ISIDORE FERNANDES AND ANR., vs. THE ASST. COMMISSIONER OF INCOME TAX.,

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TXA/56/2012HC BombayHCBM05003472201112 February 2024Author: HON'BLE SHRI JUSTICE PRAKASH D. NAIK,HON'BLE SHRI JUSTICE BHARAT P. DESHPANDE17 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the decisions relied upon by the assessee were delivered in different factual circumstances and were not applicable. The Court noted that the seized documents were written by Mrs. Pauline Fernandes and related to the assessee's liaisoning business for which commission was received. The assessee admitted that only part of the entries were correct and did not deny that the entries related to his activities. The authorities below found the assessee's explanation untenable, as the nexus between payments by M/s. Dempo and the payments shown in the seized papers was not established. The assessee was unable to explain the source of funds, and the payments were not disclosed in regular returns prior to the search. The Court found no reason to interfere with the concurrent findings of the AO, CIT(A), and ITAT, stating that the claim was devoid of merit. The appeal was dismissed.

What were the facts?

The assessee, Isidore Fernandes and Mrs. Pauline Fernandes, filed their income tax return for AY 2001-02 declaring total income of Rs.1,67,083/- and agricultural income of Rs.57,239/-. A search under Section 132 was conducted on August 31, 2004, followed by a notice under Section 153A. The assessee filed a NIL income return, later revised to the original declared income. The Assessing Officer (AO) assessed total income at Rs.19,25,286/- and agricultural income at Rs.57,239/-, along with interest of Rs.11,29,825/-. The Commissioner of Income Tax (Appeals) partly allowed the appeal. The Income Tax Appellate Tribunal (ITAT) passed an order on June 30, 2011, which is under challenge before the High Court.

What were the issues?

1. Whether the addition of Rs.3,84,000/- and Rs.55,186/- on account of peak credit in the bank account was erroneous without considering the cash available from the sale of capital goods (Assessee's contention: Yes, it was an error. Revenue's contention: Not recorded). 2. Whether the addition of Rs.29,03,000/- under Section 69C was justified based on diary entries (Assessee's contention: No, the diary entries relate to real estate commission business and are supported by seized books of account. Revenue's contention: The assessee could not provide proper explanation or names and addresses of persons mentioned in the diary, and the explanation regarding commission from M/s. Dempo was not accepted due to discrepancies in names and amounts). 3. Whether the ITAT erred in upholding the AO's action regarding the diary entries and the commission from M/s. Dempo (Assessee's contention: The diary and loose papers have no evidentiary value and no basis for assessment. Revenue's contention: Concurrent findings of lower authorities do not warrant interference).

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 143(1),Section 143(2),Section 142(1),Section 271(1)(c),Section 69C,Section 234B,Section 260-A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Panaji, Goa (`ITAT’

(i)

Income Tax Appeal No.56 of 2012 is dismissed. (B.P.DESHPANDE, J.) (PRAKASH D. NAIK, J.) MST

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