CIT, FARIDABAD vs. TULE RAM, VPO, NATHUPUR, GURGAON

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ITA/911/2008HC Punjab & HaryanaPHHC01080951200807 July 2009Author: MR. JUSTICE ADARSH KUMAR GOEL,MRS JUSTICE DAYA CHAUDHARY2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the question of whether a document found during a search can be held to be reliable or not, in the given facts and situation, does not constitute a substantial question of law. The Court reasoned that this determination is a finding of fact. Since the CIT(A) and the ITAT had concurrently found the documents recovered during the search to be unreliable, this concurrent finding of fact precluded the High Court from interfering under Section 260A of the Act. Therefore, no substantial question of law arose for consideration. The appeal was dismissed on this basis, without delving into the merits of the assessment itself.

What were the facts?

The Revenue preferred an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 16.11.2007 passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench 'E', New Delhi. The appeal pertained to assessment years 1989-90 to 2000-01. Block assessment proceedings were initiated against the assessee, Shri Tule Ram, following a search of another assessee's premises on 6.2.1999, which indicated the assessee's involvement in property purchase. The assessee initially filed a return declaring nil undisclosed income. The Assessing Officer (AO) made an assessment based on seized material, noting the assessee's admission of contact with the searched individual and the assessee's sufficient assets, inferring undisclosed income. The CIT(A) reversed the AO's findings, deeming the recovered material unreliable, a view affirmed by the ITAT.

What were the issues?

1. Whether, in the given facts and situation, a document found during a search can be held to be reliable or not, constituting a substantial question of law under Section 260A of the Income Tax Act, 1961. Assessee's Contentions: The judgment does not record any specific contentions made by the assessee. The ITAT affirmed the CIT(A)'s findings, which held that the material recovered during the search was unreliable. The High Court considered whether the finding of unreliability of documents was a question of law. Revenue's Contentions: The revenue contended that the AO had made an assessment based on seized material and the assessee's admission, and that the ITAT's reversal of this finding involved a substantial question of law. The revenue implicitly argued that the ITAT erred in holding the seized documents to be unreliable, thereby challenging the factual finding.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

(1) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH DATE OF DECISION: 7.7.2009 Commissioner of Income Tax, Faridabad ..........Appellant Versus Shri Tule Ram ..........Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:- Mr. Rajesh Katoch, Advocate for the appellant. **** ADARSH KUMAR GOEL, J. (Oral)

This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against order dated 16.11.2007 passed by the Income Tax Appellate Tribunal, Delhi Bench 'E', New Delhi in ITA No. 125/DEL/2004 for the assessment years 1989-90 to 2000-01. 2. During search of business and residential premises of another assessee on 6.2.1999, certain documents were seized indicating involvement of the assessee in purchase of property. Block assessment proceedings were initiated, on which the assessee filed return declaring nil undisclosed income. However, the Assessing Officer made assessment on the basis of material seized during the search on the ground that the assessee admitted his having come into contact with the other assessee in whose premises search was conducted. It was also observed that the assessee was having sufficient assets, from which inference of undisclosed (2) income was drawn.

On appeal, the findings made by the Assessing Officer were reversed holding that the material recovered was not reliable. It was observed that in the assessment of Dalip H. Surtani, the assesee in whose premises search was conducted, the documents found were unreliable. The Tribunal affirmed the findings of CIT(A).

In view of concurrent finding of CIT(A) as well as the Tribunal, it is clear that the documents recovered at the time of search were found to be unreliable. Whether in the given facts and situation, a document found can be held to be reliable or not, cannot be held to be a question of law.

The finding recorded by the Tribunal is, thus, a finding of fact. No substantial question of law arises.

The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE July 07, 2009

(DAYA CHAUDHARY) pooja JUDGE Note:-Whether this case is to be referred to the Reporter .......Yes/No

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