COMMISSIONER OF INCOME TAX vs. SANDEEP PODDAR PROP.

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ITA/513/2006HC Punjab & HaryanaPHHC01075244200629 March 2016Bench: MR. JUSTICE RAMENDRA JAIN,MR. JUSTICE JITENDRA CHAUHAN3 pages
AI SummaryWithdrawn

What did the High Court hold?

The Revenue, through its counsel, submitted that in view of CBDT Circular No. 21/2015 dated 10.12.2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, it did not wish to press the present appeal as the tax effect involved was less than Rs. 20 lacs. The Revenue prayed for liberty to file an application for revival of the appeal if something survived therein. The Court dismissed the appeal as not pressed with the liberty as prayed for. It was clarified that the withdrawal of the appeal by the Revenue would not be taken as an affirmation of the Tribunal's order on merits. The legal issues claimed by the Revenue were left open to be adjudicated in an appropriate case. No specific findings were given on the substantial questions of law raised by the Revenue.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Chandigarh-II (the Revenue) against an order dated 24.02.2006 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench. The ITAT's order pertained to ITA Nos. 1202 and 1235/CHANDI/2004 for the assessment year 2001-02. The appeal was filed under Section 260A of the Income Tax Act, 1961. The assessee is Sh. Sandeep Poddar. The Revenue sought to challenge the ITAT's findings on several grounds concerning the assessee's business activities, the location of business, manufacturing of computers, publication of books, and additions made by the Assessing Officer.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the ITAT was justified in holding that the assessee was carrying on business of assembly of computers and publication of books at Parwanoo without reliable evidence, ignoring material on record? 2. Whether the ITAT was justified in concluding that the assessee was carrying on business at Shed No.90, Sector 1 Parwanoo, based on certificates with different addresses, none of which was Shed No.90, Sector-1, Parwanoo? 3. Whether the ITAT was justified in holding that manufacturing of 167 computers took place and allowing deduction under Section 80-IA, despite the absence of essential parts like SMPS, CPU, or HDD? 4. Whether the ITAT was justified in allowing deduction under Section 80-IA for publication of books, considering the assessee was not a publisher and got printing done elsewhere? 5. Whether the ITAT was justified in deleting an addition of Rs.14,86,015/- on account of bogus purchases on a basis not forming part of the assessee's grounds of appeal, rendering the action un-jurisdictional? 6. Whether the ITAT was justified in setting aside the addition for disallowance under Section 40A(3) by remanding the case to the Assessing Officer, when the assessee failed to furnish party addresses and submitted additional evidence before the CIT(A) without reason, contrary to Rule 46A and despite opportunities from the AO? The Revenue argued that the ITAT's findings were not based on reliable evidence and ignored material on record. The Revenue also contended that the certificates relied upon by the ITAT had discrepancies in addresses and that essential components for manufacturing were missing. Furthermore, the Revenue argued that the ITAT's decision on bogus purchases was un-jurisdictional and that the remand on Section 40A(3) was improper due to procedural lapses by the assessee. The judgment does not record specific arguments from the assessee's side on these issues.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80-IA,Section 40A(3)

AI-generated summary — verify with the full judgment below

ITA No. 513 of 2006 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 513 of 2006 (O&M) Date of Decision: 29.03.2016 Commissioner of Income Tax, Chandigarh-II .......Appellant Versus Sh. Sandeep Poddar Prop. ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Ms. Urvashi Dhugga, Senior Standing counsel for the appellant. RAJESH BINDAL,J. This appeal has been filed under Section 260 A of the Income Tax Act, 1961 (for short 'the Act'), against the order dated 24.2.2006 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (B), in ITA Nos.1202 and 1235/CHANDI/2004, for the assessment year 2001-02, raising the following substantial questions of law: (i) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT is justified in holding that the assessee was carrying its business of assembly of computer and publication of books at Parwanoo in absence of any reliable and cogent evidence by ignoring the material and evidence on record? (ii) Whether on the facts and circumstances of the REEMA SAINI 2016.04.04 13:52 I attest to the accuracy and authenticity of this document High Court, Chandigarh

ITA No. 513 of 2006 (O&M) -2- case, the Hon'ble ITAT is justified in arriving the conclusion that the assessee was carrying business at Shed No.90, Sector 1 Parwanoo on the basis of certificates from different authorities and all the certificates contain different addresses of assessee and none of the certificate carry the address of Shed No.90, Sector-1, Parwanoo? (iii) Whether on the facts and circumstances of the case, the Hon'ble ITAT is justified in holding that manufacturing has also taken place in respect of 167 computers when parts like SMPS, CPU or HDD for manufacturing a computer were not available which is essential for manufacturing of computer and allowing deduction u/s 80-IA of the I.T. Act, 1961? (iv) Whether on the facts and circumstances of the case, the Hon'ble ITAT is justified in allowing deduction u/s 80-IA in holding that publication of books is manufacturing when assessee is not a publisher and is getting it printed from the places where no deduction u/s 80-IA is available? (v) Whether on the facts and circumstances of the case, the Hon'ble ITAT is justified in deleting the addition of Rs.14,86,015/- on account of bogus purchase on different conclusion and adopting a different basis which was not the ground of appeal of the assessee and is an action un-jurisdictional? (vi) Whether on the facts and circumstances of the case, the Hon'ble ITAT is justified in setting aside the addition in resorting the case to the file of the AO on the issue of disallowance u/s 40A(3) when the assessee failed to furnish the address of the party and the additional evidences were furnished before the CIT (A) for the first time without giving any REEMA SAINI 2016.04.04 13:52 I attest to the accuracy and authenticity of this document High Court, Chandigarh

ITA No. 513 of 2006 (O&M) -3- reason for its admission, in contravention of Rule 46A of the I.T. Rules, 1962 and despite number of opportunities granted by the AO during the course of assessment? Learned counsel for the appellant-revenue submitted that in view of circular No.21/2015 dated 10.12.2015 read with circular No.279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by Central Board of Direct Taxes, she does not wish to press the present appeal, as the tax effect involved is less than ` 20 lacs. However, she prays that liberty be granted to the revenue to file an application for revival of the appeal in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the appeal by the revenue shall not be taken as affirmation of order of the Tribunal on merits. The legal issue as claimed by the revenue is left open to be adjudicated in an appropriate case. (RAJESH BINDAL)

JUDGE (HARINDER SINGH SIDHU) 29.03.2016 JUDGE reema REEMA SAINI 2016.04.04 13:52 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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