CIT-II vs. HARMOHAN KAUR

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ITA/585/2009HC Punjab & HaryanaPHHC01084708200908 February 2011Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court noted that all 38 appeals involved common questions and were covered by its order passed on the same day in ITA No. 174 of 2009 (Commissioner of Income-Tax-II, Amritsar Vs. Sh. Tejinder Singh, HUF). In that earlier order, the High Court had remanded the matter to the ITAT for a fresh decision on merits after due opportunity to the parties to be heard. Therefore, applying the same reasoning, the High Court remanded the present appeals to the ITAT for a fresh decision on merits in accordance with law, after hearing both parties. The Court clarified that if the respondent-assessees were aggrieved by this order, they would be at liberty to move the Court for appropriate orders. No specific finding was given on any of the substantial questions of law raised, as the matter was remitted back to the Tribunal.

What were the facts?

The Revenue, Commissioner of Income-Tax-II, Amritsar, filed 38 appeals, including Income-tax Appeal No. 585 of 2009, against an order dated March 24, 2009, passed by the Income Tax Appellate Tribunal (ITAT), Amritsar Bench. The appeals pertain to the assessment year 1998-99. The Revenue contended that the issues in these appeals were covered by a previous order of the High Court in ITA No. 174 of 2009 (Commissioner of Income-Tax-II, Amritsar Vs. Sh. Tejinder Singh, HUF). The High Court, in its order, noted that it had already dealt with the order of the ITAT which was the subject matter of the present appeals in the aforementioned case. Consequently, the High Court decided to dispose of the present appeals in similar terms.

What were the issues?

The High Court was to decide the following substantial questions of law: 1. Whether the ITAT was justified in deleting the addition made by the Assessing Officer (AO) on account of the sale of jewellery, without appreciating the evidence and facts? 2. Whether the ITAT was justified in following the order of the Special Bench of ITAT, New Delhi, which was under challenge before the High Court? 3. Whether the ITAT was justified in following the Special Bench order when it contained contradictory findings regarding the nature of business of M/s Bishan Chand Mukesh Kumar/Bemco Jewellers Pvt. Ltd. and its director, Shri Manoj Aggarwal? 4. Whether the ITAT was justified in following decisions that relied on the order concerning M/s Bishan Chand Mukesh Kumar/Bemco Jewellers without appreciating the facts and evidence in the present case? 5. Whether the ITAT was justified in accepting the genuineness of the jewellery transaction on probabilities, when the respondent's conduct conflicted with the 'Normal human conduct' principle from Supreme Court decisions in Durga Prasad More and Sumati Dayal? 6. Whether the ITAT erred by applying different standards, requiring the Revenue to cross-examine witnesses while accepting the respondent's averments at face value, thereby forcing the Revenue to prove its case beyond reasonable doubt? Assessee's arguments were not recorded. The Revenue argued that the issues were covered by the High Court's order in ITA No. 174 of 2009.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

Income-tax Appeal No.585 of 2009 -1- **** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income-tax Appeal No.585 of 2009 Date of decision: 8.2.2011 Commissioner of Income-Tax-II, Amritsar ...Appellant Versus Smt. Harmohan Kaur ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Mr. G.C.Srivastava, Senior Standing Counsel with Mr. Sukant Gupta, Advocate for the appellant. **** ADARSH KUMAR GOEL, J ( Oral) . 1. This order will dispose of 38 appeals being ITA Nos.355, 378, 429 to 431, 452, 453, 462, 465, 466, 490, 516 to 519, 542, 585, 598, 600, 601, 675, 680, 697, 698, 718 of 2009, 103 to 109, 111, 442, 731, 729, 732 and 819 of 2010 as it has been stated by the learned counsel for the revenue that all the appeals involve common questions. It has been further stated that the issues raised in these appeals are covered by order of this Court passed today in ITA No.174 of 2009 (Commissioner of Income-Tax-II, Amritsar Vs. Sh. Tejinder Singh, HUF). 2. ITA No.585 of 2009 has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 against the order dated 24.3.2009 of the Income Tax Appellate Tribunal, Amritsar Income-tax Appeal No.585 of 2009 -2- **** Bench, Amritsar in I.T.A. No.91(Asr)/2009 for the assessment year 1998-99 proposing to raise following substantial questions of law:- “i) Whether on the facts and circumstances of the case, Hon'ble ITAT Bench was justified in law and on the facts in deleting the addition made by the A.O. on account of transaction of sale of jewellery without appreciating the evidence on record and the facts of the case? ii) Whether on the facts and in the circumstances of the case, the order of Hon'ble ITAT Bench, Amritsar was justified in following the order of the Special Bench of ITAT, New Delhi, which is ex-facie and has been challenged before the Hon'ble High Court? iii) Whether on the facts and in the circumstances of the case, the order of Hon'ble ITAT Bench, Amritsar was justified in following the order of the Special

Bench of ITAT, New Delhi, when that order contained contradictory findings such that, while Shri Manoj Aggarwal was found to be Hawala operator and was equated with M/s Bishan Chand Mukesh Kumar/Bemco Jewellers Pvt. Ltd. (being a director therein) however, findings was given M/s Bishan Chand Mukesh Kumar/Bemco Jewellers Private Limited was engaged in genuine business of trade of jewellery?

Income-tax Appeal No.585

of 2009

-3- **** iv) Whether on the facts and in the circumstances of the case, the order of Hon'ble ITAT was justified in following the decisions of Sh. K.L.Sehgal, Jalandhar which followed the decision of M/s Bishan Chand Mukesh Kumar/Bemco Jewellers without appreciating the facts and evidence on record in the present case? v) Whether on the facts and in the circumstances of the case, the order of Hon'ble ITAT, Amritsar was justified in accepting the genuineness of the jewellery transaction of the respondent on probabilities, when the respondent's conduct conflicted with the test of 'Normal human conduct' principle laid down by the Hon'ble Supreme Court in the case of Durga Prasad More 82 ITR 540 and Sumati Dayal 214 ITR 801? vi) Whether the ld. ITAT grossly erred in law by applying two different yardsticks and standards by requiring the appellant Revenue Dept. to pass test of cross examination of all witnesses and at the same time being satisfied by all the respondent's averments at face value, thus forcing the revenue to prove its case beyond all reasonable doubt?

Even though ordinarily we would have issued notice to the concerned assesses, we consider it to be unnecessary having regard to the fact that the Tribunal has followed the very same order

Income-tax Appeal No.585

of 2009

-4- **** which has been gone into on merits in our order passed today in ITA No.174 of 2009 (Commissioner of Income-Tax-II, Amritsar Vs. Sh. Tejinder Singh, HUF) whereby we have remanded the matter to the Tribunal for fresh decision after due opportunity to the parties to be heard on merits. Accordingly, while disposing of these appeals in same terms, we remand the matters to the Tribunal for fresh decision on merits in accordance with law after hearing both the parties.

Since this order is being passed without notice to the assesses for the reason mentioned above, we make it clear that if respondent-assesses are aggrieved by this order, they will be at liberty to move this Court for appropriate orders.

The appeals stand disposed of accordingly.

A copy of this order be placed on the file of each connected case.

(Adarsh Kumar Goel)

Judge February 08, 2011 (Ajay Kumar Mittal) Pka

Judge

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