THE PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) vs. SHRI RAJENDRA KUMAR JAIN

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ITA/300/2018HC RajasthanRJHC02096056201827 August 2019Author: S. RAVINDRA BHAT,INDERJEET SINGH2 pages
AI SummaryDismissed

What did the High Court hold?

The Court found that for both additions, the AO relied on the statement of Madan Mohan Gupta, a Director of Hemang Construction Private Limited. The Court noted that Gupta's statement, considered an admission by the AO, merely confirmed the assessee's directorship. It did not contain any admission by the assessee that amounts paid for the acquisition of plots by the company belonged to him or that he had funded the company. Consequently, the Court held that the questions of law urged by the Revenue did not arise, as the findings of the ITAT were purely factual. No substantial question of law arose for consideration. The appeal was dismissed.

What were the facts?

This appeal by the Revenue challenges an order of the Income Tax Appellate Tribunal (ITAT). The original assessment was a block assessment following search proceedings on May 23, 2013. The Assessing Officer (AO) made three additions. The assessee succeeded before the CIT(A) in getting one addition deleted. However, the ITAT deleted two further additions, one of ₹9,00,000/- related to documents recovered during the search, and another of ₹1,01,99,728/-. The Revenue contends that the ITAT erred in its appreciation of facts and evidence, including alleged admissions by the assessee and statements from another individual, Madan Mohan Gupta.

What were the issues?

1. Whether the ITAT erred in deleting the addition of ₹9,00,000/-, which was sought to be brought to tax based on incriminating documents recovered during search proceedings, thereby failing to appreciate the facts in their correct perspective and the overwhelming evidence including admissions by the assessee and statements from Madan Mohan Gupta. (Question of law/mixed law and fact) 2. Whether the ITAT erred in deleting the substantive addition of ₹1,01,99,728/-, thereby failing to appreciate the facts in their correct perspective and the overwhelming evidence including admissions by the assessee and statements from Madan Mohan Gupta. (Question of law/mixed law and fact) Assessee's contentions: Not recorded. Revenue's contentions: The ITAT fell into error in not appreciating the facts in its correct perspective. There was overwhelming evidence by way of admissions by the assessee and statements by Madan Mohan Gupta with regard to the items in question. The AO had relied on the statement of Madan Mohan Gupta, a Director of Hemang Construction Private Limited.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 300/2018 The Principal Commissioner Of Income Tax (Central), Jaipur ----Appellant Versus Shri Rajendra Kumar Jain, D 23-25 Prem Bhawan Lal Bahadur Nagar J.l.n. Marg Jaipur ----Respondent For Appellant(s) : Mr. Siddharth Bapna, Adv. For Respondent(s) : HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE INDERJEET SINGH

Order 27/08/2019 D.B.Civil Misc. Application No.2188/2018:-

For the reasons mentioned in the application, delay in filing the appeal is condoned. The application is allowed. D.B.Income Tax Appeal No.300/2018:-

1.

In this appeal the Revenue urges two grounds; one related to the deletion of `9,00,000/-, - which was brought to tax on account of documents said to be incriminating and recovered from his possession in search proceedings; the other relating to substantive addition of `1,01,99,728/-.

2.

The Court notices that originally three additions were made by the AO based upon block assessments, completed pursuant to search proceedings which took place on 23.05.2013. All three were carried in appeal; the assessee succeeded and one head of income was deleted. The other two- i.e. `9,00,000/- and `1,01,99,728/- were however, deleted by the ITAT.

3.

It is argued on behalf of the Revenue that the ITAT fell into error in not appreciating the facts in its correct perspective. In (2 of 2) [ITA-300/2018] this regard, it is submitted that overwhelming evidence by way of admissions by the assessee as well as statement by the other persons search (Madan Mohan Gupta) with regard to items.

4.

This Court has considered the orders of the CIT(A) and ITAT. It is immediately noticeable that for both the additions the AO had relied upon the statement of Madan Mohan Gupta, a Director of the Company, Hemang Construction Private Limited. The so called admission considered by the AO is nothing more than an admission that the assessee was a Director. He however, nowhere stated that the amounts paid for acquisition of plots by the Company belonged to him or that he had funded the company.

5.

In these circumstances, the question of law urged by the Revenue does not arise. The findings of the ITAT are purely factual. No substantial question of law arises in the opinion of this Court.

6.

The appeal is dismissed. (INDERJEET SINGH),J (S. RAVINDRA BHAT),CJ NAVAL KISHOR-9

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