LAXMI VENTURES BOMBAY PVT. LTD. vs. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE -5 (2)

JUDGMENT (PER M.S.SANKLECHA,J): This appeal under Section 260A of the Income Tax  Act,  1961  (‘the Act’) challenges   the   order dated 04.08.2009 passed by the Income Tax Appellate Tribunal (‘the Tribunal’) in Income Tax Appeal No. 2173/Mum/02   relating   to   the   assessment   year   1998­ 1999. CNR No : HCBM020305382009 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:58

SNC 2 2         After   having   filed   the   present   appeal,   the appellant had on 11.01.2010 moved the Tribunal with a Miscellaneous Application under Section 254(2) of the Act seeking to rectify the order dated 04.08.2009 as according to them certain evidence   and submissions had   not   been   considered   leading   to   miscarriage   of justice. This Miscellaneous Application was dismissed by   the   Tribunal   on   25.05.2011. The   Appellant   was allowed   to   amend   the   present   appeal   to   bring   on record   the   subsequent   events   i.e.     Miscellaneous Application   dated   11.01,2010   and   the   order   of   the Tribunal dated 25.05.2011. 3 The   appellant   has   formulated   the   following questions of law for the consideration of this court. 1)        Whether on the facts and in the circumstances   of   the   case   and   in   law, the Tribunal was justified in refusing to   remand   the   matter   back   to   the Respondent only on the ground that the matter was very old even though on other issues arising in the same Appeal it had remanded the matter to the Respondent? 2)         Whether on the facts and in the Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:58

SNC 3 circumstances of the case, the Tribunal ought to have held that as the amounts of TDS reflected in the alleged fake TDS certificates   did   not   stand   debited   in the   tax   deducted   at   source   account   in the   balance   sheet   of   the   Appellant, there was no material on the basis of which   it   could   be   assumed   that   the amount of Rs.19,22,817/­ represented the income   of   the   Appellant   for   the   year ended 31st March, 1998? 3)          Whether on the facts and in the circumstances   of   the   case   and   in   law, the Tribunal ought to have held that as the said two TDS certificates issued by M/s. Supreme Industries and M/s. Dalal Auto   Cast   were   fake,   the   said certificates   ought   to   be   ignored   in their   totality   and   could   not   form   the basis   of   making   any   addition   to   the income of the Appellant? 4)

Whether   on   the   fats   and circumstances   of   the   case   and   in   law, the   Tribunal   finding   is   perverse   and contrary   to   the   material   on   record   in the   light   of   the   evidence   produced   by the Appellant before the Tribunal? 3 Brief   facts   leading   this   appeal   are   as under: a) The appellant carries on business at Bhilai, Faridabad and Mumbai. On   30.11.1998,   the   Appellant   filed Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:58

SNC 4 its   return   of   income   for   the assessment year 1998­1999 declaring a total income of Rs.8.06 lacs. b) During   the   assessment   proceedings, the Assessing Officer found that the receipts   of   income   on   account   of labour charges by Faridabad division was   shown   at   Rs.35.67   lacs   in   the return of income.   However, as per the   Tax   Deducted   at   Source(TDS) certificates attached to the return of   income,   the   amount   received   on account   of   labour   charges   by Faridabad division was Rs.60.12lacs. Consequently, the Assessing Officer called upon the appellant to explain the   discrepancy   and   non   disclosure of   Rs.21.15lacs   income   receipts   by Faridabad   branch.   The   appellant sought   time   to   explain   the Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:58

SNC 5 difference,   but,   failed   to   do   so. Consequently, the Assessing Officer rejected the books of account of the appellant   under   Section   145(3)   of the   Act   and   proceeded   to   complete the assessment under Section 144 of the Act as Best Judgment Assessment. This resulted in adding an income of Rs.19.22lacs   to   the   appellant’s income for the assessment year 1998­ 99. c) In first Appeal, the Commissioner of Income   Tax   (Appeals)   by   an   order dated   25.02.2002   dismissed   the appellant’s appeal. The Commissioner of   Income   Tax   (Appeals)   held   that TDS certificates indicated that the amounts   had   been   paid   to   the appellant during the assessment year 1998­1999. However,   the   income Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:58

SNC 6 reflected   in   some   of   the   TDS certificates had not been disclosed by   the   appellant   in   its   return   of income. Nor was the appellant able to explain the discrepancy in having furnished TDS certificates to claim credit   of   tax   paid,   but   having failed   to   show   the   income   in   its return of income. d) By   an   order   dated   04.08.2009,   the Tribunal   dismissed   the   appellant's appeal.   Before   the   Tribunal,   the appellant   contended   that   the   TDS certificates   which   were   attached along   with   the   returns   were   fake certificates, as the companies which had issued the certificates were not traceable.   It   was   also   contended that there was some dispute between the Directors of the Company and the Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:58

