DY.COM.OF INCOME TAX CIRCLE 21RAIPUR vs. SATISH KUMAR DANI

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TAXC/11/2006HC ChhattisgarhCGHC01001113200622 January 2014Bench: HON'BLE THE CHIEF JUSTICE,HON'BLE SHRI JUSTICE MANINDRA MOHAN SHRIVASTAVA3 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the AO had added ₹2,32,183 towards undisclosed investment in stock after considering the Assessee's statement, and this was a possible view. The Tribunal stated that if one of two possible views is accepted, the order cannot be revised under section 263. The High Court found no illegality in the Tribunal's reasoning. Furthermore, the Tribunal had previously set aside the addition of ₹2,32,183 on merits on September 30, 2005. As this earlier order of the Tribunal had not been set aside, the High Court found no justification for the revision under section 263. Consequently, the High Court held that no question of law arose for consideration and dismissed the appeal.

What were the facts?

A search under section 132 and survey under section 133-A of the Income Tax Act, 1961, were conducted on the Assessee, Shri Satish Kumar Dani, proprietor of Pradeep Paper Mart, on December 9, 1998. The survey was later converted into a search on December 11, 1998. The Assessee surrendered undisclosed income of ₹21 lacs on February 15, 1999, and subsequently filed a return showing an income of ₹3 lacs. The Assessing Officer (AO) enhanced the income to ₹25,94,020, including an addition of ₹2,32,183 for undisclosed investment in stock. The Commissioner of Income Tax (Appeals) (CIT-A) dismissed the Assessee's appeal regarding the stock addition. However, the Income Tax Appellate Tribunal (Tribunal) deleted this addition. Separately, the CIT-A issued a notice under section 263 and added ₹21 lacs for undisclosed investment in stock. The Tribunal set aside this order, leading to the present appeal by the Department.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Tribunal was justified in setting aside the order passed by the Commissioner of Income Tax u/s 263 of the Act and restoring the order of the AO passed u/s 158 BC r.w.s. 143(3) ignoring the fact that no inquiries were made by the AO during the assessment completed by him? (Question of law/mixed law and fact, turning on Section 263 and Section 158 BC r.w.s. 143(3)). 2. Whether on the facts and in the circumstances of the case, the Tribunal was right in giving the impugned finding at the mere assertion of the respondents without corroboration from any extrinsic or intrinsic sources and drawing inferences without any basis? (Question of law/mixed law and fact). Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Department argued that the Tribunal was wrong in setting aside the CIT-A's order under section 263, asserting that the AO had not made sufficient inquiries. The Department also contended that the Tribunal's finding was based on mere assertion without corroboration.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 132,Section 133-A,Section 158 BC,Section 143(3),Section 263

AI-generated summary — verify with the full judgment below

/;'!' 3 ) J '' / ^ <\' M\ ^^ HIGH COURT OF CHHATTISGARH AT BILASPUR CORAM: HON'BLE SHRI YATINDRA SINGH, C.J. HON'BLE SHRI MANINDRA MOHAN SHRIVASTAVA, J. APPELLANT RESPONDENT Tax Case No. 11 of 2006 Deputy Commissioner of Income Tax (Inv) Circle 2(1) Raipur. VERSUS Shri Satish Kumar Dani, Prop. Pradeep Paper Mart, Jawahar Nagar, Raipur. INCOME TAX APPEAL UNDER SECTION 260-A OF INCOME TAX ACT.1961 Appearance: Shri Anand Dadariya, counsel for the Appellant. Shri BP Sharma, counsel for the Respondent. ORDER (23rd January, 2014) 1. This is a tax appeal under section 260-A of the Income Tax Act, 1961 (the Act) by the Income Tax Department (the Department) against the order dated 17.04.20Q6 of the Income Tax Appellate Tribunal, Nagpur Bench, Nagpur (the Tribunal) in respeot of Shri Satish Kumar Dani, proprietor, Pradeep Paper Mart, Jawahc: Nagar, Raipur (the Assessee) forthe block assessment period 01.04.1988 to 09.12.1999. THE FACTS 2. A search under section 132 of the Act was conducted in the residential premises of the Assessee on 09.12.1998 and a survey under section 133-A of the Act was also held in the business premises on the same day. Later on, the survey in the business premises was converted into searchon 11.12.1998. 3. The Appellant surrendered undisclosed income of ?21 lacs on 15.02.1999. Thereafter, he filed return on 27.11.2000 showing his income to be ?3 lacs. 4. The Assessing Officer (the AO) by his order dated 03.01.2001, enhanced the income at the hand of the Assessee to ?25,94,020/-.

/-•' •• -r:-'-... '^ >t)>1, However, out of this amount, ?2,32,183/- was added for the undisclosed investment in the stock. 5. Aggrieved by the aforesaid order, the Assessee filed ari appeal before the Commissioner of Income Tax (Appeals) (the CIT-A). This appeal was dismissed so far as addition of ?2,32,183/- was concerned. However, the appeal- IT(SS)A 71/Nag/2001 of the Assessee was allowed by the Tribunal on 30.09.2005 deleting the addition of?2,32,183/-. 6. In the meantime, the CIT-A also issued notices under section 263 of the Act and thereafter, by his order dated 08.03.2001, added a sum of ?21 lacs towards the undisclosed investment in the stock. 7. Against the aforesaid order, the Assessee filed an appeal before the Tribunal which was allowed on 17.04.2006 and the order of the CIT-A adding ?21 lacs under section 263 of the Act was set aside. Hence, the present appeal by the Department. THE DECISION 8. We have heard counsel for the parties. 9. This appeal was admitted for hearing on 13.09.2006, however, no question was framed while admitting the appeal. 10. The counsel for the Department states that this appeal may be considered for the following two questions: '1. Whether on the facts and in the circumstances of the case the Tribunal was justified in setting aside the order passed by the Commissioner of Income Tax u/s 263 of theAct and restoring the order of the AO passed u/s 158 BC r.w.s. 143(3) ignoring the fact that no inquiries were made by the AO during the assessment completed by . him. - - --"

'&', 2. Whether on the facts and in the circumstances of the case, the Tribunal .was right in giving the impugned finding at the mere assertion of the respondents without corroboration from any extrinsic or intrinsic sources and drawing inferences without any basis.' 11-TheTribunalheldthat: • The AO had added 72,32,183/- only towards the undisclosed investment in the stock after considering the statement of the Assessee; • This was also one of the possible view; and • In case out of two possible views, one of them is accepted, then, the order cannot be revised under section 263 of the Act. There is no illegality in the reasoning or in the order of the Tribunal. 12. Apart from above, the Tribunal has also held that there was no justification to revise the order under section 263 of the Act as even the addition of ?2,32,183/- on merit has been set aside by the Tribunal on 30.09.2005 in Appeal- IT(SS)A 71/Nag/2001 , there was no justification to revise the order under section 263 of the Act. 13. Nothing has been pointed out or brought to our notice that the order of the Tribunal dated 30.09.2005 has been set aside. padma/amit 14. In view of above, no question of law arise for consideration in this appeal. The tax case has no merit. ltjs_dLsmissed. Sd/- <-'»iefJustice Sd/- Manindra Mohan Shrivastava Judge

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