PR COMMISSIONER OF INCOME TAX CENTRAL vs. M/S SANCHETI BUILDTECH PVT LTD

PDF · subscribers
ITA/48/2018HC RajasthanRJHC02016185201810 April 20183 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal raises issues requiring appreciation of facts, and therefore, no substantial question of law arises. Consequently, the appeal filed by the revenue stands dismissed. The reasoning provided is that the determination of whether additions can be made in the absence of incriminating documents and whether the merits of the AO's additions should be considered involves a factual analysis, which falls outside the scope of a substantial question of law. The court did not delve into the specifics of the additions made by the AO or the findings of the ITAT on the merits of the case. The ratio decidendi is that appeals to the High Court under the Income Tax Act are limited to substantial questions of law, and if the matter primarily involves factual disputes, the High Court will not interfere. No specific issue was left undecided; the appeal was disposed of on the preliminary ground of not raising a substantial question of law.

What were the facts?

A search and seizure action under Section 132 of the Income Tax Act, 1961, was conducted on September 26, 2012, at the residential premises of the assessee group and their family members. During the search, various assets, incriminating documents, loose papers, and books of accounts were found, inventorized, and some were seized. A notice under Section 153C was issued to the assessee on May 22, 2014, to which the assessee filed a return of income on June 2, 2014, declaring an income of Rs. 1,35,610/-. A notice under Section 143(2) was issued on October 10, 2014, followed by a questionnaire and notice under Section 142(1) on October 14, 2014. The Assessing Officer (AO) passed an assessment order on March 25, 2015, making an addition of Rs. 1,65,00,000/- for investment in shares as unexplained money and a disallowance of Rs. 3,41,000/- under Section 43A(3) for cash payments exceeding Rs. 20,000/-, and Rs. 1,524/- towards income tax.

What were the issues?

1. Whether, on the facts and circumstances of the case and in law, the Hon'ble ITAT was correct in holding that no addition can be made in the absence of any incriminating documents, despite certain documents belonging to the assessee being found and seized during the search conducted on September 26, 2012, at the residential and business premises of Sh. Roshan Lal Sancheti? (Question of law/mixed law and fact, turning on the interpretation of evidence found during search and its relevance for additions). 2. Whether, on the facts and circumstances of the case and in law, the Hon'ble ITAT was correct in holding that it need not deal with the merits of the additions made by the AO, contrary to the judgments of the Hon'ble Delhi High Court in CIT vs. Chetan Das Lachman Das, CIT vs. Anil Kumar Bhatia, Filatax India Ltd. vs. CIT, and the Hon'ble Kerala High Court in Sunny Jacob Jewellers and Wedding Centre vs. Deputy Commissioner of Income Tax? (Question of law, turning on procedural aspects and the applicability of precedents). Assessee's contentions: The ITAT allowed the cross objections of the assessee and dismissed the appeal of the revenue. The judgment does not explicitly record the assessee's arguments before the High Court, but implies the ITAT's decision favored the assessee by holding no addition could be made without incriminating documents and that the merits of AO's additions need not be dealt with. Revenue's contentions: The revenue, as the appellant, argued that the ITAT erred in holding that no addition can be made without incriminating documents, especially when documents belonging to the assessee were seized. The revenue also argued that the ITAT was incorrect in not dealing with the merits of the AO's additions, citing various High Court judgments.

Which sections of the Income-tax Act were involved?

Section 132,Section 153C,Section 143(2),Section 142(1),Section 43A(3)

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. 48/2018 Pr. Commissioner Of Income Tax (Central), Jaipur. ----Appellant Versus M/s. Sancheti Buildtech Pvt. Ltd., 13, Milan Talkies Road, Ashok Nagar, Bhilwara (Raj.) ----Respondent For Appellant(s) : Mr. Siddharth Bapna for Mr. Anil Mehta HON'BLE MR. JUSTICE K.S.JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS

Judgment 10/04/2018

1.

By way of this appeal, the appellant has assailed the judgment and order of the tribunal whereby tribunal has dismissed

the appeal of the revenue and cross objections of the assessee were allowed.

2.

Counsel for the appellant has framed following substantial question of law:- “(i) Whether on the facts and circumstances of the case and in law, the Hon’ble ITAT was correct in holding that no addition can be made in absence of any incriminating documents in the case of the assessee, whereas certain documents belonging to the assessee was found and seized and annexed as Annexure-AS-2 (Page 16-38) during the search conducted on 26.9.2012 at the residential and business premises on Sh. Roshan Lal Sancheti. (ii) Whether on the facts and circumstances of the case in law, the Hon’ble ITAT was (2 of 3) [ITA-48/2018] correct in holding that we need not deal with the merits of the additions made by the AO which is contrary to in view of the judgment of the Hon’ble Delhi High Court in the case of 465/229 taxmann 555 (Del.) and the judgment of Hon’ble Kerala High Court, in Income Tax (2014) 362 ITR 664 (Ker).”

3.

The facts of the case are that a search and seizure action u/s 132 of the Income Tax Act, 1961 was carried out on 26.9.2012 at the residential premises of the assessee group and his family members. Various assets had been found at the time of search and some of them were also seized at various places of the group at the time of action u/s 132 of the Income Tax Act. Certain incriminating documents/loose papers/Books of accounts etc. were also found, inventorized and some of them also seized at the time of search/survey u/s 132/133A of the Income Tax Act, 1961. A notice u/s 153 C was issued on 22.5.2014 which was duly served upon the assessee by Registered post. In response to the notice u/s 153C, the assessee has submitted return of income on 2.6.2014 declaring income of Rs.1,35,610/-. A notice u/s 143(2) was issued on 10.10.2014 and the same was duly served upon the assessee. A detailed questionnaire and notice u/s 142(1) were issued on 14.10.2014.

3.

1 The Assessing Officer vide assessment order dt. 25.3.2015, held that investment of Rs.1,65,00,000/- for the year under consideration in the shares by share application money as unexplained money and made addition in the total income. The (3 of 3) [ITA-48/2018] Assessing Officer also made a disallowance of Rs.3,41,000/- u/s 43A(3) of the IT Act of payments in cash exceeding Rs.20,000/- and Rs.1,524/- towards income tax.

4.

In our considered opinion, the appeal raises the issue requiring appreciation of facts, therefore, no substantial question of law arises.

5.

The appeal stands dismissed. (VIJAY KUMAR VYAS),J (K.S.JHAVERI),J Brijesh 124.

More judgments on Section 132

All 14,598 judgments and leading authorities on Section 132 →

Recent GST High Court judgments

Search GST case law →