CC I T BIKANER vs. M/S G P TAPARIA

ITA/155/2007HC RajasthanRJHC01017427200519 February 2014Bench: DINESH MAHESHWARI,BANWARI LAL SHARMA2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal, holding that the substantial questions of law were squarely covered by its own previous judgments. Specifically, the Court referred to D.B. Income Tax Appeal No.78/2006 (for AY 1993-94) and D.B. Income Tax Appeal No.80/2002. The reasoning was that the previous judgments had already dealt with similar issues concerning the same assessee and had affirmed the ITAT's view that such transactions were outside the scope of Sections 269-SS and 269-T. The Court found that the controversy in the present case was identical to that decided in the earlier appeals. Therefore, the framed questions were answered against the Revenue and in favour of the assessee. The appeal was dismissed.

What were the facts?

This is an appeal by the Revenue against an order of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 1994-95. The ITAT had held that cash transactions between the assessee and its sister concern, operating from the same premises with common partners and a principal partner, were not subject to Sections 269-SS and 269-T of the Income Tax Act, even though interest was charged. The Revenue challenged this finding. The High Court noted that a similar order for Assessment Year 1993-94 concerning the same assessee had been affirmed by the High Court itself in a previous appeal (D.B. Income Tax Appeal No.78/2006), which in turn relied on another High Court judgment (D.B. Income Tax Appeal No.80/2002) that had affirmed an ITAT order.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the learned Tribunal was right in holding that cash transactions between the assessee and its sister concern, despite interest being charged, were beyond the purview of Sections 269-SS and 269-T of the Income Tax Act, given they shared the same premises and had common partners? 2. Whether, if the answer to the first question is in the negative, the Tribunal was justified in holding that no penalty was leviable? Assessee's Contention: Not explicitly recorded, but implied by the ITAT's favorable ruling. Revenue's Contention: The Revenue argued that the cash transactions, even between related entities under the same roof with common partners and charging interest, should have been covered by Sections 269-SS and 269-T, and consequently, penalty should be leviable.

Which sections of the Income-tax Act were involved?

Section 269-SS, Section 269-T

AI-generated summary — verify with the full judgment below

ITA No.155/2007 1 D.B.INCOME TAX APPEAL NO.155/2007 CIT, Bikaner Vs. M/s G.P.Taparia, Nokha DATE OF JUDGMENT : 19th February 2014 HON’BLE MR. JUSTICE DINESH MAHESHWARI HON’BLE MR. JUSTICE BANWARI LAL SHARMA Mr.K.K.Bissa for the appellant Mr.Lokesh Mathur for the respondent BY THE COURT: This appeal by the Revenue against the order dated 03.08.2004, as passed by the Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur [‘ITAT’] in ITA Nos. 11 & 12/JDPR/2000 for the Assessment Year 1994-95 has been admitted for consideration on the following substantial questions of law:- “(i) Whether on the fact and in the circumstances of the case and in law, the learned Tribunal was right in holding all the cash transactions between the assessee and its sister concern situated under the same roof and the partners being members of the family and the principal partner of both the firms being the same person, beyond the purview of Sec.269-SS and 269(5) of the Income Tax Act even if interest was charged on such transactions? (ii) Whether in the facts and circumstances of the case, if the answer to question No.1 is in negative, the Tribunal was justified in holding that no penalty was still leviable?” The impugned order dated 03.08.2004 has been passed by the ITAT in this case with reference to its order dated 27.02.2004 passed in relation to the same assessee in ITA Nos.2139 & 2140/JP/96 for the Assessment Year 1993-94. It is informed that the said order dated 27.02.2004 has been affirmed by this Court while dismissing the appeal filed by the Revenue, being D.B. Income Tax Appeal No.78/2006, decided on 21.08.2008. It is also informed by the learned counsel for the parties that the said order dated 27.02.2004 was passed by the ITAT on the basis of its order dated 27.03.2002, as passed in ITA No.2145/1996

ITA No.155/2007 2 which was considered and affirmed by this Court in D.B. Income Tax Appeal No.80/2002, decided on 26.07.2007. The said D.B. Income Tax Appeal No. 78/2006 relating to the same assessee for the Assessment Year 1993-94 has been dismissed by this Court with a short order that reads as under:- “Heard learned counsel for the parties. The learned Tribunal, in this case, has passed the impugned judgment on the basis of its other judgment dated 27.03.2002, passed in Income Tax Appeal No.2145 of 1996 – ITO Vs. Maheshwari Nirman Udhyog. We are informed that,that judgment has been affirmed, in appeal, by this Court on 26.07.2007, in the judgment reported in 211 CTR 579. This position is not disputed by the learned counsel for the revenue. That being the position, to say the least, the controversy, involved in the present case, is squarely covered by the judgment of this Court, reported in Commissioner of Income Tax Vs. Maheshwari Nirman Udhyog, and appeal is decided against the revenue, and in favour of the assessee. Resultantly, the appeal, is dismissed, for the aforesaid reasons.” In fact, it is noticed that the present appeal was ordered to be connected with DB Income Tax Appeal No.78/2006 but appears to have got de-linked. The aforesaid being the position and the relevant issues having been considered and decided by this Court in the aforesaid D.B. Income Tax Appeal No.80/2002; and following which, the other appeal of the Revenue concerning the same assessee and said to be involving akin issues, being D.B. Income Tax Appeal No. 78/2006, having also been dismissed by this Court, we are clearly of the view that the framed questions in this appeal are required to be answered against the Revenue and in favour of the assessee. Consequently, this appeal stands dismissed. (BANWARI LAL SHARMA),J.

(DINESH MAHESHWARI),J. MK

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