SOMAN PRAMOD NARAYAN vs. THE COMMISSIONER OF INCOME-TAX-I, PUNE AND ORS.

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WP/8047/2005HC BombayHCBM01034969200517 October 2006Bench: HON'BLE SHRI JUSTICE J.P. DEVADHAR,HON'BLE SHRI JUSTICE H.L. GOKHALE3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the addition of Rs. 4,57,000 to the petitioner's income was justified. The reasoning was based on the petitioner's own unequivocal statement recorded during the survey under Section 133A of the Income Tax Act. In that statement, the petitioner had accepted that he could not support his claim of unsecured loans from the parties from whom they were allegedly received and consequently accepted that the amount could be added as his additional income. The Court found no reason to interfere with the order of the Commissioner of Income Tax, which had confirmed the assessing officer's action. The petitioner's later contention regarding the advance to his sister concern, Shalini Granite, was not considered a valid reason to disturb the addition, as the initial admission was clear and the petitioner could not explain how the amount came into his hands. The petition was dismissed.

What were the facts?

The petitioner, Soman Pramod Narayan, challenged an order passed by the Commissioner of Income Tax, Pune, under Section 264 of the Income Tax Act, dated March 29, 2005. This order confirmed an addition of Rs. 4,97,000 made by the assessing officer on March 17, 2002. The dispute pertains to an amount of Rs. 4,57,000. The addition was based on the petitioner's own statement recorded during a survey under Section 133A, where he admitted he could not support his claim of unsecured loans from the lenders and accepted the amount as additional income. The petitioner later contended that this amount was given to his sister concern, Shalini Granite, and taxed in his hands because Shalini Granite did not disclose the source.

What were the issues?

1. Whether the addition of Rs. 4,57,000 to the petitioner's income is justified, considering his statement recorded under Section 133A of the Income Tax Act and his subsequent claim that the amount was advanced to a sister concern. Assessee's Arguments: The petitioner contended that the amount of Rs. 4,57,000 was given to his sister concern, Shalini Granite, and was taxed in his hands because Shalini Granite failed to disclose the source of funds. He sought to distance himself from the initial admission made during the survey. Revenue's Arguments: The revenue, through the assessing officer and the Commissioner, relied on the petitioner's own statement recorded under Section 133A, wherein he accepted the amount as his income due to his inability to support the claim of unsecured loans. The revenue argued that the assessing officer was justified in making the addition based on this admission.

Which sections of the Income-tax Act were involved?

Section 133A,Section 264

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICITON WRIT PETITION NO.8047 OF 2005 Soman Pramod Narayan .. Petitioner. Versus The Commissioner of Income- Tax, Pune & Others .. Respondents. Mr.Uday Warunjikar for the petitioner. Mr.A.M. Kotangale with Mr.S.R. Chavan for the respondents. CORAM : H.L. GOKHALE, & J.P. DEVADHAR, JJ. DATED : 17TH OCTOBER, 2006. P.C. : 1. Heard Mr.Warunjikar in support of this petition. Mr.Kotangale appears for the respondents. 2. The petitioner seeks to challenge the order passed by the Commissioner of Income tax, Pune under Section 264 of the Income Tax Act dated 29th March, 2005 which has confirmed the order passed by the assessing officer dated 17th March, 2002. By that assessment order, the assessing officer had added an amount of Rs.4,97,000/- in the hands of the petitioner. Out of that addition, an amount of Rs.4,57,000/- is sough to be disputed. It is, however, seen that this addition was done on the basis of the petitioner’s own statement recorded during the course of survey under Section 133A of the Income Tax Act, wherein he clearly stated that though he has

2 shown this amount of Rs.4,57,000/- as unsecured loan in his hands, he is not in a position to support his claim from the parties from whom the unsecured loan was received. He, therefore, accepted that this may be added as his additional income. 3. The petitioner has sought to contend that he had given an amount of Rs.4,57,000/- to his sister concern i.e. Shalini Granite and that amount was taxed in the hands of the petitioner since the source was not disclosed by Shalini Granite. We are not concerned with Shalini Granite in this petition. 4. In as much as the addition made in the case of the petitioner is concerned, he is not in a position to explain as to how this amount has come in his hands and in view of his own statement, the assessing officer was right in holding that the said amount is a part of his income and that part of the order is not disturbed by the Commissioner of Income Tax. 5. No reason to interfere with the impugned order. The petition is dismissed with no order as to costs. (H.L. GOKHALE, J.)

3 (J.P. DEVADHAR, J.)

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