MANGE RAM MITTAL vs. COMMISSIONER OF INCOME TAX

ITA N

IN THE 1. ITA N

Mange Comm

Comm Mange

CORAM: H

Present:

SANJEEV P

These passed by th Tax Appellat 2. 28.06.1996 a income was Circle, Hisar No. 51 of 2007 E HIGH COURT OF PUNJAB AT CHANDIGARH Date of Pron No. 51 of 2007 (O&M) e Ram Mittal

Versus missioner of Income Tax, Hisar No. 243 of 2008 (O&M) missioner of Income-Tax, Hisar Versus e Ram Mittal

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Akshay Bhan, Senior Advoc Mr. Shantanu Bansal, Dr. Deepa Mr. Yugank Goyal, Advocates, in ITA No. 51 of 2007 and for th in ITA No. 243 of 2008.

Mr. Sanay Bansal, Senior Advoc Mr. Gauri Neo Rampal, Senior S Appellant in ITA No. 243 of 200 In ITA No. 51 of 2007. *** PRAKASH SHARMA, J. two appeals are preferred agai he Special Bench-B, comprising te Tribunal, New Delhi. Brief facts of the case are th at the residential premises of found. The Assistant Commi , passed the additional assessmen -1- B AND HARYANA H Reserved on : 12.09.2024 nouncement : 14.11.2024

… Appellant s

…Respondent

… Appellant s

…Respondent NJEEV PRAKASH SHARMA NJAY VASHISTH cate assisted by ak Jindal, for the appellant he respondent cate assisted by Standing counsel for the 08 and for the respondent inst the order dated 18.08.2006 g three Members of the Income at a search was conducted on the assessee and undisclosed issioner of Income Tax, Hisar nt order under Section 132(1) of

6 e n d r f VARINDER SINGH 2024.11.14 14:36 I attest to the accuracy and authencity of this order/judgment

ITA N

the Income T filed by the a to a three Jud the appeal on officer were Assessee are 3. Mittal is con appellant the material unc Chapter-XIV of search cas tax under th discovered d assessment sh of search. Th effect to Sec the legal pos search ought find that the ofphraseolog the Assessing 4. apposite to q which is as u Comp No. 51 of 2007 Tax Act, 1961 (for short, ‘the A assessee before the Income Tax dges Bench of the Tribunal. The n 18.08.2006 and many of the a not accepted. It is against that in appeals before this Court. So far as ITA No. 51 of 2007 ncerned, we find the points rai erein are that the assessment w overed during search. The Parl V-B of the Act laying down the s ses which is a self contained cod he said chapter should have d during the course of such hould be restricted only to the ev he words are relatable to such evi tion 158-BB of the Act from 01 sition that was not relatable to th not be included in the computa e Tribunal has, therefore, exam gy “such other materials or info g Officer and relatable to such ev For the purpose of considering t quote Section 158-BB (1) of the under:- utation of undisclosed income -2- Act’) on 27.06.1997. The appeal Appellate Tribunal was referred learned Tribunal partly allowed additions made by the assessing order that the Revenue and the 7 preferred by Mr. Mange Ram ised by learned counsel for the was made only on the basis of liament had enacted a separate special procedure for assessment de. The amount to be subject to direct nexus with the material search operations alone. The vidence found during the course idence, added with retrospective 1.07.1995, and re-enforced with he evidence found as a result of ation of undisclosed income. We mined the meaning and scope formation as are available with vidence”. the aforesaid aspect, it would be e Act as it stood on 01.07.1995, of the block period. l d d g e m e f e t o l e e e h f e e h e , VARINDER SINGH 2024.11.14 14:36 I attest to the accuracy and authencity of this order/judgment

