Commissioner Of Income Tax vs. M/S Sanyukta Grih Nirman Sahakari Sansthan Maryadit

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ITA/28/2011HC Madhya Pradesh10 January 2014Bench: HON'BLE SHRI JUSTICE AJIT SINGH2 pages
For Petitioner: Sanjeev Tuli
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the additions made by the Assessing Officer were without any relevant material or evidence. It noted that the Assessing Officer had wrongly made additions without even stating that the advances made by the members of the respondent society were not genuine. The Tribunal also took into account that the Assessing Officer had not issued notices under section 133(6) of the Act to the members of the respondent. Therefore, the Commissioner and the Tribunal concluded that saddling the respondent with a tax burden was not justified. The Tribunal further observed that all the books and records maintained by the respondent were found to be in accordance with the norms and rules of a Cooperative Society. The learned counsel for the appellant (revenue) could not point out any illegality in the concurrent findings of the Commissioner and the Tribunal. The Tribunal found the findings to be well-founded and unassailable, and concluded that the appeal did not involve any substantial question of law. The appeal was accordingly dismissed summarily.

What were the facts?

The assessee, a Cooperative Housing Society providing developed housing lands to its members, is the respondent in this appeal. The revenue is the appellant. A search at R. K. Shukla's residence on November 2-3, 2004, yielded documents related to the assessee. Consequently, the assessee was issued a notice under section 153-C of the Income Tax Act, 1961. The Assessing Officer made additions for membership fee, admission fee, land development charges, land advances, and sundry creditors, treating these as unexplained credit. The assessee appealed to the Commissioner of Income Tax (Appeals), who deleted these additions by order dated November 18, 2008. The revenue appealed to the Income Tax Appellate Tribunal (ITAT), which dismissed the revenue's appeal by its order dated December 10, 2010. The present appeal is filed by the revenue against the ITAT's order.

What were the issues?

1. Whether the Tribunal erred in upholding the deletion of additions made by the Assessing Officer on account of membership fee, admission fee, land development charges, land advances, and sundry creditors, treating them as unexplained credit, contrary to the provisions of Section 153-C of the Income Tax Act, 1961? The assessee contended that the Commissioner and the Tribunal correctly deleted the additions because the Assessing Officer lacked relevant material or evidence. The assessee argued that the Assessing Officer made additions without establishing that the advances from members were not genuine and without issuing notices under section 133(6) to the members. The assessee also pointed out that its books and records were maintained as per cooperative society norms. The revenue argued that the additions were justified based on the documents found during the search and the subsequent assessment proceedings under section 153-C.

Which sections of the Income-tax Act were involved?

Section 153-C,Section 133(6),Section 260-A

AI-generated summary — verify with the full judgment below

ITA No.28/2011 10.1.2014

Shri Sanjay Lal, Advocate, for the appellant.

Heard on admission.

This appeal, under section 260-A of the Income Tax Act 1961 (in short, “the Act”), is directed against the order dated 10.12.2010 passed by the Income Tax Appellate Tribunal, Indore Bench (in short, “the Tribunal”) whereby it has dismissed the appellant’s appeal and confirmed the order dated 18.11.2008 as passed by the Commissioner of Income Tax (Appeals).

The assesse is a Cooperative Housing Society and is engaged in providing developed housing lands to its members. A search and seizure operation under section 132(1) of the Act was carried out on 2nd and 3rd November 2004 at the residence of R. K. Shukla in Bhopal wherein certain documents relating to the respondent were found and seized. Thereafter, the respondent was issued notice under section 153-C of the Act for the assessment proceedings. The Assessing Officer made an addition for membership fee, admission fee, land development charges, land advances and sundry creditors by treating all the transactions as unexplained credit. The assessment order in this regard is dated 21.12.2006. Aggrieved, the respondent filed an appeal before the Commissioner of Income Tax (Appeals). The aforesaid additions were deleted by order dated 18.11.2008. The appellant challenged the order dated 18.11.2008 in an appeal before the Tribunal but it too has been dismissed by the impugned order.

Both Commissioner and the Tribunal have held that the additions made by the Assessing Officer were without any relevant material or evidence and he even without saying that the advances made by the members of respondent were not genuine had wrongly made the addition. They even took note of the fact that Assessing Officer had also not issued notices under section 133(6) of the Act to the members of the respondent. The Commissioner and Tribunal, therefore, held that saddling the respondent with tax burden was not justified. Also, all the books and records maintained by the respondent were found to be as per the norms/rules of the Cooperative Society. The learned counsel for appellant could not point out any illegality in the concurrent findings arrived at by the Commissioner and the Tribunal. The findings are well-founded and unassailable. The appeal does not involve any substantial question of law. It is accordingly dismissed summarily.

(AJIT SINGH)

(SUBHASH KAKADE) JUDGE

JUDGE

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