COMMISSIONER OF INCOME TAX-24 MUMBAI vs. ISMAIL ALIJI NANDOLIYA

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TAXAP/900/2011HC GujaratGJHC24025498201121 June 2012Author: HONOURABLE MR. JUSTICE VIJAY MANOHAR SAHAI,HONOURABLE MR. JUSTICE N.V.ANJARIA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court held that the issue of income from the sale of milk, and the amounts sought to be added by the Assessing Officer, were matters of estimation of figures and appreciation of facts. The number of buffaloes the assessee possessed and the per-liter price of milk were questions of fact that had been considered by the lower tax authorities, culminating in the impugned order of the Tribunal. The Court noted the concurrent findings of fact recorded by the Commissioner (Appeals) and the Tribunal, deeming them reasonable and based on the material before the Tribunal, with no perversity demonstrated. Citing Supreme Court decisions in M. Janardhana Rao vs. Joint Commissioner of Income Tax and Vijay Kumar Talwar vs. Commissioner of Income Tax, Delhi, the Court stated that when the Tribunal's findings are findings of fact, the High Court would not be justified in interfering in appeal. Therefore, no substantial question of law arose for consideration.

What were the facts?

The Revenue has filed this Tax Appeal under Section 260A of the Income Tax Act, 1961, challenging an order dated May 18, 2007, passed by the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench 'C'. The appeal concerns an assessment for the block period April 1, 1991, to January 9, 2001. A search under Section 132 was conducted against the assessee, Ismail Aliji Nandoliya, who was jointly engaged in dairy farming. The Assessing Officer (AO) determined undisclosed income from dairy milk business at Rs. 1,30,19,280, based on the estimated yield from 34 buffaloes and the selling price per liter. The Commissioner (Appeals) deleted this addition, finding that the AO relied on a milk sale register seized from a different person, Mohammad Aliji Nandoliya, and that no material evidence linked unaccounted income to the assessee.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the Tribunal erred in deleting the addition made on account of the sale of milk? (Question of law and fact, concerning the addition of income from milk sales). 2. Whether, on the facts and in the circumstances of the case and in law, the Tribunal erred in deciding the issue in favour of the assessee, where the determination of the quantity of milk sale and sale price per buffalo contemplated by the AO was not disputed by the assessee at the time of assessment proceedings? (Question of law and fact, concerning the AO's determination of milk quantity and price). Assessee's Contentions: The judgment does not record specific contentions made by the assessee. The ITAT's order, as noted in the judgment, confirmed the deletion of the addition made by the AO. The ITAT found the AO's addition to be superfluous and without basis, noting the assessee had declared 45 buffaloes in his balance sheet and the cost of each buffalo. The Commissioner (Appeals) had previously deleted the addition, stating the AO mechanically applied material found in another person's case. Revenue's Contentions: The Revenue argued that the Tribunal erred in deleting the addition on account of milk sales and in deciding in favour of the assessee, particularly concerning the AO's determination of milk quantity and sale price, which the Revenue claimed was not disputed by the assessee during assessment.

Which sections of the Income-tax Act were involved?

Section 260A,Section 132

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
TAXAP/900/2011 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 900 of 2011 For Approval and Signature: HONOURABLE MR.JUSTICE V. M. SAHAI HONOURABLE MR.JUSTICE N.V. ANJARIA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the  judgment? 2 To be referred to the Reporter or not? 3 Whether their Lordships wish  to see the  fair copy of the  judgment? 4 Whether this case involves a substantial question of law as to  the interpretation of the constitution of India, 1950 or any  order made thereunder? 5 Whether it is to be circulated to the civil judge? ========================================================= COMMISSIONER OF INCOME TAX-24 MUMBAI - Appellant(s) Versus ISMAIL ALIJI NANDOLIYA - Opponent(s) ========================================================= Appearance : MRS MAUNA M BHATT for Appellant(s) : 1, None for Opponent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI and HONOURABLE MR.JUSTICE N.V. ANJARIA Date : 21/06/2012

ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE N.V. ANJARIA)

1.

The Revenue has preferred this Tax Appeal under Section 260A of the Income Tax Act, 1961 ('the Act', for sake of brevity) to challenge the order   dated   18.05.2007   of   the   Income   Tax   Appellate   Tribunal, Ahmedabad Bench 'C' in   IT (SS) No.278/Ahd/2003 by proposing the

TAXAP/900/2011 2/4 JUDGMENT following two questions formulated in the memorandum of appeal as substantial questions arising in the appeal. “[A]  Whether on the facts and in the circumstances of the case and in law, the Tribunal erred in deleting the addition made on account of sale of milk? [B] Whether on the facts and in the circumstances of the case and in law, the Tribunal erred in deciding the issue   in   favour   of   the   assessee,   where   the determination  of  quantity   of  sale of  milk  and  sale price   of   milk   per   buffalo   contemplated   by   the assessing officer was not disputed by the assessee as well as at the time of assessment proceedings?”

2.

We have heard learned counsel Mrs. Mauna Bhatt for learned senior counsel Mr. M. R. Bhatt for the appellant. We have gone through the impugned order and have considered the relevant facts on record.

3.

Necessary facts involved in the appeal with reference to which the proposed questions of law are formulated are that the assessee and his group were jointly engaged in the business of dairy farming. An action of search under Section 132 of the Income Tax Act, 1961 was carried out at various places against the assessee. On the basis of information gathered during   the   search,   the   Assessing   Officer   in   his   Assessment   Order calculated total undisclosed income from dairy milk business for the block period between 1st April 1991 and 9th January 2001 at Rs.1, 30, 19,280/­. The Assessing Officer worked out the yield of milk on the basis of 34 buffaloes and the selling price of milk per liter.

4.

The Commissioner (Appeals) while dealing with the issue in the appeal   of   the   assessee   deleted   the   said   income   estimated   by   the Assessing Officer, as according to him the Assessing Officer had made the addition on the basis of a register containing details of sale of milk which was seized from one Mohammad Aliji Nandoliya who was a different

TAXAP/900/2011 3/4 JUDGMENT person. The Appellate Commissioner was of the further view that no material evidence whatsoever was found which could establish that any unaccounted income from sale of milk had been earned by the assessee and the Assessing Officer had mechanically applied the material found in case of another person.

4.

1 The findings recored by the Appellate Commissioner came to be confirmed by the Income­tax Appellate Tribunal while dismissing the appeal of the Revenue. The Tribunal recorded its confirming findings as under: “After going through the case records it is seen that the assessee has declared the cost of purchase of buffaloes the value of each buffaloes at Rs.29,300/­ without suggest that the cost of each buffalo is at Rs.29,300/­. The assessee has [ AIR 2005 SC 1309] and in Vijay Kumar Talwar vs. Commissioner of

TAXAP/900/2011 4/4 JUDGMENT Income Tax, Delhi [2011 (1) SCC 673], the Supreme Court has observed that when the findings arrived at by the Income Tax Tribunal are findings of facts, the High Court would not be justified in interfering in Appeal. No substantial question arises for consideration in the aforesaid facts and circumstances.

7.

Accordingly, this Appeal is dismissed. [V. M. SAHAI, J.] [N. V. ANJARIA, J.] Amit

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