ITA N

f No. 51 of 2007 158BB. (1) The undisclo shall be the aggregate of the tot falling within the block period c the provisions of this Act, on th result of search or requisition documents and such other ma available with the Assessing evidence), as reduced by the ag as the case may be, as increase of such previous years, determin (a) where assessments un or section 147 have date of commencemen requisition], on the ba (b) where returns of incom 139 Thor in response section (1) of sectio assessments have no search or requisition disclosed in such retur (c) where the due date fo expired, but no return (A) on the basis of e of account and the normal cour search or requi in computation falling in the blo (B) on the basis of e of account and the normal cour search or requi not exceed -3- osed income of the block period tal income of the previous years computed, "[in accordance with he basis of evidence found as a n of books of account or other aterials or information as are Officer and relatable to such ggregate of the total income, or ed by the aggregate of the losses ned,- nder section 143 or section 144 been concluded "[prior to the nt of the search or the date of asis of such assessments; me have been filed under section e to a notice issued under sub- on 142 or section 148] but ot been made till the date of n, on the basis of the income rns; or filing a return of income has of income has been filed,- entries as recorded in the books other documents maintained in rse on or before the date of the isition where such entries result of loss for any previous year ock period; or entries as recorded in the books other documents maintained in rse on or before the date of the isition where such income does the maximum amount not d s h a r e h r s 4 e f n - t f e s s n e t r s n e s t VARINDER SINGH 2024.11.14 14:36 I attest to the accuracy and authencity of this order/judgment

ITA N

E No. 51 of 2007 chargeable to ta in the block peri (ca) where the due date fo expired, but no return in cases not falling un (d) where the previous ye filing the return of in section 139 has not e relating to such incom the books of account a in the normal course search or requisition r (e) where any order of se sub-section (4) of sect order; (f) where an assessment o made earlier under c the basis of such asses Explanation. For the purposes income,- (a) the total income or lo for the purpose of agg income or loss comp provisions of "[this Ac of brought forward unabsorbed depreciat section 32: [Provided that in Chapter VI-A for the p effect shall be given losses under Chapter under sub-section (2) o -4- ax for any previous year falling iod; for filing a return of income has of income has been filed, as nil, under clause (c);] ear has not ended or the date of ncome under sub-section (1) of expired, on the basis of entries me or transactions as recorded in and other documents maintained e on or before the date of the relating to such previous years; ettlement has been made under tion 245D, on the basis of such of undisclosed income had been clause (c) of section 158BC, on ssment. of determination of undisclosed oss of each previous year shall, gregation, be taken as the total puted in accordance with the t] without giving effect to set off losses under Chapter VI or tion under sub-section (2) of computing deductions under urposes of the said aggregation, to set off of brought forward VI or unabsorbed depreciation of section 32;] g s

f f s n d e r h n n d

l e f r f r

d n VARINDER SINGH 2024.11.14 14:36 I attest to the accuracy and authencity of this order/judgment

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(b) of a firm, returned inc for each of the previou period shall be the inco deduction of salary, i remuneration by wha partner not being a wo Provided that undisc determined shall not be of the partners, whethe enhancement;]

(c) assessment under sect of income under sub-s section 143.” We find that the words which by the Tribunal to include two t by the assessing officer. First, th e to such evidence and the secon as are available with the Assessi ich may be collected and noticed ny other information and such ot such evidence, the same can also n assessment under Section 158- n the basis of result of search as dings which are in the nature o result of search. The Tribunal rved as under:- “Thus, at every point jewellery or other valuable artic course of search the question is it constitute what has not be -5- come and total income assessed us years falling within the block ome determined before allowing interest, commission, bonus or atever name called "[to any orking partner]: closed income of the firm so e chargeable to tax in the hands er on allocation or on account of tion 143 includes determination section (1) or sub-section (1B) of h have been added are rightly types of material which may be he material found during search nd part is such other materials or ing Officer. Thus, apart from the d during search, if the assessing ther material with him, which is o be looked into for the purpose. -BC of the Act is required to be well as post search enquiry and of consequences of the evidence has, therefore, succinctly and where any money, bullion, cles or thing is found during the s required to be answered, does een or would not have been d k g r y o s f n f y e h r e g s . e d e d

e s n VARINDER SINGH 2024.11.14 14:36 I attest to the accuracy and authencity of this order/judgment

