M/S BHAGWAN DAS BRIJENDRA SINGH and PARTY vs. C I T ALWAR

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 35 / 2016 M/S Bhagwan Das Brijendra Singh & Party R/o Basan Gate, Bharatpur. Through its Partner Man Singh S/o Shri Kishan Lal ----Appellant Versus

D.B. Income Tax Appeal No. 163 / 2014 Commissioner of Income Tax, Jaipur-II, Jaipur ----Appellant

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Versus M/S Banna Ali Girdhari Singh & Party (Nawalgarh Group). C-23, Malkhera House, Vijay Vihar Colony, Nayakhera, Amba Bari, Jaipur ----Respondent D.B. Income Tax Appeal No. 164 / 2014 Commissioner of Income Tax, Jaipur-II, Jaipur ----Appellant Versus M/S Banna Ali Girdhari Singh & Party (Chirawa Group). C-23, Malkhera House, Vijay Vihar Colony, Nayakhera, Amba Bari, Jaipur

----Respondent D.B. Income Tax Appeal No. 165 / 2014 Commissioner of Income Tax, Jaipur-II, Jaipur ----Appellant Versus M/S Banna Ali Girdhari Singh & Party (Khetri Group). C-23, Malkhera House, Vijay Vihar Colony, Nayakhera, Amba Bari, Jaipur

----Respondent D.B. Income Tax Appeal No. 167 / 2014 Commissioner of Income Tax, Jaipur-II, Jaipur ----Appellant Versus M/S Sunil Khan & Party B-18, Lal Kothi, Behind Laxmi Mandir, Jaipur ----Respondent D.B. Income Tax Appeal No. 168/ 2014 Commissioner of Income Tax, Jaipur-II, Jaipur ----Appellant Versus

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M/S Balaji Wines, SB-51, Ganesh Marg, Jaipur ----Respondent D.B. Income Tax Appeal No. 194 / 2015 Commissioner of Income Tax, Jaipur-II, Jaipur ----Appellant Versus M/S Vijaypal Om Prakash And Party, House No. 596 2nd Sector, Malviya Nagar, Jaipur. ----Respondent D.B. Income Tax Appeal No. 201 / 2015 Commissioner of Income Tax, Jaipur-II, Jaipur ----Appellant Versus M/S N M & Party (Balaji Wines) C-29, Tilsiyan Bhawan, B.D. Road, Jaipur ----Respondent D.B. Income Tax Appeal No. 5 / 2016 Principal Commissioner Of I T Jaipur-Ii ----Appellant Versus M/S Rajaram And Party, C-82, Prithvi Raj Road, C-Scheme, Jaipur ----Respondent D.B. Income Tax Appeal No. 6 / 2016 Pr. Commissioner of Income Tax, Jaipur-II, Jaipur ----Appellant Versus M/S Babudeen And Party H.NO. 596, Sector-II Malviya Nagar Jaipur ----Respondent D.B. Income Tax Appeal No. 28 / 2016 Principal Commissioner of Income Tax-I, New Central Revenue

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Building, Statute Circle, Jaipur ----Appellant Versus Habib Mohd Raju Khan And Party D-90, Meera Marg, Banipark, Jaipur ----Respondent D.B. Income Tax Appeal No. 36 / 2016 M/S Habib Mohd Raju Khan And Party D-90, Meera Marg, Banipark, jaipur through its member Shri Badruddin S/o Sh. Mangi Lal Ji aged 64 years approx. by caste Mohmddan ----Appellant Versus

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----Respondent D.B. Income Tax Appeal No. 42 / 2016 M/S Babudeen And Party H.No. 596, Sector-II Malviya Nagar Jaipur through its member Shri Babudeen S/o Shri Hakam Ali aged 51 years approx. by caste Mohmddan ----Appellant Versus

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----Respondent D.B. Income Tax Appeal No. 159 / 2014 Commissioner Of Income Tax Jaipur -I, New Central Revenue Building, Statue Circle, Jaipur ----Appellant Versus Birbalram Rajendra Poonia & Party, A-51, Hanuman Nagar, Khatipura, Jaipur ----Respondent D.B. Income Tax Appeal No. 30 / 2016 Pr. Commissioner Of Income Tax Jaipur -I, New Central Revenue Building, Statue Circle, Jaipur ----Appellant Versus Habib Mohd. Raju Khan & Party, D-90, Banipark, Jaipur ----Respondent D.B.

