DY COMMISSIONER OF INCOME TAX vs. SHRI MUKHTAYAR AHMAD

ITA/100/2002HC RajasthanRJHC02016376199909 September 20165 pages

AI SummaryAllowed

What did the High Court hold?

The High Court held that the Assessing Officer's method of assessment was not correct. The Tribunal, after considering each issue, ground, law, facts, and evidence on record, had reached its conclusions correctly. The Court found that the Tribunal's view was prima facie correct and based on the available facts and evidence. The Court stated that the Tribunal had considered the evidence available with the AO and the department. The Court reiterated that the Tribunal had explained its findings on each issue in different paragraphs and, after considering the evidence, the conclusion reached by the fact-finding authority (the Tribunal) was correct. The Court viewed these as matters of appreciation of evidence and concluded that there was no substantial question of law. Therefore, the findings arrived at by the Tribunal were just and proper and did not require interference. The AO's view was deemed not proper. The questions raised were answered in favour of the assessee and against the Department.

What were the facts?

These 10 appeals were filed by different assessees belonging to the Mustaq Ahmad group against orders passed under Section 15BBC following search operations conducted on 18.12.1996 at their residential and business premises. The appeals were consolidated for disposal due to similar and interrelated issues. The Assessing Officer (AO) had made additions to income based on various grounds including under-billing, suppression of sales, unrecorded job work income, unexplained cash, jewellery, investments, household items, expenses, and stock. The Income Tax Appellate Tribunal (ITAT) had considered these issues and reached its conclusions.

What were the issues?

The Tribunal had to decide on the following substantial questions of law: 1. Whether the ITAT was justified in determining the method of qualifying undisclosed income solely based on evidence of undisclosed assets/expenditure? 2. Whether the ITAT was justified in disregarding material evidence like under-billing, sales suppression, and the assessee's own statements regarding such transactions? 3. Whether the ITAT was justified in ignoring the AO's method of assessing under-billing because it related to only a part of the period? 4. Whether the ITAT was justified in adopting the evidence of only one party, thereby failing to provide findings of fact required of an appellate court? 5. Whether the ITAT could alter the method of income computation without giving the AO an opportunity to rebut it? 6. Whether the ITAT was justified in reversing the AO's findings of fact after considering all material? 7. Whether the ITAT was justified in making new factual findings unsupported by new evidence before it? Assessee's Contention: The AO's method of assessment was not correct, and the ITAT, after considering the issues, law, facts, and evidence, reached the correct conclusion. The ITAT admitted revised rates for computation. Revenue's Contention: The matter was admitted ex-parte. No substantial question of law was raised by the appellant under Section 260A.

Which sections of the Income-tax Act were involved?

Section 15BBC,Section 260A

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR. (1) D.B. Income Tax Appeal No.100/2002 (2) D.B. Income Tax Appeal No.85/2002 (3) D.B. Income Tax Appeal No.86/2002 (4) D.B. Income Tax Appeal No.87/2002 (5) D.B. Income Tax Appeal No.89/2002 (6) D.B. Income Tax Appeal No.90/2002 Dy. Commissioner of Income Tax Vs.Shri Riyazur Rehman (7) D.B. Income Tax Appeal No.94/2002 (8) D.B. Income Tax Appeal No.97/2002 (9) D.B. Income Tax Appeal No.114/2002 (10) D.B. Income Tax Appeal No.126/2002 Dy. Commissioner of Income Tax Vs.Smt Kherunnisa DATE OF ORDER ::: 9.9.2016 HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE AJAY RASTOGI Mr. Anuroop Singhi with Mr. Sandeep Pathak, for the appellant. Mr. Sanjay Jhanwar, for the respondent. ****

2 BY the Court:- (per Hon'ble Jhaveri, J.)

These 10 appeals have been filed by different assesses belonging to Mustaq Ahmad group of cases, Makrana. These appeals are filed against the order passed under Section 15BBC consequent to the search operation under Income Tax Act, 1961. The search was carried out by the Department on 18.12.96 at the residential and business premises of Mustaq group.

Since the issue involved and grounds in these appeals are of similar nature and inter-related, therefore, these appeals are being disposed of by this common order.

1 For convenience, we are referring the facts from D.B. Income Tax Appeal No.87/2002. The substantial questions of law which have been referred in all these appeals are by and large common and at the time of admission, following questions have been framed for consideration:- “1. Whether the ITAT was justified in deciding the method of qualification of undisclosed income, only by considering the evidence of undisclosed assets/ expenditure?

Whether the ITAT was justified in ignoring relevant and important material evidence

indicating

under billing, suppression of sales, statement of assessee about such transactions?

Whether the ITAT was justified in ignoring the method adopted by the AO about under billing of the bill, on the ground that they related to only a part of period?

Whether the ITAT was justified in 3 adopted the evidence of only one party and by doing so whether it has not failed to give finding on facts which appellate court is required to give?

Whether the ITAT can be permitted to change method of computation of income without giving an opportunity to the Assessing Officer to rebut the same?

Whether the ITAT was justified in reversing the finding of fact which was recorded by the Assessing Officer after considering entire material on record?

Whether the ITAT was justified in giving new findings on the facts, which were not further supported by any new evidence before it?”

1 Counsel for the appellant has contended that the assessing officer while taking out the assessment has relied upon the following conclusion:-

Under Billing of Sales

Suppression of Sales and Gross Profit Thereon

Unrecorded Job work Income

Unexplained Cash

Unexplained Jewellery

Unexplained Investment in vehicles

Household Items

Unexplained Household Expenses

Unexplained Marriage Expenses

10.

Unexplained Investment in Construction of House

11.

Unexplained Stock

12.

Haj expenses and Donations, and after estimating all added income, the tribunal while rejecting the case of the method admitted by the assessing officer as adopted the 4 matter out of 3 which is permissible and considerable revised rates.

2 Counsel for the appellant has taken the order of AO as well as the tribunal.

0 Counsel for the respondent has contended that matter was admitted ex-parte. In view of the provisions of Section 260A, no substantial question of law has been raised by the counsel for the appellant.

We have heard the learned counsel for the appellant as well as counsel for the respondent.

We have gone through the order of assessing officer and the tribunal. The method adopted by the assessing officer was not correct and tribunal while considering the each of the issue has referred separately and discussed each of the head and ground and after considering the law and fact and evidence on record has reached to the conclusion correctly. For the sake of brevity, we are not reproducing the findings of the tribunal.

The Tribunal while considering the case of the assessee as well as the Department has adopted the view which is prima facie correct and based on available facts of the case from the record. It seems that tribunal has considered the evidence which was available with Assessing Officer and the department which is relevant for the conclusion.

We are not reproducing the findings of the tribunal but tribunal while giving finding on each issue, has explained the same in different paragraphs and after considering the evidence on record, the conclusion reached by the tribunal, the fact finding authority is found to be correct. In our view, these are all appreciation of the evidence. In fact, there is no substantial question of law and in that view of the matter, taking into consideration finding arrived at the tribunal is just and proper, which does not require interference in the matter. The view taken by the AO is not proper.

Therefore, we answer the question raised in the present appeal in favour of the assessee and against the Department. (Banwari Lal Sharma), J. (K.S. Jhaveri), J. Brijesh

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