THE COMMR. OF INCOME TAX JALANDHAR vs. JASWANT SINGH JUNEJA

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ITA/437/2006HC Punjab & HaryanaPHHC01075158200630 October 2006Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the question involved was primarily a question of fact. It further observed that even if two views were possible, it could not be considered a substantial question of law. The Court found that the findings of the CIT(A) and the ITAT were not based on non-existent or irrelevant material. Therefore, the appeal filed by the Revenue was dismissed. The operative direction was the dismissal of the Revenue's appeal, upholding the deletion of the addition of Rs.17,00,000/- by the ITAT. No issue was expressly left undecided.

What were the facts?

The Revenue, Commissioner of Income Tax, Jalandhar-II, filed an appeal against an order dated 22.02.2006 passed by the Income Tax Appellate Tribunal (ITAT), Amritsar Bench. The ITAT had dismissed the Revenue's appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)]. The assessment year is not explicitly stated, but the assessment was completed on 27.03.1995. Re-assessment proceedings were initiated by the Assessing Officer (AO) on the grounds that the assessee obtained three bank drafts through an employee against cash payment, and the forms in question did not exist, leading to an addition of Rs. 17,00,000/- as undisclosed income. The CIT(A) had accepted the assessee's appeal, deleting the addition.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the findings of the Hon'ble ITAT in deleting the addition of Rs.17,00,000/- made by the AO is unreasonable and contrary to evidence? (Question of fact/mixed law and fact, concerning the AO's addition under Section 68 or similar provisions for undisclosed income). Assessee's Contentions (as inferred from CIT(A)'s findings upheld by ITAT): - M/s. Vikas Pipes, initially held to be non-existent, actually existed. - The basis of re-assessment was not properly confronted to the assessee. - The AO failed to summon parties claimed by the assessee to have paid sale proceeds. - Purchases made by the assessee were mainly from Steel Authority of India and were verifiable. - The assessee produced ST XXII forms for Glorious Industries and CST registration for Bansal Sales Corporation, and the latter firm could not be held non-existent. Revenue's Contentions: - The AO's addition of Rs.17,00,000/- was justified as undisclosed income due to non-existent forms and cash payments for bank drafts.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
ITA no.437 of 2006 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.437 of 2006 Date of decision:30.10.2006 The Commissioner of Income Tax, Jalandhar-II, Jalandhar ....Appellant versus Shri Jaswant Singn Juneja, Jalandhar ....Respondent CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE RAJESH BINDAL Present: Dr. N.L.Sharda, Advocate, for the revenue.

JUDGMENT: This appeal has been preferred by the revenue against the order dated 22.2.2006 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (for short, 'the Tribunal') in ITA No.476(ASR)/2003, proposing following substantial question of law:- “Whether, on the facts and in the circumstances of the case, the findings of the Hon'ble ITAT in deleting the addition of Rs.17,00,000/- made by the AO is unreasonable and contrary to evidence?”

The assessee filed its return of Income, which was assessed in respect of which assessment was completed on 27.3.1995. Subsequently, re-assessment proceedings were initiated on the ground that the assessee got three bank drafts prepared through its employee against cash payment and since the forms in question did not exist, the amounts of bank drafts were undisclosed income of the assessee. The Assessing Officer made an addition of Rs.17,00,000/-. Appeal of the assessee was accepted by the Commissioner of ITA no.437 of 2006 2 Income Tax (Appeals), for the following reasons:- (i) Facts established that M/s. Vikas Pipes which was held to be non-existent, did exist; (ii) Basis of re-assessment was not confronted to the assessee; (iii) The Assessing Officer did not summon the parties claimed by the assessee to have paid the amounts of sale proceeds; (iv) Purchases were made by the assessee mainly from Steel Authority of India which were verifiable; (v) The assessee had produced ST XXII forms in respect of Glorious Industries and CST registration of Bansal Sales Corporation and the said firm could not be held to be non-existent. Appeal of the revenue against the order of the CIT(A) has been dismissed by the Tribunal.

We have heard learned counsel for the revenue and perused the findings of the Tribunal, particularly in paras 7 and 7.1 of the impugned order. The question involved is primarily a question of fact and even if two views are possible, the same cannot be held to be a substantial question of law. Findings of the CIT(A) and the Tribunal are not shown to be based on non-existent or irrelevant material.

The appeal is dismissed. (Adarsh Kumar Goel) Judge October 30, 2006 (Rajesh Bindal) 'gs' Judge

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