C I T JAIPUR vs. M/S RAJARAM AND PARTY

1 D.B.INCOME TAX APPEAL NO. 2/2011 & D.B. INCOME TAX APPEAL NO. 394/2011 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN JAIPUR BENCH, JAIPUR JUDGMENT (1) D.B. INCOME TAX APPEAL NO. 2/2011 COMMISSIONER OF INCOME TAX-I, JAIPUR VS. M/S. RAJARAM & PARTY, JAIPUR. AND (2) D.B. INCOME TAX APPEAL NO. 394/2011 COMMISSIONER OF INCOME TAX-I, JAIPUR VS. M/S. RAJARAM & PARTY, JAIPUR. Date: 03.07.2012 HON'BLE THE CHIEF JUSTICE MR. ARUN MISHRA HON'BLE MR. JUSTICE NARENDRA KUMAR JAIN-I Mr. J.K. Singhi, Senior Counsel assisted by Mr. Anuroop Singhi, for the appellant. Heard on question of admission. The question raised in the present appeals is with respect to deletion of addition of Rs. 16,00,000/-, which was made by the Assessing Officer under Section 68 of the Income Tax Act, 1961(hereinafter referred to as 'the Act'). CIT(A) has referred to the various facts and material available on record. 8 persons had withdrawn a sum of Rs. 1,13,325/- each through D.D.s on 27.10.1994 from M/s. Sadasukh Manakchand Bikaner. These D.D.s were deposited in Union Bank of India, Jaipur on 09.12.1994. On 13.12.1994, the amount was withdrawn in cash and again on 05.12.1994, Rs. 1,13,065/- was drawn by each of 8 persons through D.D.s from

2 D.B.INCOME TAX APPEAL NO. 2/2011 & D.B. INCOME TAX APPEAL NO. 394/2011 M/s. Sadasukh Manakchand and were deposited in their respective bank accounts on 13.12.1994. On 15.12.1994 cash was drawn to start some business jointly. Since the business could not be started, all these 8 persons re-deposited Rs. 2 Lacs each in their bank accounts on 21.02.1995 and issued cheques in the name of AOP. The CIT(A) Bikaner found the deposits made by these 8 persons in M/s. Sadasukh Manakchand , Bikaner as genuine. CIT(A) Bikaner, after examining the facts at length, held that investments made by these 8 persons and others in M/s. Sadasukh Manakchand are genuine and quashed the second notice issued under Section 148 of the Act. The appeal against the order of CIT(A) filed by the department was rejected by ITAT Jodhpur Bench. Considering the facts and findings of CIT(A) Bikaner in the case of Sh. Amarchand Rathi Prop. M/s. Sadasukh Manakchand Bikaner as well as Jodhpur Bench of ITAT in that case, capital contribution by these 8 persons was accepted as genuine in A.Y. 1996-97 by the AO, it was requested that addition of Rs. 16 Lacs may be deleted. CIT(A) has considered the fact that the deposits of Rs. 2 Lacs each by the 8 persons to these bank accounts were made from withdrawals from M/s. Sadasukh Manakchand Bikaner, who was an existing assessee at Bikaner at the relevant time. All these 8 persons were members of AOP in subsequent years, therefore, it cannot be said that their identity is not established. The source of deposits has also been found to be explained by the CIT(A). The CIT(A) has accepted that these 8 persons have been filing returns of income and they

3 D.B.INCOME TAX APPEAL NO. 2/2011 & D.B. INCOME TAX APPEAL NO. 394/2011 were assessed to tax. Confirmations were filed before the AO. Thus, addition of Rs. 16 Lacs was deleted. As a sequal thereto ground No. 2 of the appeal was decided in favour the assessee. Against the order passed by the CIT(A), an appeal was preferred by the Revenue and cross objection was preferred by the assessee before the ITAT. The finding recorded by CIT(A), is based upon the evidence and material available on record, has been affirmed by the ITAT and appeal of the Revenue has been dismissed and cross objection filed by the assessee has been allowed. Being aggrieved with the same, the Revenue has preferred instant appeals. Since the matter involved in the instant appeals is same, hence, the appeals are being decided by this common judgment. Mr. J.K. Singhi, Senior Counsel appearing on behalf of the Revenue has submitted that deletion of Rs. 16 Lacs was not warranted, the order passed by the Assessing Officer was appropriate. Assessee has failed to explain the income and the source of the said amount. In view of the facts which have been found by the CIT(A), aforesaid submission raised by counsel appearing on behalf of the appellant cannot be entertained. Deposit of the amount has been found to be explained by the CIT(A) for the various reasons which have been mentioned in the order passed by the CIT(A). The amount was deposited through D.D.s in the bank accounts of each of 8 persons twice-once on 09.12.1994 and again on 13.12.1994. Identity of these persons as well as source of deposit has been found to be

4 D.B.INCOME TAX APPEAL NO. 2/2011 & D.B. INCOME TAX APPEAL NO. 394/2011 established. It cannot be said that findings of facts recorded by CIT(A) are not based on evidence. There was evidence on record and findings of facts have been recorded by the CIT(A), which have been affirmed by ITAT. Counsel appearing on behalf of the appellant was unable to show that concurrent findings of facts recorded by CIT(A) as well as ITAT are perverse and not based upon any evidence or could not have been arrived at by a person of prudence acting in reasonable manner. We find that no substantial question of law is involved in the instant appeals and the same are, accordingly, dismissed.

(NARENDRA KUMAR JAIN-I),J. (ARUN MISHRA),CJ. Manoj “All corrections made in the judgment/order have been incorporated in the judgment/order being emailed.” MANOJ NARWANI JUNIOR PERSONAL ASSISTANT.