filed an appeal before the Commissioner of Appeals. The appeal was allowed and the order of assessment was set aside mainly on the ground that adequate opportunity was not given to the respondent. The matter was remanded for fresh consideration and disposal. On remand, the Assessing Officer issued a notice under Section 143(2) of the Act. An order of assessment was passed on 25.03.1995. It was shown that the respondent has the income of Rs.24,70,520/-
. Major item shown therein was the one from other sources, being Rs.17,23,400/-.
Mostly feeling aggrieved by the inclusion of the amount of Rs.17,23,400/-, the respondent filed appeal before the Commissioner of Appeals. Through order, dated 29.02.1996, the Commissioner dismissed the appeal. Thereupon, the respondent filed I.T.A.No.917 of 1996 before the Hyderabad Bench “A” of the Income Tax Appellate Tribunal. The said appeal together with two similar appeals referable to subsequent assessment years were allowed by the Tribunal through its order, dated 30.09.2002. Hence, this appeal under Section 260A of the Act.
Heard Sri S.R.Ashok, learned Senior Standing Counsel for the appellant and Sri S.Dwarakanath, learned counsel for the respondent.
The following questions of law are canvassed before this Court:
1. Whether the Appellate Tribunal is justified in deleting the addition made on account of undisclosed investment to the tune of Rs.17,23,400/-?
2. Whether on the facts and in the circumstances of the case, the finding of the Appellate Tribunal that estimate of 3% of sales turnover, should result in deletion made on account of unaccounted investment is sustainable in law and at any rate whether it is based on material on record?
3. (a) Whether the Appellate Tribunal is justified in deleting the addition made on the aforesaid account even in the absence of a finding that the sales are referable to the accounted for purchases of groundnut seeds?
(b) Whether the findings of the Appellate Tribunal in this behalf are based on material on record?
The controversy is about a sum of Rs.17,23,400/-. In the books of account, the said amount was not reflected. The source of information for the Assessing Officer was the statement recorded under Section 132(4) of the Act. The respondent pleaded that the groundnut seeds worth Rs.17,23,400/- was purchased on credit and in that view of the matter, no entries were made in the books of account. The Assessing Officer as well as the Commissioner of Appeals took the view that once the transaction involving such huge amount has taken place, it ought to have been reflected in one form or the other in the books of account and non-disclosure of the same would enable them to treat it as unexplained investment.
The Tribunal took the view that the purchase of groundnut of the value of Rs.17,23,400/- is part of Rs.30,80,270/- for the assessment years 1989-90 and 1990-91, which was treated as unexplained income and the said amount cannot be the subject matter of the taxation for the second time.
Learned counsel for the appellant is not able to point out that the reason assigned by the Tribunal is not factually correct. Once it emerges that the amount of Rs.17,23,400/- is nothing but part of larger figure, which was brought under the purview of the Act, there was no basis for inclusion of the same in a different assessment year. At any rate, the finding of the Tribunal was just on pure appreciation of facts and no question of law arises for consideration.
The appeal is accordingly dismissed. There shall be no order as to costs.
Miscellaneous petitions, if any, filed in this appeal shall also stand disposed of.
L. NARASIMHA REDDY, J CHALLA KODANDA RAM, J Date:12.11.2014
Note: L.R. copy to be marked. kdl