Commissioner Of Income Tax vs. Shri Pawan Kumar Jain

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ITA/109/2014HC Madhya Pradesh06 August 2014Bench: HON'BLE SHRI JUSTICE RAJENDRA MENON3 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that both the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal had concurrently found that the Assessing Officer had rejected entries in the books of account on grounds of irregularity. However, the Appellate Authority noted that the books of account were verified by the Commercial Tax Officer, purchases were accepted, and taxes were recovered. The irregularities pointed out were duly verified and purchases approved. Interference was made, granting a deduction of Rs. 27,94,647. Similarly, regarding the addition of profit, the Tribunal found no justifiable reason for disallowing the books of account, stating the Assessing Officer proceeded on assumption and presumption. The concurrent findings of the lower authorities were in accordance with the law after due consideration of books of account and documents. Therefore, no substantial question of law was involved, warranting reconsideration.

What were the facts?

This is a revenue appeal filed under Section 260-A of the Income Tax Act, 1961, challenging the concurrent orders of the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal. The assessee, a government contractor and builder, filed a return for assessment year 2007-08 declaring an income of Rs. 7,05,220. The Assessing Officer completed the assessment under Section 143(3) on December 11, 2009, assessing income at Rs. 62,16,040 by disallowing benefits under Section 40(a)(ia) and making additions to net profit. The CIT(A) allowed relief of Rs. 53,24,377. Cross objections were filed, and the ITAT upheld the CIT(A)'s order, leading to this appeal.

What were the issues?

1. Whether there is a substantial question of law arising from the concurrent findings of the CIT(A) and the ITAT regarding the disallowance of benefits under Section 40(a)(ia) and additions to net profit for assessment year 2007-08. Assessee's Contentions: The judgment does not record specific contentions made by the assessee. However, the outcome suggests the assessee argued for the acceptance of their books of account and the deductions claimed. Revenue's Contentions: The revenue's appeal implies a contention that the Assessing Officer's disallowances and additions were justified, and the lower appellate authorities erred in granting relief. The revenue likely argued that the irregularities in the books of account and the basis for net profit calculation warranted the Assessing Officer's actions.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 143(3),Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

ITA NO.109/2014 06/08//2014 Shri S.A.Dharmadhikari, learned counsel for the appellant. This is a revenue appeal under Section 260-A of the Income Tax Act, 1961. Calling in question the concurrent orders passed by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal in the matter of allowing certain deductions to the respondent assessee for the assessment year 2007-08. The assessee is a Govt. contractor and builder. For the assessment year 2007-08 he filed return of income on 31-10- 2007 declaring income of Rs.7,05,220/-. The assessment was completed under section 143(3) of the Income Tax Act and on 11-12-2009, an order of assessment was passed assessing income of Rs.62,16,040/- after making addition on account of disallowing benefits under section 40(a)(ia) and net profit and on an appeal being filed by the assessee before the Commissioner of Income Tax (Appeals) Jabalpur, the Appellate Authority vide order dated 14-12-2011 allowed the relief to the extent of Rs.53,24,377/- and calculated net profit at a particular rate. Challenging the order of the Commissioner of Income Tax (Appeals), cross objections were filed by the assessee and the department and the order of the appellate authority has been upheld by the Income Tax Appellate Tribunal and therefore, this appeal. On going through the record, we find that both Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal found that the Assessing Officer has evaluated the matter and has rejected the entries made in the books of account on the ground that they are irregular. The Appellate Authority found that the books of account were verified by the Commercial Tax Officer and purchases made were accepted and taxes were recovered Finding that the irregularities said to have been pointed out in the books of accounts were duly verified and purchases were approved by the Commercial Tax Officer interference has been made granting deduction to the assessee to the extent of Rs.27,94,647/-. Similarly in the matter of addition of profit it has been found that no justifiable reason for disallowing books of accounts has been given and merely on assumption and presumption, the Assessing Officer proceeded in the matter. The concurrent findings recorded by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal is in accordance to the requirement of law after due consideration of the books of account and other documents and therefore, no substantial question of law involved in the matter warranting reconsideration. The appeal, therefore, stands dismissed.

(RAJENDRA MENON) (SUSHIL KUMAR GUPTA ) JUDGE JUDGE hsp

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