THE DEPUTY COMMISSIONER OF INCOME TAX vs. M/S KOTA DALL MILL

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 63/2019 The Deputy Commissioner Of Income Tax, Central Circle, Kota ----Appellant Versus M/s Kota Dall Mill, C-Block, Multymetals Ltd. Campus, 6/7, Heavy Industrial Area, Consua Road, Kota ----Respondent Connected With D.B. Income Tax Appeal No. 58/2019 The Deputy Commissioner Of Income Tax, Central Circle, Kota ----Appellant Versus M/s Kota Dall Mill, C-Block, Multymetals Ltd. Campus, 6/7, Heavy Industrial Area, Consua Road, Kota ----Respondent D.B. Income Tax Appeal No. 59/2019 The Deputy Commissioner Of Income Tax, Central Circle, Kota ----Appellant Versus M/s Kota Dall Mill, C-Block, Multymetals Ltd. Campus, 6/7, Heavy Industrial Area, Consua Road, Kota ----Respondent D.B. Income Tax Appeal No. 61/2019 The Deputy Commissioner Of Income Tax, Central Circle, Kota ----Appellant Versus M/s Kota Dall Mill, C-Block, Multymetals Ltd. Campus, 6/7, Heavy Industrial Area, Consua Road, Kota ----Respondent D.B. Income Tax Appeal No. 62/2019 The Deputy Commissioner Of Income Tax, Central Circle, Kota ----Appellant Versus

(2 of 8) [ITA-63/2019] M/s Kota Dall Mill, C-Block, Multymetals Ltd. Campus, 6/7, Heavy Industrial Area, Consua Road, Kota ----Respondent D.B. Income Tax Appeal No. 74/2019 The Principal Commissioner Of Income Tax (Central), Jaipur ----Appellant Versus M/s Multimetals Limited, Plot No. 6 And 7, Heavy Industrial Area, Kansua Road, Kota, ----Respondent D.B. Income Tax Appeal No. 77/2019 The Principal Commissioner Of Income Tax (Central), Jaipur ----Appellant Versus M/s Multimetals Limited, Plot No. 6 And 7 Heavy Industrial Area, Kansua Road, Kota ----Respondent D.B. Income Tax Appeal No. 103/2019 The Principal Commissioner Of Income Tax, (Central), Jaipur ----Appellant Versus M/s Oriental Power Cables Ltd., Nh-12, Cable Nagar, Po Cable Nagar, Kota-325003 (Raj) ----Respondent D.B. Income Tax Appeal No. 105/2019 The Principal Commissioner Of Income Tax, (Central), Jaipur ----Appellant Versus M/s Oriental Power Cables Ltd., Nh-12, Cable Nagar, Po Cable Nagar, Kota-325003 (Raj) ----Respondent D.B. Income Tax Appeal No. 106/2019 The Principal Commissioner Of Income Tax, (Central), Jaipur ----Appellant Versus

(3 of 8) [ITA-63/2019] M/s Oriental Power Cables Ltd., Nh-12, Cable Nagar, Po Cable Nagar, Kota-325003 (Raj) ----Respondent D.B. Income Tax Appeal No. 107/2019 The Principal Commissioner Of Income Tax, (Central), Jaipur ----Appellant Versus M/s Oriental Power Cables Ltd., Nh-12, Cable Nagar, Po Cable Nagar, Kota-325003 (Raj) ----Respondent D.B. Income Tax Appeal No. 108/2019 The Principal Commissioner Of Income Tax, (Central), New Central Revenue Building, Statue Circle, Jaipur ----Appellant Versus M/s Edila Business World Pvt. Ltd., 6 And 7, Heavy Industrial Area, C-Block, Multimetal Limited Campus, Kansua Road, Large Scale Industrial Area, Kota ----Respondent D.B. Income Tax Appeal No. 109/2019 The Principal Commissioner Of Income Tax, (Central) New Central Revenue Building, Statue Circle, Jaipur ----Appellant Versus M/s Edila Business World Pvt. Ltd., 6 And 7, Heavy Industrial Area, C-Block, Multimetal Limited Campus, Kansua Road, Large Scale Industrial Area, Kota ----Respondent D.B. Income Tax Appeal No. 113/2019 The Principal Commissioner Of Income Tax, (Central) New Central Revenue Building, Statue Circle, Jaipur ----Appellant Versus M/s Tirupati Balaji Estates Pvt. Ltd., Plot No. 6 And 7, C-Block, Multimetals Limited Campus, Kansua Road, Large Scale Industrial Area, Kota ----Respondent

(4 of 8) [ITA-63/2019] D.B. Income Tax Appeal No. 114/2019 The Principal Commissioner Of Income Tax, (Central) New Central Revenue Building, Statue Circle, Jaipur ----Appellant Versus M/s Hadoti Punj Vikas Ltd., C-Block, 6/7, Multimetals Campus, Large Scale Industrial Area, Kota Rajasthan ----Respondent D.B. Income Tax Appeal No. 115/2019 The Principal Commissioner Of Income Tax, (Central) New Central Revenue Building, Statue Circle, Jaipur ----Appellant Versus M/s Tirupati Balaji Estates Pvt. Ltd., Plot No. 6 And 7, C-Block, Multimetals Limited Campus, Kansua Road, Large Scale Industrial Area, Kota ----Respondent D.B. Income Tax Appeal No. 116/2019 The Principal Commissioner Of Income Tax, (Central) New Central Revenue Building, Statue Circle, Jaipur ----Appellant Versus M/s Rajasthan Cable Industries Ltd., 4 And 12, Large Scale, Industrial Area, Kansua Road, Kota ----Respondent D.B. Income Tax Appeal No. 162/2019 The Principal Commissioner Of Income Tax, New Central Revenue Building, Rawat Bhata Road, Kota ----Appellant Versus M/s Resonant Wealth Consultancy Pvt. Ltd., 69/331, V.t. Road, Mansarovar, Jaipur Rajasthan ----Respondent For Appellant(s) : Mr. Anil Mehta, Sr. Adv. with Mr. Siddharth Bapna through VC For Respondent(s) : Mr. Sanjay Jhanwar, Sr. Adv. with

(5 of 8) [ITA-63/2019] Mr. Rajat Sharma through VC HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE SUDESH BANSAL Judgment 08/02/2022 There are defects in some of the appeals. The same are waived. D.B. Civil Misc. Application Nos.1799/2019 in D.B. ITA No.114/2019

and

D.B.

