THE COMMISSIONER OF INCOME TAX-II, NASHIK vs. M/S RAJMAL LAKHICHAND

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ITA/34/2012HC BombayHCBM03035931201222 January 2014Author: HON'BLE SHRI JUSTICE S C DHARMADHIKARI,HON'BLE SHRI JUSTICE RAVINDRA V. GHUGE3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Income Tax Appellate Tribunal (ITAT) did not commit any error of law or perversity in concluding that the purchases from eighteen Non-Resident Indians (NRIs) were legally and properly made. The court found that the assessee had produced relevant documents, including customer receipts and purchase vouchers, to support these transactions. The Tribunal's finding that the assessee was dealing in gold and silver items and had accounted for all purchases was upheld. Consequently, the stock confiscated was considered stock-in-trade, and its confiscation was correctly treated as a business loss. The High Court found that the appeals did not raise any substantial questions of law, as the revenue was seeking a re-appreciation and re-appraisal of facts, which is impermissible. Therefore, the appeals were dismissed.

What were the facts?

The appeals were filed by the Commissioner of Income Tax-II, Nashik, against M/s Rajmal Lakhichand. The core issue revolved around purchases made by the assessee from eighteen Non-Resident Indians (NRIs). The assessee had provided customer receipts and purchase vouchers for these transactions. The Income Tax Appellate Tribunal (ITAT) had previously held that these purchases were legally and properly made, and that the stock in question was stock-in-trade, the confiscation of which resulted in a business loss. The revenue's appeals to the High Court challenged the ITAT's findings.

What were the issues?

1. Whether the purchases made by the assessee from eighteen Non-Resident Indians (NRIs) were legally and properly made, and whether the stock-in-trade confiscated constituted a business loss, as held by the Income Tax Appellate Tribunal (ITAT)? (Question of law and fact) Assessee's Contentions: The judgment does not record any specific contentions made by the assessee before the High Court. However, the High Court's observation implies that the assessee had produced relevant documents like customer receipts and purchase vouchers to substantiate the purchases from the NRIs. Revenue's Contentions: The revenue, represented by the Commissioner of Income Tax-II, Nashik, contended that the ITAT had erred in its conclusion. The revenue sought a re-appreciation and re-appraisal of the facts, which they believed was permissible. The judgment does not specify any particular legal provisions or precedents relied upon by the revenue.

AI-generated summary — verify with the full judgment below

(1) ta32­34­12 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD INCOME TAX APPEAL NO. 32 OF 2012 The Commissioner of Income Tax­II, Nashik APPELLANT VERSUS M/s Rajmal Lakhichand RESPONDENT AND INCOME TAX APPEAL NO. 34 OF 2012 The Commissioner of Income Tax­II, Nashik APPELLANT VERSUS M/s Rajmal Lakhichand RESPONDENT ..... Mr. D.V. Soman, Advocate for the appellant in both the appeals. Mr. Subodh P. Shah, Advocate for the respondent in both the appeals. ..... CORAM : S.C. DHARMADHIKARI AND RAVINDRA V. GHUGE, JJ. DATED : 22nd January, 2014 PER COURT :

1.

Having heard Mr. D.V. Soman, learned counsel

(2) ta32­34­12 appearing for the appellants and perusing, with his assistance,   the   order   of   the   Income   Tax   Appellate Tribunal   (ITAT),   we   are   of   the   opinion   that   the learned Tribunal did not commit any error of law or perversity   in   arriving   at   a   conclusion   that   the purchases   from   eighteen   Non­Resident   Indians   (NRIs) were legally and properly made.   Finding of fact is recorded after culling out the correct proposition of law from the decisions relied upon.

2.

After the Assessee has produced the relevant documents like customer’s receipts, purchase vouchers with regard to purchases from eighteen NRIs, then the learned Tribunal did not commit any error in holding that the Assessee before it was dealing in gold and silver items.  He has accounted for all the purchases in   question.     In   these   circumstances,   the   stock allegedly   termed   as   contraband   was   undisputedly   a stock­in­trade   of   the   Assessee   and   confiscation thereof   resulted   in   business   loss.   In   such circumstances and when the attempt is to have a re­ appreciation

and re­appraisal,

which is impermissible,   then   the   appeals   cannot   be

(3) ta32­34­12 entertained. These appeals  do not give any  rise to substantial questions of law.  Both the appeals are, therefore, dismissed. [ RAVINDRA V. GHUGE ] [ S.C. DHARMADHIKARI ] JUDGE

JUDGE npj/ta32­34­12

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