PRINCIPAL COMMISSIONER OF INCOME TAX 2 vs. MILLENNIUM PARK HOLDINGS PVT LTD

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TAXAP/766/2018HC GujaratGJHC24016243201826 July 2018Bench: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE A.Y. KOGJE3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Tax Appeal filed by the Revenue. The Court noted that the impugned order of the ITAT relied on its earlier decision concerning the same assessee for an earlier Assessment Year. Crucially, this earlier decision of the ITAT had been confirmed by a Division Bench of the High Court itself in Tax Appeal No. 35 of 2018 vide order dated February 12, 2018. The learned counsel for the appellant (Revenue) did not dispute this fact. Therefore, the High Court concluded that the issues involved in the present appeal were concluded against the Revenue due to the binding decision of the Division Bench. Consequently, no substantial question of law arose, and the appeal was dismissed. The operative direction was to dismiss the appeal.

What were the facts?

The Revenue, Principal Commissioner of Income Tax 2, has filed a Tax Appeal before the High Court of Gujarat at Ahmedabad challenging an order dated August 4, 2017, passed by the Income Tax Appellate Tribunal (ITAT). The ITAT's order pertains to Appeal No. IT(SS)A No. 368/Ahd/2011 for Assessment Year 2007-08. The dispute concerns the deletion of additions made by the Revenue in respect of an unaccounted payment of Rs. 1,72,75,057/- for the purchase of land. The assessee is Millennium Park Holdings Pvt Ltd. The High Court noted that the ITAT had relied on its earlier decision for the same assessee concerning an earlier Assessment Year, which had been confirmed by a Division Bench of the High Court.

What were the issues?

1. Whether the Appellate Tribunal has erred in law and on facts in upholding the order of the CIT(A) deleting the additions in respect of unaccounted payment of Rs. 1,72,75,057/- for the purchase of land, turning on the interpretation of evidence seized during a search and seizure operation. 2. Whether the order of the Appellate Tribunal is perverse as it failed to consider the relevant material in the form of contents of documents seized during search and seizure. 3. Whether the Appellate Tribunal has erred in law by not appreciating the import of Section 292C of the Income Tax Act, 1961, which raises a presumption regarding the correctness of entries in seized documents. 4. Whether the Appellate Tribunal has erred in law and on facts by not appreciating that income tax proceedings are based on the principles of preponderance of probability and not on proof beyond doubt. 5. Whether the Appellate Tribunal has erred in law and on facts by not relying on the evidentiary value of primary documents seized during search and seizure and wrongfully insisting on further corroborative evidence. Assessee's Contentions: The judgment does not record specific contentions made by the assessee before the High Court. However, the ITAT's decision, which was upheld, deleted the additions made by the Revenue. Revenue's Contentions: The Revenue argued that the Appellate Tribunal erred in deleting the additions concerning unaccounted land purchase payments. They contended that the ITAT's order was perverse for failing to consider seized documents, which were not 'dumb documents'. The Revenue also argued that the ITAT failed to appreciate the import of Section 292C of the Act regarding presumptions from seized documents and that income tax proceedings are based on preponderance of probability, not proof beyond doubt. They further argued that the ITAT wrongly insisted on corroborative evidence instead of relying on the primary seized documents.

Which sections of the Income-tax Act were involved?

Section 292C

AI-generated summary — verify with the full judgment below

C/TAXAP/766/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 766 of 2018 ================================================================ PRINCIPAL COMMISSIONER OF INCOME TAX 2 Versus MILLENNIUM PARK HOLDINGS PVT LTD ================================================================ Appearance: MR MANISH R BHATT, SENIOR ADVOCATE assisted by MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 MR BS SOPARKAR(6851) for the RESPONDENT(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE A.Y. KOGJE

Date : 26/07/2018

ORAL ORDER (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1. Feeling aggrieved and dissatisfied with the impugned order passed by the learned ITAT dated 04.08.2017 passed in Appeal No.IT(SS) A No.368/Ahd/2011 for Assessment Year 2007-08, the Revenue has preferred the present Tax Appeal with the following proposed questions of law:- “[A] Whether the Appellate Tribunal has erred in law and on facts in upholding the order of the CIT(A) deleting the additions in respect of unaccounted payment of Rs.1,72,75,057/- for the purchase of land? [B] Whether the order of the Appellate Tribunal is perverse as it had failed to Page 1 of 3

C/TAXAP/766/2018 ORDER consider the relevant material in the form of contents of the documents seized during the course of search and seizure, which by no stretch of imagination were dumb documents? [C] Whether the Appellate Tribunal has erred in law by not appreciating the import of provisions of Section 292C of the Act which raises the presumption regarding the correctness of entries in any DOCUMENTS seized and such presumption is not confined to entries in Books of Account as provided in Section 4 of the Evidence Act? [D] Whether the Appellate Tribunal has erred in law and on facts by not appreciating that income tax proceedings are based on the principles of preponderance of probability and not on the basis of proof beyond doubt? [E] Whether the Appellate Tribunal has erred in law and on facts by not relying on the evidentiary value of the primary documents (which were seized during the course of search and seizure) and wrongfully insisting

further

corroborative evidence?” 2. Heard Shri Manish R.Bhatt, learned Counsel appearing on behalf of the appellant and Shri B.S.Soparkar, learned Advocate for the respondent. 3. Considering the impugned order passed by the Page 2 of 3

C/TAXAP/766/2018 ORDER learned ITAT, it appears and it is not in dispute that while passing the impugned order, the learned Tribunal has relied upon its earlier decision in the case of the very assessee, but with respect to earlier Assessment Year. It is reported that the decision of the Tribunal in the case of the very assessee, but with respect to the earlier Assessment Year, has been confirmed by the Division Bench of this Court vide order dated 12.02.2018 passed in Tax Appeal No.35 of 2018. The aforesaid is not disputed by Shri Bhatt, learned Counsel appearing on behalf of the appellant. 4. Under the circumstances, the issues involved in the present appeal are concluded against the Revenue in view of the binding decision of the Division Bench in the case of the very assessee, but with respect to the earlier Assessment Year in Tax Appeal No.35 of 2018. Under the circumstances, no substantial question of law arises. The present appeal deserves to be dismissed and it is accordingly dismissed. (M.R. SHAH, J) (A.Y. KOGJE, J) SHITOLE Page 3 of 3

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