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j A 6. for the assess 7. affidavit of t assessee was been provide 8. were found a documents c mentioned a Company, M running into number of d police cases, No. 51 of 2007 disclosed for the purposes of th much problem in arriving at w relation to the returns of income on the date of the search in q jewellery or other valuable art required to be disclosed for the any return of income but not d basis for "undisclosed income". where the returns of income h date for filing the return of inco return of income itself has not fa a question is not of what has would not have been disclosed Answer to that question wou circumstances of each case.” We, therefore, reject the submis see. The next submission of learned the employees have not been c s not provided sufficient oppor ed to him. We find that plethora of other at the residence of the assessee containing names and father’ s partners in the partnership-de M/s Shanker Lal & Company and o crores paid to Excise Depar documents relating to correspon court cases relating to the firm -6- he Income- tax Act. There is not what has not been disclosed in e that have already been filed as question. If any money, bullion, ticle or thing or any income is e purposes of Income-tax Act in disclosed, they would constitute . More difficulty arises in cases have not been filed but the due me has not expired or where the fallen due. In such cases it is not not been disclosed but of what d for the purposes of the Act. uld depend on the facts and ssions made by learned counsel counsel for the assessee that the considered. It is argued that the rtunity and fair hearing has not material and partnership-deeds e during the search and written s name of persons who are eed relating to M/s Mittal and d original challans of license fee rtment were also found. Large dence with Excise Department, ms carrying out liquor business, t n s

s n e s e e t t

d l e e t s n e d e e , , VARINDER SINGH 2024.11.14 14:36 I attest to the accuracy and authencity of this order/judgment

ITA N

which were n premises. 9. operated by There were 7 position of v search, statem they were s employer an issued by th which the le the assessee Tribunal that evidence and owned and m merely becau would not m undisclosed i 10. persons, who and after the earlier statem come forwar also a docum of one M/s C the assessee undisclosed i No. 51 of 2007 not in the name of the assessee, Copies of number of maps of g various companies were also 7+9+7 truck loads recovered fro various liquor vends was also ments of number of persons wer salesmen working in those v nd real owner of the vends. M he Excise Department for vario arned assessing officer has foun cannot absolve the concerned t the assessing officer is not fla d if he reaches to the conclusio managed by the concerned person use the licenses are not in the na make any difference to reach t income. We also find that there is cr ose statements were relied upon cross-examination was conduct ments was emerged and in some rd to cross-examine, the inferen ment of rent agreement for premi Chander Bhan Om Parkarsh and as a contractor. Thus, the Trib income of the assessee which he -7- , have also been found from his godowns and vends, which were recovered from his premises. om three different places. Stock found. During the courses of re also recorded, who stated that ends. The assessee was their Merely because the license was ous liquor vends, income from nd to be undisclosed income of d assessee. We agree with the attered by the technical rule of on that the vends are all being n singularly through employees, ame of the concerned assessee, it to the conclusion that there is ross-examination of almost all n, was afforded to the assessee ed when nothing contrary to the cases the assessee did not even nce could be drawn. There was ises taken on record in the name Company, which was signed by bunal has found that there was e was earning through ghost and s e . k f t r s m f e f g , t s l e e n s e y s d VARINDER SINGH 2024.11.14 14:36 I attest to the accuracy and authencity of this order/judgment

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benami comp him. The ass the three Judg 11. appellant- M of special ben 12. is dismissed. ITA No. 243 13. Income-Tax, 14. fail as we ha ITAT has ex law which em fact are imm Income Tax Mangalore Maysore (20 also dismisse 15. 16.

14.11.2024 vs Whether spea Whether repo No. 51 of 2007 panies, which were running on sessment order was found to hav ges Bench of the Tribunal. During the course of argume ange Ram Mittal does not press nch of three Judges by the Presid For the reasons recorded above,

3 of 2008

ITA No. 243 of 2008 has been Hisar, against the order of the IT We find that the appeal filed b ave already noticed that specia amined the case on facts and th manates from the order passed b mune from challenge in appea Act as has been held by H Ganesh Beedi Works vs C 15) 378 ITR 640. Therefore, the ed.

Accordingly, both appeals are di No costs.

(SANJ

aking/reasoned

Yes/N ortable

Yes/N -8- the properties taken on rent by ve been correctly re-assessed by ents, learned counsel for the the issue relating to constitution dent of ITAT. the appeal filed by the assessee n filed by the Commissioner of TAT dated 18.08.2006. by the Revenue also deserves to al bench of three Judges of the here is no substantial question of by the Tribunal. Pure findings of als under Section 260A of the Hon’ble the Supreme Court in Commissioner of Income-Tax, e appeal filed by the Revenue is ismissed. JEEV PRAKASH SHARMA)

JUDGE (SANJAY VASHISTH)

JUDGE No No

y y e n e f o e f f e n , s VARINDER SINGH 2024.11.14 14:36 I attest to the accuracy and authencity of this order/judgment