SUSHIL KUMAR vs. COMMISSIONER OF INCOME TAX, KARNAL

ITA/86/2012HC Punjab & HaryanaPHHC01099454201201 August 2013Author: MR. JUSTICE DR. BHARAT BHUSHAN PARSOON,MR. JUSTICE RAJIVE BHALLA12 pages
AI SummaryDismissed

What were the facts?

The assessee, a proprietor and commission agent dealing in foodgrains, underwent a survey under Section 133-A of the Income Tax Act, 1961, on January 19, 2007. During the survey, an amount of Rs. 6,00,000 was surrendered, which was later disclosed in the profit and loss account. The assessee filed a return declaring an income of Rs. 87,997. The Assessing Officer (AO), after initiating scrutiny proceedings, assessed the income at Rs. 29,93,210. The Commissioner of Income Tax (Appeals) partly allowed the assessee's appeal. Both the assessee and the revenue challenged the CIT(A)'s order before the Income Tax Appellate Tribunal (ITAT). The ITAT dismissed the revenue's appeal and partly allowed the assessee's appeal. The present appeals are filed by the assessee against the ITAT's order for the assessment year 2007-08.

What did the High Court hold?

The High Court held that the questions of law proposed by the assessee were not questions of law but were purely factual. The court noted that the Assessing Officer had rejected the books of accounts under Section 145(3) due to defects and the fact that the books were prepared after the survey. This finding was affirmed by the appellate authorities. The court found that the entire dispute revolved around the factual matrix of the case, including the genuineness of the books of accounts, the valuation of rice, and the explanation for certain transactions. The court observed that the assessee had not been able to persuade the statutory authorities regarding the genuineness of its books of accounts. The High Court concluded that since no substantial question of law arose for consideration, the appeal was not maintainable under Section 260A of the Act and was consequently dismissed. The court did not decide on the merits of the individual additions as it found the appeal to be non-maintainable on the ground that it did not involve a substantial question of law.

What were the issues?

1. Whether the Tribunal's order is sustainable in law for upholding the rejection of the assessee's books of accounts under Section 145(3) of the Income Tax Act, 1961? Assessee's contention: The books of accounts were maintained in the regular course of business, and no defects were found by the AO after cross-verification with parties' accounts, delivery challans, and bank statements. The AO's method of valuing rice was incorrect. Revenue's contention: The assessee had fudged accounts and engaged in under-billing. The assessee's books did not tally with traders, sales tax agencies, or banks. 2. Whether the Tribunal's order is sustainable in law by dismissing the assessee's appeal and upholding the addition of Rs. 3,39,954 from the Rice Permal Account and Rs. 1,97,364 from the Rice sold out of State Account, which is contrary to the material on record? Assessee's contention: (Not explicitly recorded for this specific issue, but implied by the appeal against the dismissal). Revenue's contention: (Not explicitly recorded for this specific issue, but implied by the upholding of additions). 3. Whether the decision of CIT vs. Ram Sanehi Gian Chand, (1972) 86 ITR 724 (P&H) is a binding precedent for the proposition of law regarding getting the 'advantage of surrendered amount' against the amount deposited in banks on various dates after the date of surrender? Assessee's contention: The judgment in CIT vs. Ram Sanehi Gian Chand supports the assessee's claim regarding the advantage of the surrendered amount. Revenue's contention: (Not recorded).

Which sections of the Income-tax Act were involved?

Section 260A,Section 133-A,Section 145(3),Section 143(2),Section 142(1),Section 69

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH (O&M)

1.

Sushil Kumar ... Appellant v. Commissioner of Income Tax, Karnal ... Respondent

2.

ITA No.87 of 2012 (O&M) Naresh Kumar Jain ... Appellant v. Commissioner of Income Tax, Karnal ... Respondent

Date of decision: August 01, 2013. CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Shri Pankaj Jain, Advocate for the appellant. Dr. Bharat Bhushan Parsoon

, J. These two income tax appeals under Section 260A of the Income Tax Act, 1961 (for short, the 1961 Act) are directed against order of the Income Tax Appellate Tribunal, Chandigarh Bench-A, Chandigarh passed in ITA No.718/CHD/ 2011 dated 28.9.2011 for assessment year 2007-08. Both these appeals are being decided by this common judgment as matter in issue to be adjudicated is the same. For convenience and clarity, facts have been taken from Kadyan Vinod Kumar 2013.08.19 11:33 I attest to the accuracy and integrity of this document Chandigarh ITA No.86 of 2012 and decision is being rendered in both the said app

The order continues below.

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