COMMISSIONER OF INCOME TAX vs. SEVEN SYNTHETICS

ITA/292/1999HC GujaratGJHC24025031199928 September 1999Author: HONOURABLE MR. JUSTICE B.C.PATEL,HONOURABLE MR. JUSTICE P.B.MAJMUDAR3 pages
AI SummaryDismissed

What were the facts?

The Commissioner of Income-tax (CIT), Surat, filed an application under Section 256(2) of the Income-tax Act, 1961, seeking a reference to the High Court on two questions of law arising from an Income Tax Appellate Tribunal (ITAT) order. The assessee is Seven Synthetics. The first question concerned the deletion of an addition of Rs. 2,80,480 made by the Assessing Officer (AO) for block periods, based on inferences from seized materials. The second question related to the deletion of additions of Rs. 3,68,776 under Section 69, where the AO had disregarded materials. The High Court was asked to direct the ITAT to state a case on these issues.

What did the High Court hold?

The High Court rejected the application for reference. Regarding Question No. 1, the Court noted that the Tribunal had already rejected a similar application based on a previous decision of the High Court in N.R. PAPER & BOARDS LTD. reported in 234 ITR page 733, and an order in ITA No. 266 of 1999. Therefore, the Tribunal was justified in rejecting the application on this point. For Question No. 2, the Court observed that the AO had estimated the cost of construction of the factory building himself at Rs. 3,200 per sq. mt., arriving at an unexplained investment of Rs. 3,68,776. The Tribunal, however, had pointed out that in cases involving valuation, it is necessary for the AO to refer the matter to the District Valuation Officer to ascertain the correct value. The High Court found no reason to interfere with the Tribunal's finding and rejected the application.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the ITAT was justified in deleting the addition of Rs. 2,80,480 in the block periods made by the Assessing Officer by drawing an inference from the seized materials? - Assessee's contention: Not recorded. - Revenue's contention: Not recorded. 2. Whether, on the facts and in the circumstances of the case and in law, the ITAT was justified in deleting the additions of Rs. 3,68,776 under Section 69 to the disregard of materials relied upon by the Assessing Officer? - Assessee's contention: Not recorded. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 256(2),Section 69

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX APPLICATION No 292 of 1999

For Approval and Signature:

Hon'ble MR.JUSTICE B.C.PATEL and Hon'ble MR.JUSTICE P.B.MAJMUDAR ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? YES

2.

To be referred to the Reporter or not? YES :

3.

Whether Their Lordships wish to see the fair copy : NO of the judgement? NO 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? NO 5. Whether it is to be circulated to the Civil Judge? : NO NO

The order continues below.

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