Income

Tax

Appeal

No.

31/2016 Commissioner Of Income Tax Jaipur -I, New Central Revenue Building, Statue Circle, Jaipur ----Appellant Versus M/s Bhanwar Ali Habib Mohd. & Party. D-90, Meera Marg, Banipark,Jaipur ----Respondent D.B. Income Tax Appeal No. 160 / 2014 M/s Birbalram Ramchandra & Party (Laxmangarh Group) A-51, Hamuman Nagar, Khatipura, Jaipur through its member Shri Bhagirath Punia S/o Shri Godhu Ram Punia, aged 67 years, approx. by caste Punia. Versus

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_____________________________________________________ For Appellant(s) : Mr. Prateek Kedawat for Mr. R.B. Mathur, Mr. Anuroop Singhi (appellant in appeal no. 28/2016, 159/2014, 30/2016, 31/2016), Mr. Naresh Gupta For Respondent(s) : Mr. P.K. Kasliwal (Appellant in Appeal No. 35/2016), Mr. Naresh Gupta (respondent in appeal no. 30/2016, 31/2016), Mr. Anil Mehta in appeal no. 160/2014 _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH 21/08/2017 All the appeals arise out of the order of the Tribunal whereby the Tribunal in spite of the remand by the High Court has not adjudicated the issue properly. Counsel for the appellant has framed the following question of law:- In DBITA No. 35/2016 “i) Whether on the facts and in the circumstances of the case, the order passed by the learned Income Tax Appellate Tribunal is not perverse, arbitrary and contrary to material on record considering the fact that only the case of the appellant was remanded and not of the revenue which was not in appeal and the Tribunal decided both the appeals? ii) Whether, it is implicit under the provisions of Section 145(2) of the Act, 1961 to make some additions on quess or estimation basis when there is no material to support that assessee has earned higher income and under these circumstance whether the trading additions of Rs. 4,00,000/- was justified when the same was not supported by any material on record? iii) Whether power exercised by the Tribunal can not be said in excess of jurisdiction, who enhanced the addition from Rs. 2,00,000/- to Rs. 4,00,000/- which was disputed in appeal before the High Court, such conclusion is legally sustainable? iv) Whether in appellate proceedings, the case of the appellant can be put in worse position then the relief

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claimed by the appellant as done by the Tribunal while sustaining the addition from Rs. 2,00,000/- to Rs. 4,00,000/-? v) Whether, the Tribunal has power to enhance the addition that too without notice to the appellant from Rs. 2,00,00 to Rs. 4,00,000/- and such conclusion is legally sustainable? In DBITA No. 44/2016 i) Whether in the facts and circumstances of the case the ITAT and CIT(A) were justified in law in restricting the additions without assigning any reasons when the invoking of the provisions of section 145 of the Act has been upheld? ii) Whether in the facts and circumstances of the case, the ITAT has not acted perversely in reducing and restricting the trading additions without assigning any reasons and making estimation over estimation? iii) Whether in the facts and circumstances of the case, the ITAT and CIT(A) has not acted perversely in reducing and restricting the trading additions which were based upon the proper inquiry and after considering the explanation of the assessee and invoking the provisions of section 145 of the Act? iv) Whether in the facts and circumstances of the case, the ITAT was justified in law in allowing relief of Rs. 7,32,55,512/- out of business income determined by the Assessing Officer. v) Whether in the facts and circumstances of the case, the decision of the ITAT is perverse.” In DBITA No. 161/2014 case and in law the Hon’ble ITAT is justified in confirming the order of the CIT(A) allowing relief of Rs. 64,49,168/- out of trading addition of Rs. 74,49,168 without any basis despite the fact that the rejection of books of accounts was yupheld?

case and in law the Hon’ble ITAT is justified in law in confirming the order of the CIT(A) allowing relief out of trading addition when the Assessing Officer has given cogent reason for making the addition based upon the comparable cases?” In DBITA No. 162/2014 I) Whether on the facts and in the circumstances of the case and in law the Hon’ble ITAT is right in confirming the order of the CIT(A) upholding

