COMMISIONER OF INCOME TEX vs. FATECHAND BHUSANIA H.U.F.

ilN THE HIGH COURT OF JUDICATURE OF CHHATTtSGARH AT BILASPUR I.T.A. N0. ^ /2002 ill APPELLANT ,// y JRESPONDENT ^/^<"' <<v\'1 /' ^:- £ommissioner oflncome Tax, j\Ay/ Bilaspur (C.G) ^7/'^' VERSUS y/^Q'' ni <y> ), Bhatapara, Dist.Raipur (C.G) APPEAL UNDER SECTION 260A OF INCOME TAX ACT, 1961 -i^ ./' !f

.^.'> f; & '^ BI f Ste,.. Efi:: £i . ''^^•il^s^ B B ^^vss^/^ K . HIGH COURT OF CHHATTISGARH AT BILASPUR CORAM: HON'BLE SHRI YATINDRA SINGH, C.J. HON'BLE SHRI PRASHANT KUMAR MISHRA, J. ITANo.22of2002 APPELLANT : Commissioner of Income Tax, Bilaspur. VERSUS RESPONDENT : Fatehchand Bhusania (HUF) APPEAL UNDER SECTION 260-A OF THE INCOME TAX ACT. 1961 Appearance: Shri Anand Dadariya, Advocate for the Appellant. Shri Shashank Dubey, Senior Advocate with Shri Anand Mohan Tiwari, Advocate for the Respondent. JUDGEMENT (15th April, 2014) 1. This is an appeal under section 260-A of the Income Tax Act, 1961 (the Act) by the Income Tax Department (the Department) against the order dated 15.01.2002 passed by the Income Tax Appellate Tribunal, Nagpur Bench, Nagpur (the Tribunal) in respect of Fatehchand Bhusania (HUF) (the Assessee) for the Assessment Year (the AY) 1995-1996. THE FACTS 2. The Assessee has a rice mill and is engaged in manufacturing and trading of rice. A search was conducted from 21.02.1995 to 24.02.1995 and in the search, stock of food-grains worth ^13,31,880/- was found. The Assessee also disclosed cash of ^12,00,007- during the search. The Department constructively seized food-grains worth ^5,84,380/-. 3. The Assessee filed its return on 31.03.1996 showing income of ^6,18,280/- and in this return, the disclosed amount of ^12,00,0/- was taken into account. 4. The Assessing Officer (the AO) by his order dated 25.03.1998 disallowed certain purchase on the ground that they were bogus purchase and added a sum of ^9,29,282/- to the income disclosed by the Assessee. This was on account of seven items mentioned in the order of the AO. The first four items relates to disallowance of purchase of paddy to the tune of ^3,30.693/-, unexplained purchase of rice to the tune of ^5,26,176/-,

...^^^i^* "??°^3 1 unexplained purchase of broken rice to the tune of 5f26,941/- and unexplained purchase of Konda to the tune of ^17,250/-. 5. Aggrieved by the order of the AO, the Assessee filed an appeal before the Commissioner of Income Tax (Appeals) (the CIT-A) in which he challenged the disallowances made by the AO in respect of the aforesaid four items. 6. The CIT-A deleted addition of ^50,OO/- from item-1 fe in respect of purchase of paddy and deleted ^10,000/- from item-4 ;e in respect of purchase of Konda. But deleted the addition made in respect of item-2 and 3 in toto namely in respect of purchase of rice and broken rice. 7. Aggrieved by the aforesaid order, the Department filed an-appeal before the Tribunal. The Assessee also filed a cross-appeal before the Tribunal. The Tribunal, by order dated 15.01.2002 dismissed the appeal and the cross-appeal. Hence, the present appeal by the Department. THE DECISION 8. We have heard counsel for the parties. 9. This appeal was admitted on 01.08.2006 on the following five questions of law: '(i) Whether on the facts and in the circumstances of the case, the Tribunal was legally justified in upholding the order of learned CIT(A) in allowing the relief by accepting additional evidence without giving opportunity to the Department against Law and principles of natural justice, when either in the course of search nor in the statements recorded under section 132(4), no evidence whatsoever was produced by the assesse to support his claim. (ii) Whether on the facts and in the circumstances of the case, the Tribunal was legally justified in upholding the order of learned CIT(A) in deleting the addition of Rs. 50,243/- made on account of unexplained purchase of 132.20 qtls. of paddy. aiei *";'

3 °\^ s (iii) Whether on the facts and circumstances of the case, the learned ITAT has erred in upholding the order of learned CIT(A) in deleting the addition of Rs. 5,26,176/- made on account of unexplained purchase of rice. (iv) Whether on the facts and in the circumstances of the case, the Tribunal was legally correct in upholding the order of learned CIT(A) in deleting the addition of Rs. 26,941/- made on account of unexplained purchase rice. (v) Whether the ITAT was justified in upholding the order of learned CIT(A) restricting the addition of Rs. 17.250/- made on account ofunexplained—-», purchase of Konda to Rs. 7,250/-.' 10. The CIT-A, after considering the evidence on record, held the entries to be bonafide. It is for this reason, that he deleted the additions made by the AO. The Tribunal has upheld the same. 11. The additions have been deleted by the CIT-A and affirmed by the Tribunal after considering the evidence and accepting the entries made in the books of the Assessee. These are the question of facts. There is no illegality in the order passed by the CIT-A and the Tribunal. All questions are answered against the Department and in favour of the Assessee. 12. The appeal has no merit. It is dismissed. Sd/- Chief Justice Sd./- Prashanf Kumar Mishra Judge Amit l?