C I T ALWAR vs. ASHOK KUMAR JAIN

ITA/27/2014HC RajasthanRJHC02071732201317 September 2014Author: JAINENDRA KUMAR RANKA,AJAY RASTOGI7 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises from the ITAT's order. The ITAT, after appreciating the evidence on record and the explanation provided by the assessee, accepted the surrender of Rs. 3 crore, which was made in the return of income. This finding is based on an appreciation of evidence and is a finding of fact. The assessee's explanation, supported by material, indicated that the actual surrender based on documents and unrecorded items came to Rs. 2.20 crore. An additional Rs. 80 lacs was offered on account of other defects and transactions to reach Rs. 3 crore. The AO did not controvert this working or provide evidence to justify an addition over Rs. 3 crore. The High Court noted that the AO had not made any exercise to hold that the surrender of Rs. 3 crore was improper. The explanation was considered by the CIT(A) and the ITAT. The High Court agreed with the ITAT that the Rs. 1.5 crore surrendered in assessment year 2007-08 was available as a fund, which was used for investments in the current year, establishing a direct nexus. The High Court concluded that the ITAT's conclusion was based on appreciation of evidence and was a finding of fact, with no infirmity or perversity. The appeal was dismissed in limine.

What were the facts?

A survey under Section 133A of the Income Tax Act was conducted at the business premises of the respondent-assessee, Shri Ashok Kumar Jain, on November 25, 2009. During the survey, the assessee surrendered a total of Rs. 8 crore, comprising Rs. 2 crore for assessment year 2007-08, Rs. 5 crore for the current year (2008-09), and Rs. 1 crore for assessment year 2009-10. For assessment year 2007-08, the assessee offered Rs. 1.5 crore in the return, which was accepted by the Assessing Officer (AO). For assessment year 2008-09, the assessee offered Rs. 3 crore in the revised return, instead of the Rs. 5 crore surrendered. The AO made an addition of Rs. 2 crore. The Commissioner of Income Tax (Appeals) [CIT(A)] granted relief of Rs. 1.5 crore, sustaining an addition of Rs. 50 lacs. Both the assessee and the revenue appealed to the Income Tax Appellate Tribunal (ITAT). The ITAT allowed the assessee's appeal, deleted the remaining Rs. 50 lacs, and dismissed the revenue's appeal, thereby deleting the entire addition of Rs. 2 crore. The revenue has appealed this ITAT order to the High Court.

What were the issues?

1. Whether a substantial question of law arises from the ITAT's order deleting the addition of Rs. 2 crore made by the AO, which was based on a voluntary surrender made during a survey. Assessee's Contentions (as inferred from the High Court's reasoning and the ITAT's decision): The assessee contended that the initial surrender of Rs. 5 crore was not accurate. Based on actual transactions, peak credits, and documents, the actual surrender should be lower than Rs. 3 crore. The assessee offered Rs. 3 crore to maintain peace. The actual offer based on material, including investment in shares, application money, and non-verifiable creditors, came to about Rs. 2.20 crore. An additional Rs. 80 lacs was surrendered on account of other defects and transactions to reach a total of Rs. 3 crore. The assessee argued that the Rs. 1.5 crore surrendered and offered in assessment year 2007-08 had rotated and constituted a fund available for investment in the current year, creating a nexus for the Rs. 3 crore surrender. The ITAT accepted this explanation and the availability of funds. Revenue's Contentions: The revenue contended that the surrender was voluntary. The assessee was aware of the transactions and voluntarily offered Rs. 5 crore during the survey. There was no reason to restrict the amount later. No material was placed to justify reducing the surrender by Rs. 2 crore. The revenue argued that the ITAT's order was perverse, accepting the assessee's claim without proper reasoning, thus giving rise to a substantial question of law.

Which sections of the Income-tax Act were involved?

Section 133A,Section 260-A

AI-generated summary — verify with the full judgment below

Cited by 34 judgments on BharatTax

See all citing judgments →

Counted from the text of the judgments hosted here. Most recent first.

DB ITR-27/2014 1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR *** DB Income Tax Appeal No.27/2014 :- 17/09/2014 HON'BLE MR. JUSTICE AJAY RASTOGI. HON'BLE MR. JUSTICE J.K. RANKA. Smt. Parinitoo Jain, for the appellant. By the Court : (Per Hon'ble Ranka,J.)

1.

This appeal u/s 260-A of the Income Tax Act (for short, 'IT Act') is directed against the order of the Income Tax Appellate Tribunal (for short, 'ITAT') dt.16/04/2013 and it relates to the assessment year 2008-09. 2. Brief facts, which can be noticed on perusal of the order impugned and the arguments of the counsel for the appellant, are that in the case of the respondent-assessee a survey u/s 133 A of the IT Act was carried out at the business premises on 25/11/2009 and during the course of survey some incriminating documents were found, inventorised and impounded, inventory of cash & stock was also prepared. At the time of survey, statement of the assessee-respondent was also recorded wherein on the basis of impounded loose papers, diaries, documents etc. he surrendered a total sum of Rs.8 crore which comprised of income of Rs

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 133A

All 5,893 judgments and leading authorities on Section 133A →

Recent GST High Court judgments

Search GST case law →