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addition of Rs. 5,00,000/- in an arbitrary and presumptive manner out of total addition of Rs. 97,35,215/-?

case and in law the Hon’ble ITAT is right in confirming the order of the CIT(A) allowing relief of Rs. 92,35,215/- when the addition of Rs. 97,35,2015/- to the trading results was made by the Assessing Officer on a relevant basis i.e. applying net profit rate @ 1.35% on the sales shown by the assessee. iii) Whether on the facts and in the circumstances of the case and in law the order of the ITAT is not addition of Rs. 5,00,000/- to the trading result sustained by the CIT(A) has been given by the ITAT in their order?” In DBITA No. 163/2014 case and in law the Hon’ble ITAT has erred in law has not acted perversely in confirming the order of the CIT(A) allowing relief of Rs. 1,30,57,175/- out of trading addition of Rs. 1,36,57,180/- without giving any reason despite of the fact that the rejection of books of accounts were upheld.

case and in law the ITAT has erred in law in confirming the order of the CIT(A) allowing relief out of trading addition when the Assessing Officer has given cogent reason for making the addition based upon the comparable cases.” In DBITA No. 164/2014 cae and in law the Hon’ble ITAT has erred in law has not acted perversely in confirming the order of the CIT(A) allowing relief of Rs. 1,67,39,661/- out of trading addition of Rs. 1,79,39,661/- without giving any reason despite of the fact that the rejection of books of accounts were upheld.

case and in law the ITAT has erred in law in out of trading addition when the Assessing Officer has given cogent reason for making the addition based upon the comparable cases.” In DBITA No. 165/2014 cae and in law the Hon’ble ITAT has erred in law has not acted perversely in confirming the order of the CIT(A) allowing relief of Rs. 2,43,23,315/- out

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of trading addition of Rs. 2,52,23,000/- without giving any reason despite of the fact that the rejection of books of accounts were upheld.

case and in law the ITAT has erred in law in out of trading addition when the Assessing Officer has given cogent reason for making the addition based upon the comparable cases.” In DBITA No. 167/2014 case and in law the ITAT has right in confirming the order of the CIT(A) upholding addition of Rs. 3,00,000/- without any basis in an arbitrary and presumptive manner out of total addition of Rs. 10139853/- ii) Whether on the facts and in the circumstances of the case and in law the ITAT is right in of Rs. 9839853/- when the addition of Rs. 10139853/- to the trading results was made by the Assessing Officer on a relevant basis i.e. by ascertaining profit margin by way of survey u/s 133A in similar trade. iii) Whether on the facts and in the circumstances of the case and in law the order of the ITAT is not adhoc addition of Rs. 3,00,000/- to the trading

result sustained by the CIT(A) has been given by the ITAT in their order?” In DBITA No. 168/2014 case and in law the ITAT has right in confirming the order of the CIT(A) upholding addition of Rs. 9,00,000/- in an arbitrary and presumptive manner out of total addition of Rs. 7.75 crores.

case and in law the Hon’ble ITAT is right in of Rs. 7.66 crores when the addition of Rs. 7.75 crores to the trading results was made by the Assessing Officer on a relevant basis i.e. specific defects pointed out by him remained unexplained by the assessee. iii) Whether on the facts and in the circumstances of the case and in law the order of the ITAT is not (12 of 21) [ITA-35/2016]

addition of Rs. 9,00,000/- to the trading result sustained by the CIT(A) has been given by the ITAT in their order?” In DBITA No. 194/2015 case the ITAT was justified in law in restricting the trading addition to Rs. 1500000/- as against Rs. 11554650/- made by the Assessing Officer without assigning any reason and without considering the material on record. ii) Whether on the facts and in the circumstances of the case and in law the order of the ITAT is not addition of Rs. 15,00,000/- to the trading result sustained by the CIT(A) has been given by the ITAT in their order? iii) Whether on the facts and in the circumstances of the case the decision of the ITAT is perverse.” In DBITA No. 201/2015 “i) Whether on the facts and circumstances of the case and in law the ITAT was justified in law in restricting the trading addition to Rs.1500000/- as against Rs. 7223088/- made by the Assessing Officer without assigning any reason and without considering the material on record.

case and in law the order of the ITAT is not addition of Rs. 15,00,000/- to the trading result sustained by the CIT(A) has been given by the ITAT in their order? iii)Whether on the facts and in circumstances of the case the decision of the ITAT is perverse. In DBITA No. 5/2016 “(i) Whether in the facts and circumstances of the case the ITAT and CIT(A) were justified in law in restricting the additions without assigning any reasons when the invoking of the provisions of section 145 of the Act has been upheld? (ii) Whether in the facts and circumstances of the case, the ITAT was justified in law in sustaining trading addition of Rs.77,00,000/- only as against trading addition of Rs.3,22,72,136/- may be the Assessing officer on the basis of estimation without reasoned basis.”

