THE PRINCIPAL COMMISSIONER OF INCOME TAX-2 vs. M/S GOPAL SPACE ORG. P. LTD.

PDF · subscribers
TAXAP/208/2020HC GujaratGJHC24038168202017 September 2020Bench: HONOURABLE THE CHIEF JUSTICE MR. JUSTICE VIKRAM NATH,HONOURABLE MR. JUSTICE J.B.PARDIWALA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the question proposed by the Revenue could not be termed as a substantial question of law. This was due to concurrent findings of fact by both the CIT(A) and the ITAT. The Tribunal had affirmed the CIT(A)'s finding that there was no material on record to conclusively prove that the investment made by the assessee had not been reflected in the books of accounts. The ITAT reasoned that no payment was made by the assessee in the relevant year and no asset came into existence in the assessee's name requiring disclosure. The AO had merely assumed facts and the existence of an unexplained asset. Therefore, the appeal was dismissed.

What were the facts?

This is a Tax Appeal filed by the Revenue against an order of the ITAT, Ahmedabad Bench ‘A’, dated January 9, 2020. The appeal pertains to Assessment Year 2012-2013. The ITAT had dismissed the Revenue's appeal, upholding the decision of the CIT(A) who had deleted an addition made by the Assessing Officer. The addition was on account of unexplained investment made by the assessee, M/s Gopal Space Org. P. Ltd., in the purchase of land, as per Section 69 of the Income Tax Act, 1961. The High Court is considering the substantial question of law proposed by the Revenue.

What were the issues?

1. Whether the Appellate Tribunal erred in law and on facts by upholding the decision of the CIT(A) in deleting the addition made by the Assessing Officer under Section 69 of the Income Tax Act, 1961, on account of unexplained investment made by the assessee in the purchase of land? Assessee's Contentions: The judgment does not record specific contentions made by the assessee before the High Court. However, the ITAT's reasoning implies that the assessee likely argued that no payment was made in the relevant year and no asset came into existence in their name requiring disclosure. Revenue's Contentions: The Revenue contended that the Appellate Tribunal erred in law and facts by upholding the CIT(A)'s deletion of the addition made under Section 69 for unexplained investment in land.

Which sections of the Income-tax Act were involved?

Section 69,Section 260A

AI-generated summary — verify with the full judgment below

C/TAXAP/208/2020 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 208 of 2020 ================================================================ THE PRINCIPAL COMMISSIONER OF INCOME TAX-2 Versus M/S GOPAL SPACE ORG. P. LTD. ================================================================ Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE THE CHIEF JUSTICE MR. VIKRAM NATH and HONOURABLE MR. JUSTICE J.B.PARDIWALA

Date : 17/09/2020

ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)

This Tax Appeal under Section 260A of the Income Tax Act, 1961, is at the instance of the Revenue and is directed against the order passed by the ITAT, Ahmedabad Bench ‘A’, Ahmedabad, dated 9th January 2020 in the ITA No.1261/Ahd/2016 for the Assessment Year 2012-2013.

The Revenue has proposed the following substantial question of law for the consideration of this Court : “Whether the Appellate Tribunal had erred in law and on facts by upholding the decision of CIT(A) deleting the addition made by the Assessing Officer u/s 69 of the Act on account of unexplained investment made by the assessee in purchase of land ?” Page 1 of 3

C/TAXAP/208/2020 ORDER

The Tribunal, while dismissing the appeal filed by the Revenue and affirming the findings recorded by the CIT(A) in favour of the assessee, has held as under : “The question before us is, whether there is any evidence available on the record proving conclusively that investment was made by the assessee, which has not been reflected in the books of accounts. The ld. CIT(A) has recorded a finding that in this year no payment was made by the assessee, and after looking into the chain of evidence flowing from different agreements, civil suits and ultimate resolution of the dispute, we are of the view that in this year, no asset came into existence in the name of the assessee, which requires to be shown in the books of accounts. The ld. AO has simply assumed certain facts, and assumed existence of unexplained asset which requires to be added under section 69 of the Act.”

Thus, there is a concurrent finding of fact recorded by the two authorities, namely the CIT(A) as well as the Appellate Tribunal, that there is no material on record to prove conclusively that the investment made by the assessee had not been shown in the books of accounts.

In view of the concurrent findings of fact, the question proposed by the Revenue cannot be termed as a substantial question of law. Page 2 of 3

C/TAXAP/208/2020 ORDER

In the result, this Appeal fails and is hereby dismissed. (VIKRAM NATH, CJ.) (J. B. PARDIWALA, J.) /MOINUDDIN/ NAIR SMITA V. Page 3 of 3

More judgments on Section 69

All 9,011 judgments and leading authorities on Section 69 →

Recent GST High Court judgments

Search GST case law →