Commissioner Of Incomet Tax vs. M/S Heeralal Kacharmal

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ITA/91/2005HC Madhya Pradesh02 January 2014Bench: HON'BLE SHRI JUSTICE SHANTANU KEMKAR2 pages
For Petitioner: Ap.Patankar,Cl.Pal /
AI SummaryDismissed

What did the High Court hold?

The Tribunal was justified in deleting the addition of Rs. 4,45,640/-. The High Court observed that the Tribunal had considered this issue and found that the partners of the respondent-firm had already disclosed the stock of silver in their individual returns filed under the Amnesty Scheme. These individual returns were accepted in the assessments made under Section 143(1) of the Act on 20.03.1988. Since the excess stock was disclosed by the partners individually and accepted by the Revenue, the same income could not be taxed again in the hands of the assessee-firm. The High Court found no substance in the Revenue's appeal, concluding that the assessment under Section 143(1) had become final and the stock was correctly assessed in the hands of the partners, making the firm not liable for tax on the same amount.

What were the facts?

This Indian ITAT judgment concerns Income Tax Appeal No. 91/2005, filed by the Revenue against an order dated 28.01.2005 passed by the Income Tax Appellate Tribunal, Indore Bench in ITA No. 976/Ind/98. The appeal challenges the Tribunal's deletion of an addition of Rs. 4,45,640/- made by the Revenue. This addition pertained to undisclosed stock of silver detected during a survey under Section 133-A of the Income Tax Act, 1961, in the case of the respondent-firm. The Revenue's appeal is against the Tribunal's decision to exclude this amount from the firm's taxable income.

What were the issues?

1. Whether the Tribunal was justified in law in deleting the addition of Rs. 4,45,640/- in respect of undisclosed stock of silver detected during a survey under Section 133-A of the Income Tax Act, 1961, in the hands of the respondent-firm. Assessee's Contention: The judgment does not record any specific arguments made by the assessee (respondent-firm) before the Tribunal or the High Court. The High Court's decision appears to be based on its own perusal of the record and the Tribunal's order. Revenue's Contention: The Revenue argued that the Tribunal was not justified in deleting the addition of Rs. 4,45,640/- made in respect of undisclosed stock of silver detected during the survey under Section 133-A of the Act. The Revenue contended that this amount represented concealment and should be taxed in the hands of the firm.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 133-A,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appeal No.91/2005 02.01.2014 Shri R.L. Jain, learned Senior Counsel with Ms. Veena Mandlik, learned counsel for the appellant. Heard on the question of admission. This appeal under Section 260-A of the Income Tax Act, 1961 (for short, the Act) is directed against the order dated 28.01.2005 passed by the Income Tax Appellate Tribunal, Indore Bench (for short, the Tribunal) in ITA No.976/Ind/98. The learned Senior Counsel for the appellant has argued that the Tribunal was not justified in law in deleting the addition of Rs.4,45,640/- in respect of undisclosed stock of silver, which was detected as concealment in the case of the respondent – firm during the course of survey under Section 133-A of the Act. We find that the Tribunal has considered this contention in paragraph 15.2 of the order and had negatived the same by observing that the partners of the respondent assessee firm in the returns filed in individual capacity under the Amnesty Scheme had already disclosed the stock of silver found in the alleged survey.

On going through the record, it is clear that the said returns submitted by the three partners of the respondent – firm in their individual capacity were accepted in the assessment made under Section 143 (1) of the Act on 20.03.1988.

Thus, the excess stock having been disclosed by the partners in their individual returns, and the same having been accepted by the appellants, the same income could not have been assessed again in the hands of the assessee – firm. Having regard to the aforesaid and having gone through the order passed by the Tribunal, we find that the Tribunal has rightly observed that the assessment made under Section 143 (1) of the 2 Act having stood final and the excess stock of silver found during survey operation having been correctly assessed in the hands of the partners of the respondent – firm and the same having become final, the respondent – firm cannot be taxed on the same amount in question. In view of the aforesaid, we find no substance in this appeal. The appeal fails and is hereby dismissed.

(Shantanu Kemkar) (Mool Chand Garg) Judge

Judge Pithawe RC

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