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In DBITA No.6/2016 “i) Whether in the facts and circumstances of the case the ITAT & CIT(A) were justified in law in restricting the additions without assigning any reasons when the invoking of the provisions of section 145 of the Act has been upheld? ii)Whether in the facts and circumstances of the case, the ITAT has not acted perversely in reducing and restricting the trading additions without assigning any reasons and making estimation over estimation? iii)Whether in the facts and circumstances of the case, the ITAT and CIT(A) has not acted perversely in reducing and restricting the trading additions which were based upon the proper inquiry and after considering the explanation of the assessee and invoking the provisions of section 145 of the Act. iv) Whether in the facts and circumstances of the case, the ITAT was justified in estimating the assessee sale at Rs.9 crore as against Rs.10,95,14,087/- on which 10% net profit at Rs. 90.00 lacs is estimated for both the accounts i.e. country liquor and IMFL and Beer Account. v) Whether in the facts and circumstances of the case, the decision of the ITAT is perverse.” In DBITA No. 28/2016 “Whether the Tribunal was justified in ignoring the directions issued by Hon’ble High Court and findings recorded by itself, thereby on one hand observing that the assessee has failed to produce proper record and has dodged the enquiry process and resultantly upholding the rejection of books of accounts, and on the other hand, confirming the addition of only Rs.50,00,000/- without giving any justification for the same, which is much less than the addition earlier made by it in the order which was quashed by the Hon’ble High Court?” In DBITA No.36/2016 “(i) Whether the ld. I.T. Authorities below were result of necessary concomitant of the rejection of the books of account u/s. 145(3) in view of the ratio laid down by this Hon’ble Court in case of [2002] 256 ITR 243(Raj.)? (ii)Whether in the proceedings u/s. 145(3) with section 144 of the (14 of 21) [ITA-35/2016]

Act, addition of Rs.50,00,000/- made without any basis of computation as also without establishing nexus thereof with the available facts & circumstances is permissible in law? (iii) Whether the findings of the ITAT are wholly misconceived and suffered with erroneous approach in sustaining the addition against the settled principles of accounting and Accounting Standards notified by the Central Government u/s. 145(2) of the Act?” In DBITA No.37/2016 “1. ignoring the appellant’s explanation and the settled principles of law laid down by the larger bench of the Hon’ble SC in cases of CIT vs. Anwar Ali etc.?

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evidence, material and submissions available on record hence the impugned order and finding arrived at by the learned ITAT is perverse?“ In DBITA No.38/2016 laid down by this Hon’ble Court in Case of CIT Vs. Gotan Lime khanij Udhyog reported in (2002) 256 ITR 243 (Raj.)?

tax is permissible.?

the Act.?

arrived at by the learned ITAT is perverse?” In DTITA No. 42/2016 laid down by this Hon’ble Court in Case of CIT Vs. Gotan Lime khanij Udhyog reported in (2002) 256 ITR 243 (Raj.)?

