KAMAL KISHORE vs. COMMISSIONER OF INCOME TAX PATIALA
What did the High Court hold?
After arguing for some time, the learned counsel for the appellant (assessee) submitted that he may be allowed to withdraw the appeal with the liberty to file an application under Section 254(2) of the Act before the Tribunal. Consequently, the High Court dismissed the appeal as withdrawn. The Court also stated that it shall be open to the appellant to take recourse to the remedies as may be available to him in accordance with law. No decision was made on the merits of the substantial questions of law raised by the assessee.
What were the facts?
The assessee, Shri Kamal Kishore, filed an appeal before the High Court of Punjab and Haryana at Chandigarh under Section 260A of the Income Tax Act, 1961. The appeal challenged an order dated February 11, 2016, passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, for the assessment year 2009-10. The appeal raised several substantial questions of law concerning the rejection of additional evidence, the estimation of Net Profit (NP) rates, and the confirmation of additions to income. The revenue was represented by the Commissioner of Income Tax, Patiala. A written statement was filed by the respondent (revenue) and taken on record.
What were the issues?
The Tribunal had to decide the following substantial questions of law: 1. Whether the ITAT was justified in concurring with the CIT(A) in rejecting the application for additional evidence filed under Rule 46A of the Income Tax Rules, 1962, despite a reasonable cause for non-filing, and in not admitting evidence with bearing on the case, as held in TEK RAM (DEAD) THROUGH LR'S VS. CIT 93 DTR 350 (SC)? 2. Whether the ITAT was justified in concurring with the CIT(A) in rejecting the application for additional evidence (chart of comparable cases) while holding it not to be additional evidence, and in confirming the NP rate of 1% despite it being unreasonably high for the same nature of trade, defying the principle that comparable cases are best evidence and the AO's duty to provide such material? 3. Whether the ITAT was justified in concurring with the authorities below and confirming additions of Rs. 1,00,000/- and Rs. 61,281/- without appreciating that in estimation of income as per GP/NP, no further deductions are allowed except depreciation and interest, as per COMMISSIONER OF INCOME TAX VS. GIAN CHAND LABOUR CONTRACTORS 316 ITR 127 (P&H) and COMMISSIONER OF INCOME TAX, JALANDHAR-II, JALANDHAR V. M/S AGGARWAL ENGG. CO. (JAL.), JALANDHAR CANTT. ITA No.113 of 2006? 4. Whether the ITAT was justified in concurring with the authorities below and confirming the addition on account of income returned of Rs. 1,46,400/- without appreciating that in cases of estimation of income as per GP/NP, no further additions or disallowances are called for? 5. Whether the ITAT's findings confirming additions without adhering to contentious evidence and additional evidence were perverse and illegal? Assessee's Contention: The assessee argued that the ITAT was not justified in rejecting additional evidence, especially when there was a reasonable cause. They contended that comparable cases are crucial for estimating NP rates and that the AO failed to provide such material. They also argued that no further additions or disallowances should be made when income is estimated based on GP/NP rates. Revenue's Contention: The judgment does not record specific arguments made by the revenue.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: 02.05.2017 Shri Kamal Kishore
....Petitioner Versus Commissioner of Income Tax, Leela Bhawan, Patiala ....Respondent CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTAL HON'BLE MR. JUSTICE RAMENDRA JAIN
Present: - Mr. S.K. Mukhi, Advocate, and Mr. Rajiv Sharma, Advocate, for the appellant. Mr. Z.S. Klar, Sr. Standing Counsel, for the respondent-revenue. AJAY KUMAR MITTAL, J. (ORAL) CM No.545-CII of 2017 Written statement on behalf of the respondent filed along with the application is taken on record subject to all just exceptions. CM stands disposed of. ITA No.339 of 2016 This appeal has been filed under Section 260A of the Income Tax Act, 1961(in short 'the Act') against the order dated 11.02.2016 passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh, for the assessment year 2009-10 claiming following substantial questions of law:- “A.Whether the Income Tax Appellate Tribunal, is justified in concurring with the findings of CIT(A) in rejecting the application for additional evidence under given facts and circumstances of the case as filed under Rule 46A of the Income Tax Rules 1962, there being reasonable cause, and hence in not admitting the additional evidences for not filing the same before the authorities below by clearly defying well Ravinder Singh 2017.05.03 10:56 I attest to the accuracy and authenticity of this document
-2- settled law that where the documents have bearing on the case, the same need to be taken into consideration by the competent authorities as was held in the case of TEK RAM (DEAD) THROUGH LR'S VS. CIT 93 DTR 350 (SC)? B. Whether the Income Tax Appellate Tribunal, is justified in concurring with the findings of CIT(A) in rejecting the application for additional evidence being chart of comparable cases alongwith supporting documents under given facts and circumstances of the case though holding these not to be additional evidences but not taking the same into consideration and thereby confirming the application of NP rate of 1% which is against the facts of the present case and being unreasonably high in the same nature of trade as that of the appellant it being a last fact finding body by clearly defying well settled law that comparable cases is one of the best evidence for estimating of GP/NP rate and also that it was the bounden duty of the AO to have brought on record the comparable cases or any other tangible material for arriving at estimate rate of GP/NP which he failed to do so? C. Whether the ITAT is justified in concurring with findings of the authorities below and thereby confirming the impugned addition of Rs1,00,000/- and Rs.61,281/- without appreciating the fact that in cases of estimation of income as per GP/NP no further deductions are to be made except for depreciation and interest and also no additions or disallowances are called for in view of trite law and the judgment of this Hon'ble Court in (P&H) and also held in the case of COMMISSIONER OF INCOME TAX, JALANDHAR-II, JALANDHAR V. M/S AGGARWAL ENGG. CO. (JAL.), JALANDHAR CANTT. ITA No.113 of 2006 dated 24.07.2006 wherein this Hon'ble High Court reiterated the law laid down by Hon'ble Ravinder Singh 2017.05.03 10:56 I attest to the accuracy and authenticity of this document
-3- the Allahabad High Court in COMMISSIONER OF INCOME-TAX V. BANWARI LAL BANSHIDHAR, (1998) 229 ITR 229? D. Whether the ITAT is justified in concurring with findings of the authorities below and thereby confirming the impugned addition on account of income returned of Rs.1,46,400/- without appreciating the fact that in cases of estimation of income as per GP/NP no further additions or disallowances are called for? E. That the findings of ITAT in confirming the impugned additions without adhering to various contentious, evidences and additional evidences filed which is perverse and illegal?”
After arguing for some time, learned counsel for the appellant submitted that he may be allowed to withdraw this appeal with liberty to the appellant to file an application under Section 254(2) of the Act before the Tribunal.
Dismissed as withdrawn.
However, it shall be open to the appellant to take recourse to the remedies as may be available to him in accordance with law.
(AJAY KUMAR MITTAL) JUDGE (RAMENDRA JAIN) May 02, 2017 JUDGE R.S. Whether speaking/reasoned Yes/No Whether Reportable Yes/No Ravinder Singh 2017.05.03 10:56 I attest to the accuracy and authenticity of this document
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