SNC 7 matter   was   pending   before   the Company   Law   Board.   In   the   above circumstances   the   appellant   prayed that the matter be remanded to the Assessing   Officer,   so   as   to   issue summons   to   the   parties   who   had issued   the   TDS   certificates.     The Tribunal   did   not   accept   the submissions   of   the   appellant   and held that the TDS certificates were enclosed by the appellant along with its   return   of   income,   which   were duly   signed   by   its   Directors. Consequently, the Tribunal found no infirmity   in   the   order   of   the Assessing

Officer

and the Commissioner of Income Tax (Appeals) adding an amount of Rs.19.22 lacs to the income of the appellant. Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:58

SNC 8 However, in respect of the claim for   depreciation   amounting   to Rs.16.08 lacs, the Tribunal restored the   matter   to   the   file   of   the Assessing   Officer,   to   enable   the appellant to produce necessary bills to support its claim with regard to purchases   of   assets   during   the assessment year 1998­1999. e) Being   aggrieved,   the   appellant filed   this   appeal   on   17.12.2009 under   Section   260A   of   the   Act. Thereafter,   on   11.01.2010,   the appellant

filed

Miscellaneous Application under Section 254(2) of the Act seeking to rectify the Order dated 04.08.2009 to bring on record various   evidence   and   submissions made   during   the   course   of   the hearing before the Tribunal at the Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:58

SNC 9 hearing   on   29.06.2009. In   the Miscellaneous

Application,

the appellant referred to the following evidence,   which   according   to   them was relied upon during the hearing before the Tribunal: a) Petition before Company Law Board; b) Affidavit dated 06.05.2008  of Mr. Vinay Walia; c) Details of T.D.S. (Faridabad branch) as per ledger; d) Details of T.D.S. in last 3 years. And e) Copy of Account of the assessee in the books of Dalal Auto Cast for assessment year 1998­99. g)      On 25.05.2011,

the Tribunal dismissed

the Miscellenous Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:58

SNC 10 application holding that so far as the issue of TDS   certificates are concerned,

nothing

had been submitted   before   the   Bench,   during the course of hearing, on 29.06.2009 leading   to   the   order   dated 04.08.2009. The Tribunal also held that   as   the   appellant   had   already filed   an   appeal   against   the   order dated 04.08.2009 to this court and the same is pending, it would not be appropriate   for   them to   re­ adjudicate the matter. 4 So far as, questions of law at Sr. No.1 to 3 above are concerned, the same are questions of fact. All three Authorities under the Act had come to the

conclusion   that   the   appellant   had   sought   higher deduction   of   tax   at   source   by   annexing   TDS certificates and not reflecting the income as shown in   the   TDS   certificates   in   its   return   of   income. Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:58

SNC 11 The Tribunal on consideration of all facts had come to the conclusion that remanding the matter to the Assessing Officer would not serve any purpose, as the appellant   had   consciously   claimed   credit   of   tax deduction on the basis of the TDS certificates and even   enclosed   the   same   along   with   the   return   of income,   but   failed   to   show   it,   as   a   part   of   the income.   This   entire   excess   income   of   Rs.19.22lacs would have not come to light but for the Assessing officer verifying each TDS Certificate.   The return of   income   was   duly   signed   and   verified   by   the Directors   of   the   company.     In   view   of   the   above facts, the Tribunal concluded that no useful purpose would be served by remanding the matter back to the Assessing Officer. 5 On   the   basis   of   the   record   these   findings were, to say the least reasonable.  Indeed in view of the TDS certificates and the return of income filed the conclusion of the Tribunal were justified.   In Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:58

SNC 12 fact realising this, the appellant sought to explain the same by relying upon certain circumstances.  The findings   and   conclusion   of   the   Tribunal   cannot   be said to be perverse. 6 So far as question no.4 is concerned, there is a clear finding of the Tribunal in its order dated 25.05.2011 that the documents alleged to have been produced before the Tribunal during the course of the hearing   on   29.06.2009,   leading   to   the   order   dated 04.08.2009   were   in   fact   not   produced.   This   is   a finding of fact. There is no reason for us to assume that the facts stated in the order of the Tribunal to the effect that nothing has been submitted before the Bench with regard to the TDS certificates during the course of hearing on 29.06.2009 leading to the Order dated 04.08.2009 is not correct. In the circumstance, no question of law arises. 7 In   view   of   the   above,   the   appeal   is Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:58

SNC 13 dismissed on all four questions of law, as the same do not give rise to any substantial question of law.

The   Appeal   is   dismissed.   No   order   as   to costs. (M.S. SANKLECHA, J.) (S.J. VAZIFDAR, J.) Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:52:58 Powered by TCPDF (www.tcpdf.org)