PRINCIPAL COMMISSIONER OF INCOME TAX 5 vs. KALYANBHAI K. PATEL

TAXAP/888/2018HC GujaratGJHC24011205201821 August 2018Author: HONOURABLE MR. JUSTICE AKIL KURESHI,HONOURABLE MR. JUSTICE B.N. KARIA3 pages
AI SummaryDismissed

What were the facts?

The Revenue is in appeal against the Income Tax Appellate Tribunal's order dated May 25, 2017. The appeal concerns assessment years 1995-96, 1996-97, and 1997-98. The Tribunal had deleted additions made by the Assessing Officer and confirmed by the CIT(A) on account of undisclosed investments and cash credits. These deletions were based on disclosures made by firms, in which the assessee held a share, before the Settlement Commission. The Settlement Commission applications of these firms had abated under Section 245HA of the Income Tax Act. The appeal also pertains to a restricted addition concerning undisclosed investment in Jayesh School Land.

What did the High Court hold?

The High Court held that no substantial question of law arises from the order of the Income Tax Appellate Tribunal. The Court noted that the Tribunal had deleted additions concerning undisclosed investments and cash credits by correlating them to disclosures made by firms before the Settlement Commission. The Court also observed that the remaining three issues were purely fact-based, and the CIT(A) and the Tribunal had concurrently concluded that the Assessing Officer had wrongly made the additions. The Court did not delve into the merits of the specific additions or the impact of the abatement of the Settlement Commission applications, focusing instead on the absence of a substantial question of law. Consequently, the Tax Appeal was dismissed.

What were the issues?

1. Whether the Appellate Tribunal was right in law and facts in upholding the CIT(A)'s decision to delete additions of Rs. 76,000 for AY 1995-96, Rs. 22,74,000 for AY 1996-97, and Rs. 8,17,191 for AY 1997-98 on account of undisclosed investment, by allowing credit of disclosures made by the firm M/s. Shyam Builders before the Settlement Commission, despite the firm's application abating under Section 245HA of the Act? 2. Whether the Appellate Tribunal was right in law and facts in upholding the CIT(A)'s decision to restrict the addition of Rs. 8,00,000 to Rs. 1,00,000 on account of undisclosed investment in Jayesh School Land, without considering seized material, statement recorded under Section 131(1A), and a civil suit filed by the seller? 3. Whether the Appellate Tribunal was right in law and facts in upholding the CIT(A)'s decision to delete additions of Rs. 25,50,000 on account of undisclosed cash credit, by considering the peak credit offered before the Settlement Commission in the case of M/s. Shyam Builders, despite the firm's application abating under Section 245HA and no order under Section 245D(4) being passed? 4. Whether the Appellate Tribunal was right in law and facts in upholding the CIT(A)'s decision by allowing credit of disclosure made by the firm M/s. Shyam Construction Co. before the Settlement Commission, despite the firm's application abating under Section 245HA of the Act? Assessee's Contentions: Not recorded. Revenue's Contentions: The Revenue argued that the Tribunal erred in allowing credit for disclosures made before the Settlement Commission when the applications had abated under Section 245HA. For issue B, the Revenue contended that the addition was based on seized material, statements under Section 131(1A), and a civil suit, which the Tribunal allegedly did not consider properly.

Which sections of the Income-tax Act were involved?

Section 245HA,Section 245D(4),Section 131(1A)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/TAXAP/888/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 888 of 2018 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX 5 Versus KALYANBHAI K. PATEL ========================================================== Appearance: MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MR.JUSTICE B.N. KARIA Date : 21/08/2018

ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI)

1.

Revenue is in appeal against the judgment of the Income   Tax   Appellate   Tribunal   dated   25.05.2017 raising following questions for our consideration: “[A] Whether   the   Appellate   Tribunal   was right in law and on facts in upholding the decision   of   the   CIT(A)   and   deleted   the addition   of   Rs.76,000/­   for   A.Y.   1995­96 Rs.22,74,000/­   in   A.Y.   1996­97   and Rs.8,17,191/­ for A.Y. 1997­98 on account of undisclosed investment by allowing credit of disclosure   made   in

The order continues below.

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