GYARSI LAL VIJAY vs. C I T and ORS

Instant income tax appeal u/sec.260A of the Income Tax Act, 1961 is directed against the order dt.28.9.2001 passed by Income Tax Appellate Tribunal, Jaipur Bench, Jaipur. It relates to the assessment year 1991-92. Following questions of law were admitted by this Court :- “1. Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that belated return on 26.2.1992 cannot be revised and revised return filed on 10.3.1993 by the appellant is non est in the eye of law?

Whether on the facts and in the circumstances of the case the Tribunal was justified in sustaining an addition of Rs.60,000/- as unexplained cash credit and treated as unexplained income u/S.68 of the Act?

Whether on the facts and in the circumstances of the case the Tribunal was justified in not entertaining a plea of the assessee regarding benefit of telescoping to cover the addition of cash credit of Rs. 60,000/- as unexplained from trading addition

However counsel during the course of hearing restricted his arguments to question No. 3 only. The claim of the counsel is that in the instant case trading addition of Rs. 3,56,181/- was made by the Assessing Officer on the finding that during the course of search and seizure incriminating documents, diaries were found by the authorized officers of the Revenue Department, where unrecorded purchases were found noticed and therefore the AO made aforesaid trading addition of Rs. 3,56,181/-. The AO also found that there were cash credits in the name of 4 persons namely (i) Rukmani Devi – Rs. 20,000/- (ii) G.L. Gupta – 12,000/- (iii) no name shown but amount Rs.10,000/- (iv) Rajesh Gupta – 18,000/-. Since the assessee could not prove genuineness and creditworthiness of the deposits of cash credits the AO made separate addition of Rs. 60,000/- u/S. 68 of the Act.

The appeal having been assailed before the CIT (A) resulted into dismissal of the same. A further appeal filed by the assessee before the Tribunal resulted into partial relief and insofar as the trading addition is concerned the matter was restored back to the AO with certain directions however the addition relating to cash credit of Rs. 60,000/- was upheld.

Learned counsel for the assessee contended that insofar as question No. 3 is concerned admittedly

Per contra learned counsel for the Revenue contended that there is no averment in the appeal even of raising this legal issue and the assessee cannot suddenly raise a claim, which does not emerge out of the order of the lower authority including Tribunal as well. He further contended that the additions are separate and it cannot be telescoped, as search and seizure revealed incriminating documents which was not disclosed by the assessee and contested all through out.

We have considered the arguments advanced by the counsel for the parties, admittedly the question so 4 raised by the assessee does not emerge out of the order of the Tribunal though legal issue can always be raised by a party. Be that as it may, the Tribunal set-aside the matter relating to trading addition to the AO with the following directions:- “ However, it also cannot be denied that some investment was required to be made in making the payments for purchases not recorded in regular books. The assessing officer shall work out the same as peak investment in purchases and bring it to tax along with the excess of sale and purchases found unrecorded in the regular books as income of the assessee. He shall afford reasonable opportunity of being heard to the assessee before coming to the final conclusion.”

Therefore, as of now neither parties are aware as to what is the fate of the direction of the Tribunal who had restored/remanded the matter to the ld. A.O. as to whether addition repeated or relief granted relating to trading addition, therefore, we are not inclined to accept the contention of telescoping the two additions at this stage. Therefore, the position being still not clear, we in the facts need not answer the said question and leave the question open to be considered in appropriate proceeding. Appeal is disposed of in above terms. (JAINENDRA KUMAR RANKA),J. (AJAY RASTOGI),J. Savita