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principles of law laid down by the larger bench of the Hon’ble SC in cases of CIT v. Anwar Ali reported Chandra Mittal reported in 251 ITR 9 (SC) etc.? (ii) Whether the ITAT was correct in law in sustaining the penalty u/s. 271(1)(c) of the Act on the estimated tradition addition ignoring that the basic ingredients to attract the provisions contained in Explanation-1 to section 271(1)(c) of the Act was not established on record by the revenue?” In DBITA No.46/2016 “i) Whether in the facts and circumstances of the case the ITAT & CIT(A) were justified in law in restricting the additions without assigning any reasons when the invoking of the provisions of section 145 of the Act has been upheld? ii)Whether in the facts and circumstances of the case, the ITAT has not acted perversely in reducing and restricting the trading additions without assigning any reasons and making estimation over estimation? iii)Whether in the facts and circumstances of the case, the ITAT and CIT(A) has not acted perversely in reducing and restricting the trading additions which were based upon the proper inquiry and after considering the explanation of the assessee and invoking the provisions of section 145 of the Act. iv) Whether in the facts and circumstances of the case, the ITAT was justified in law in sustaining trading addition of Rs. 21332457/- made by the Assessing Officer on the basis of estimation without reasoned basis. v) Whether in the facts and circumstances of the case, the decision of the ITAT is perverse.” In DBITA No.47/2016 “i) Whether in the facts and circumstances of the case the ITAT & CIT(A) were justified in law in restricting the additions without assigning any reasons when the invoking of the provisions of section 145 of the Act has been upheld? ii)Whether in the facts and circumstances of the case, the ITAT has not acted perversely in reducing and restricting the trading additions without assigning any reasons and making estimation over estimation? iii)Whether in the facts and circumstances of the case, the ITAT and CIT(A) has not acted perversely in reducing and restricting the trading

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additions which were based upon the proper inquiry and after considering the explanation of the assessee and invoking the provisions of section 145 of the Act. iv) Whether in the facts and circumstances of the case, the ITAT was justified in law in applying G.P. rate @ 30% in country liquor account as against 40% applied by the Assessing Officer and 2.5% in the case of IMFL and Beer as against 5% applied by the Assessing Officer. v) Whether in the facts and circumstances of the case, the decision of the ITAT is perverse.” In DBITA No.159/2014 “Whether the Tribunal was justified in passing a self contradictory order, by on one hand upholding the rejection of books of accounts u/s 145 (3) of the Act and even the application of net profit rate of 1% on the basis of assessee's results for the past years and on the other hand, reducing the addition of Rs. 92,40,494/- to merely Rs. 17,35,494/-, ignoring the directions issued by Hon'ble High Court and also without giving any justification for the same?” In DBITA No.30/2016 “Whether the Tribunal was justified in ignoring the directions issued by Hon'ble High Court and findings recorded by itself, thereby on one hand observing that the assessee has failed to produce proper record and has dodged the enquiry process and resultantly upholding the rejection of books of accounts, and on the other hand, confirming the addition of only Rs.20,00,000/- on turnover of Rs.8,05,62,601/- of country liquor and IMFL/Beer without giving any justification for the same?” In DBITA No.31/2016 “Whether the Tribunal was justified in ignoring the directions issued by Hon'ble High Court and findings recorded by itself, thereby on one hand observing that the assessee has failed to produce proper record and has dodged the enquiry process and resultantly upholding the rejection of books of accounts, and on the other hand, reducing the trading addition of Rs.4,61,81,187/- to merely Rs.1,50,00,000/- without giving any justification for the same?” In DBITA No.160/2014 “1. Whether the findings of the ITAT are wholly misconceived and suffered with erroneous

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approach in sustaining the additions made by the AO against the settled principles of accounting and Accounting Standards notified by the Central Government u/s 145(2) of the Act.? 2. Whether in the proceedings u/s 145(3) read with section 144 of the Act, addition made without any basis of computation as also without establishing nexus thereof with the available facts & circumstances is permissible in law.? 3. Whether the learned ITAT was right in sustaining the trading addition at a notional, hypothetical or unreal figure and levy and recovery of the income tax thereon is permissible in law.?” In view of the subsequent development of law and evidence, it is appropriate to remit back the matter to the Assessing Officer. All parties will appear before the Assessing Officer in first week of November, 2017. All the parties will produce all documents before the authority on which they want to rely upon and the Assessing Officer will hear both the sides and after giving reasonable opportunity of being heard and if any statement is to be relied upon, will also grant opportunity to cross examine. We make it clear that in view of the order of High Court, the Tribunal has not considered the same, therefore, we are remitting back the matter to the authority since both the sides have preferred the appeal against the order of Tribunal. To give effect to the order the authority will hear the parties afresh without being influence by the order of CIT(A) or of this Court. With the above observations, the appeals stand disposed of. (INDERJEET SINGH),J. (K.S. JHAVERI),J. A.Sharma/