Civil

Misc.

Application Nos.1800/2019 in D.B. ITA No.116/2019:- For the reasons stated in the applications and those made out before us during the course of arguments, delay caused in filing these appeals is condoned. Applications stand disposed of. D.B. Civil Misc. Application Nos.69776/2019, 69780/2019, 70920/2019, 70927/2019, 48922/2019, 48935/2019, 63367/2019 and 64456/2019:- Since certified copy of the impugned judgment of the tribunal which is common in several appeals is filed in one of them, request for dispensing with filing certified copies in all the appeals is granted. The applications are disposed of. D.B. Income Tax Appeal Nos.63/2019, 58/2019, 59/2019, 61/2019, 62/2019, 74/2019, 77/2019, 103/2019, 105/2019, 106/2019, 107/2019, 108/2019, 109/2019, 113/2019,

114/2019,

115/2019,

116/2019

and 162/2019:- These appeals involve the same group of assessees and arise out of search action carried out by the revenue against the group. Due to commonality of facts, we may refer to the material produced in D.B. Income Tax Appeal No. 63/2019. The appeal is filed by the department to challenge the judgment of the Income Tax Appellate Tribunal. Following questions are presented for our consideration:-

(6 of 8) [ITA-63/2019] 1. Whether, on the facts and in the circumstances of the case the Hon’ble ITAT was justified in deleting the addition made by the assessing officer under Section 68 of the Income Tax Act, 1961 on account of unexplained unsecured loans obtained by the assessee? 2. Whether, on the facts and in the circumstances of the case the Hon’ble ITAT was justified in upholding the order of the CIT (A) deleting the additions made on account of unsecured loans by observing that the alleged lenders were not shell companies without even considering the financial statements of these companies? 3. Whether, on the facts and in the circumstances of the case the Hon’ble ITAT was justified in upholding order of the CIT (A) on account of unexplained partners capital receipts from alleged partners by observing that the burden cast upon the assessee under section 68 of the Income Tax Act, 1961 to explain the nature and source of transaction has been discharged? 4. Whether, on the facts and in the circumstances of the case the Hon’ble ITAT was justified in upholding order of CIT (A) in deleting the addition of partners capital despite the fact that the alleged partners were never produced before the learned assessing officer for examination? 5. Whether, on the facts and in the circumstances of the case the Hon’ble ITAT was justified in holding the additions made during reassessment proceedings

under

Section-153A

be unsustainable on the ground that reassessment under Section-153A could not have been made on the basis of information/report of the Information Wing, Kolkata? Though, five different questions are framed, the central issue is one, namely, the deletion of the addition made by the assessing officer under Section 68 of the Income Tax Act, 1961 (for short ‘the Act’). We may record that the assessing officer having made such additions, in appeal filed by the assessee, the Commissioner (Appeals) had deleted the same. Thus revenue was in appeal before the tribunal. The tribunal had dismissed the revenue’s appeal. Thus, there are concurrent findings by the CIT (Appeals) and the tribunal in favour of the assessee.

(7 of 8) [ITA-63/2019] Further, perusal of rather long order passed by the tribunal, we find that the conclusions are based on assessment of evidence on record. All these findings are thus purely factual in nature. The tribunal confirmed the view of the CIT (Appeals) that the additions made by the assessing officer were not sustainable. It was observed that the companies through which the assessees had indulge into bogus accommodation entries, were not managed or controlled by Mr. Anand Sharma, who was supposed to be the kingpin. Further, it was observed that there was no link found in the documents and the financial statements of the companies concerned. It was noted that the assessee had produced the affidavit and the notices issued by the assessing officer under Section 131 and 133(6) of the Act which was duly complied by the creditors. The statement of director of Ms. Royal Crystal Dealers Pvt. Ltd. was also recorded by the assessing officer while the director has confirmed the transaction of loan. The tribunal further observed that the assessment order was passed solely on the report of the Investigation Wing, Kolkata which merely contained the narration of the statements recorded during the investigation and the assessing officer had in his possession only the statement of Anand Sharma. The tribunal was of the opinion that the assessing officer could not have made the additions in the hands of the assessee on the basis of the Investigation Wing at Kolkata to which the assessee was not privity to. The assessee was also not granted opportunity to cross-examine the persons whose statements were recorded by the investigation wing. We are informed that in some of the cases the tribunal has also held that the reassessment was invalid this was an additional ground to delete the additions. Since in relation to the deletion of

(8 of 8) [ITA-63/2019] additions no question of law arises, we have not examined the correctness of the view of the tribunal on the question of validity of the reassessment. Under the circumstances we do not find any reason to entertain these appeals since no question of law arises. All appeals are dismissed. Pending applications, if any, are also disposed of. (SUDESH BANSAL),J (AKIL KURESHI),CJ BRIJ MOHAN GANDHI/16-33