RATTAN SINGH vs. INCOME TAX OFFICER

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

ITA No. 64 of 2006

Date of decision: 24.11.2009

Rattan Singh

… Appellant

Versus

Income Tax Officer

…. Respondent

Coram :

The Hon’ble Mr. Justice Deepak Gupta, Judge. The Hon’ble Mr. Justice V.K. Ahuja, Judge. Whether approved for reporting?1 No. For the appellant: Mr. Goverdhan Sharma and Ms. Ambika Kotwal, Advocates vice Mr. Sanjeev Kuthiala, Advocate.

For the respondent: Mr. Diwan Singh vice Mr. Vinay Kuthiala, Advocate.

Deepak Gupta, J. (Oral):

This appeal has been admitted on the following substantial questions of law:-

A. In view of the fact that the assessee filed return of income u/s 143(1) read with section 44AF which authorizes the filing of return on lump-sum basis, wherein no expenses have been claimed under section 28 to 43C of the Act, whether the Assessing Officer was legally justified in adding back the expenses by disallowing the same as paras 4 to 10 of the order?

1Whether reporters of Local Papers may be allowed to see the judgment? Yes.

B. Once the Assessing Officer accepts the return of the assessee regarding businesses income and makes the observation that “Books of accounts produced by the assessee have been examined with reference to the information called for. However, no discrepancy has been noted in the sale/purchase transactions. In view of the above trading results of the assessee are being accepted and no adverse inference is being drawn on this account.”; whether he is justified legally in adding back Rs.1,00,000/- on the basis of presumption & assumption as has been held by him in para 2, page 3 of the order as under:

“Therefore

the balance income of Rs.1,00,000/- is considered to be earned by the assessee from undisclosed sources and probably it is assessee’s business income to which it purported to give the colour of Agricultural Income.”

C. Whether the Ld. Tribunal was justified in coming to Conclusion that since the agricultural income for the previous year i.e. 2000-01 was lower, then the same cannot be higher for the 2001-02 in view of the fact that under fiscal status each year is an independent year and has been assessed according to income returned for that year only.

The brief facts of the case are that the assessee is running a jewellery business in Mandi Town. He submitted his return. Thereafter his case was taken for survey under Section 133(6) of the Income Tax Act, 1961, hereinafter referred to as ‘the Act’. During the course of the survey, it was found that the books of account being maintained by the assessee in respect of the jewellery business are in

order. No discrepancy was noticed in the books of account or in the bank account maintained by the assessee.

The only dispute is that the assessee claimed agriculture income of Rs.1,95,000/- for the assessment year in question. The Assessing Officer found that the assessee had failed to produce any document to corroborate his stand that he had earned Rs.1,95, 000/- from agriculture income. The assessee did not produce any detail whatsoever in regard to agriculture produce sold by him. No accounts of the agriculture activities were maintained. The Assessing Officer also found an interesting feature in the capital account of the assessee, wherein on a large number of occasions, the day when the agriculture income was deposited, the same day an identical amount was withdrawn. The assessee also did not produce any record of the amount spent on seeds, fertilizers, water etc. In the previous year, the assessee had shown agriculture income at Rs. 67,519/- and thereupon the Assessing Officer came to a finding of fact that this could not have been increased threefold within one year. He, therefore, restricted the benefit of agriculture income at Rs.95,000/- and added back Rs.1,00,000/- to the income of the assessee. Though the appeal has been admitted on the substantial questions of law, we find that none of the questions arises for decision in this case. The finding of the Assessing Officer is purely a finding of fact. The Commissioner of Income Tax (Appeals), no doubt, decided this matter in favour of the assessee, but the ITAT reversed the findings of the Commissioner Income Tax (Appeals) and upheld the findings of the Assessing Officer. The question as to what amount the appellant was earning from agriculture is purely a finding of fact and not a question of law.

We, therefore, find that none of the questions of law arises for determination in this appeal. The appeal is accordingly dismissed.

( Deepak Gupta ),

Judge

( V.K. Ahuja ), November 24, 2008

Judge (BSS)