PR. COMMISSIONER OF INCOME TAX-1 vs. SMT. SWETA MEHTA

ITA/40/2024HC Rajasthan2024:RJ-JD:45945-DB13 November 2024Bench: MANINDRA MOHAN SHRIVASTAVA, MUNNURI LAXMAN2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court found that the ITAT relied on two pieces of evidence to conclude that the respondent-assessee did not actually receive the additional amount of Rs.96,06,279/-. Firstly, the ITAT relied on the affidavit of the respondent-assessee. Secondly, it accepted the assessee's contention that this amount was not actually received by the assessee through bank transactions. The Court considered the revenue's submission that this was a mode to avoid direct evidence of receipt, but viewed this as a matter within the realm of assessment of evidence. The Court concluded that no substantial question of law was involved. Therefore, the appeal was dismissed. No issue was expressly left undecided.

What were the facts?

The Revenue (Pr. Commissioner of Income Tax-1, Jodhpur) is appealing an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had deleted an addition of Rs. 96,06,279/- made by the Assessing Officer (AO) and upheld by the Commissioner of Income Tax (Appeals) [CIT(A)]. The addition was on account of alleged suppression of profits by the respondent, Smt. Sweta Mehta (Legal Heir of Sh. Padam Chand Mehta). The suppression was purportedly through Client Code Modification (CCM) by the broker M/s Kunvarji Commodities Brokers Pvt. Ltd. in 141 commodity transactions. The AO's assessment order and the CIT(A)'s affirmation were based on information collected during a search operation at the broker's premises.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the ITAT has erred in deleting the addition of Rs.96,06,279/- made by the assessing officer and upheld by the CIT(A) on account of suppression of profits by the respondent by way of Client Code Modification by the broker in 141 commodity transactions? (Question of law/mixed law and fact) 2. Whether on the facts and in the circumstances of the case, the ITAT has erred in deleting the addition of Rs.96,06,279/- contrary to the evidence available on record in the form of information collected during search operation at broker M/s Kunwarji Commodities Brokers Pvt. Ltd. regarding diversion of profit of the respondent through CCM on 141 occasions resulting in suppression of profits? (Question of law/mixed law and fact) 3. Whether the findings arrived at by the ITAT is perverse in the facts and circumstances of the case? (Question of law) Revenue's Contention: The AO clearly held that there was an escapement of income of Rs.96,06,279/- due to profit earned by the respondent through CCM by the broker in 141 transactions. This was affirmed by the CIT(A). However, the ITAT, on conjecture and surmise and ignoring clinching material, reversed the findings and deleted the addition. Respondent's Contention: Not recorded in the judgment.

AI-generated summary — verify with the full judgment below

[2024:RJ-JD:45945-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 40/2024 Pr. Commissioner Of Income Tax-1, Jodhpur. ----Appellant Versus Smt. Sweta Mehta, (Legal Heir Of Sh. Padam Chand Mehta), 73 Nehru Park, Jodhpur. ----Respondent For Appellant(s) : Mr. Sunil Bhandari For Respondent(s) : - HON'BLE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE MUNNURI LAXMAN Order 13/11/2024 1. This appeal has been filed with the following substantial question of law:- “(a) Whether on the facts and in the circumstances of the case, the ITAT has erred in deleting the addition of Rs.96,06,279/- made by the assessing officer and upheld by the CIT(A) on account of suppression of profits by the respondent (Shri Padam Chand Mehta) by way of Client Code Modification by the broker M/s Kunvarji Commodities Brokers Pvt. Ltd. in a large number (141) of commodity transactions? (b) Whether on the facts and in the circumstances of the case, the ITAT has erred in deleting the addition of Rs.96,06,279/- contrary to the evidence available on record in the form of information collected during search operation at broker M/s Kunwarji Commodities Brokers Pvt. Ltd. regarding diversion of profit of the respondent through CCM on 141 occasions resulting in suppression of profits? (c) Whether the findings arrived at by the ITAT is perverse in the facts and circumstances of the case?” 2. Learned counsel for the revenue submits that even though the AO in the assessment order, clearly held that it was a case of (Uploaded on 18/11/2024 at 10:17:15 AM) (Downloaded on 28/10/2026 at 12:47:41 AM)

[2024:RJ-JD:45945-DB] (2 of 2) [ITA-40/2024] escapement of income of Rs.96,06,279/- on account of profit earned by the respondent by way of Client Code Modification by the broker in a large number of commodity transactions to the extent of 141 transactions, which was later on affirmed by the CIT (Appeal), the learned Income Tax Appellate Tribunal on conjecture and surmise and ignoring the clinching material on record, has reversed the findings and deleted the addition. 3. We have gone through the order passed by the learned Tribunal. 4. We find that the learned Tribunal in order to arrive at a conclusion that the respondent-assessee did not actually receive the additional amount of Rs.96,06,279/- has relied upon two evidences. It has relied upon the affidavit of the respondent- assessee and accepted his contention that the asseessee did not actually receive this amount by way of bank transactions in his hand. 5. Submission of learned counsel for the revenue that this was a mode to avoid a direct evidence being created with regard to receipt of Rs.96,06,279/-, is essentially a matter in the realm of assessment of evidence on record. No substantial question of law is involved. 6. The appeal is, therefore, dismissed. (MUNNURI LAXMAN),J (MANINDRA MOHAN SHRIVASTAVA),CJ 18-Ramesh/PoonamS/- Powered by TCPDF (www.tcpdf.org) (Uploaded on 18/11/2024 at 10:17:15 AM) (Downloaded on 28/10/2026 at 12:47:41 AM)

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