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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF APRIL 2016
PRESENT
THE HON’BLE MR.JUSTICE JAYANT PATEL AND THE HON’BLE MRS.JUSTICE B.V.NAGARATHNA ITA NO.347/2015 C/W ITA NO.348/2015
IN ITA NO.347/2015 BETWEEN:
PRINCIPAL COMMISSIONER OF INCOME TAX, C.R.BUILDING, QUEENS ROAD, BANGALORE-560 001
THE DEPUTY COMMISSIONER OF
INCOME TAX
CENTRAL CIRCLE-2(1),
BANGALORE
... APPELLANTS (BY SRI.E.I.SANMATHI, ADVOCATE)
2 AND:
SRI. C. RAMAKRISHNA NO.827, 7TH CROSS, 1ST MAIN ROAD, BSK 3RD STAGE, 3RD BLOCK, 3RD PHASE, BANGALORE-85, PAN ADVPR 6480M
...RESPONDENT
THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED:31/10/2014 PASSED IN ITA NO.655/BANG/2013, FOR THE ASSESSMENT YEAR 2007-2008 PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED:31/10/2014 PASSED BY THE ITAT, 'B' BENCH, BENGALURU, IN APPEAL PROCEEDINGS NO. ITA NO. 655/BANG/2013 FOR ASSESSMENT YEAR 2007-08, AS SOUGHT FOR IN THIS APPEAL AND TO GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE.
IN ITA NO.348/2015 BETWEEN:
PRINCIPAL COMMISSIONER OF INCOME TAX, C.R.BUILDING, QUEENS ROAD, BANGALORE-560 001
3 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(1),
BANGALORE
...APPELLANTS (BY SRI.E.I.SANMATHI, ADVOCATE)
AND:
SRI. C. RAMAKRISHNA NO.827, 7TH CROSS, 1ST MAIN ROAD, BSK 3RD STAGE, 3RD BLOCK, 3RD PHASE, BANGALORE-85, PAN ADVPR 6480M
...RESPONDENT
THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED:31/10/2014 PASSED IN ITA NO.656/BANG/2013, FOR THE ASSESSMENT YEAR 2008-09 PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED: 31/10/2014 PASSED BY THE ITAT, 'B' BENCH, BANGALORE, IN APPEAL PROCEEDINGS NO. ITA NO. 656/BANG/2013 FOR ASSESSMENT YEAR 2008-09, AS SOUGHT FOR IN THIS APPEAL AND TO GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE.
THESE APPEALS COMING ON FOR ADMISSION THIS DAY, JAYANT PATEL J., DELIVERED THE FOLLOWING:
4 JUDGMENT
The appellants-Revenue have preferred the present appeals by raising the following substantial questions of law:
Whether, on the facts and in the circumstances of the case, the decision of Tribunal suffers from perversity and infirmity insofar as two different inferences have been drawn in deciding addition made by the assessing officer on advance paid and interest earned thereon based on the evidences on the same seized documents?
Whether, on the facts and in the circumstances of the case, the Tribunal were right in law in confirming the order of the Commissioner of Income Tax (Appeals) in deleting the addition of Rs.59,81,951 for assessment year 2007-08 made by the Assessing Officer based on the evidences seized during the course of search while at the
5 same time confirming similar addition made for assessment year 2009-10 drawing two different inferences on the same evidence?
Whether, on the facts and in the circumstances of the case, the Tribunal were right in confirming the order of the Commissioner of Income Tax (Appeals) in deleting the additions of Rs.1,08,22,620 and Rs.63,03,000 for assessment year 2008-09 made by the Assessing Officer based on the evidences seized during the course of search while at the same time confirming similar addition made for assessment year 2009-10 drawing two different inferences on the same evidence?”
We have heard Mr.E.I.Sanmathi, learned Counsel appearing for the appellants.
We may record that the Tribunal while considering the aforesaid aspects at para 7.3 has observed thus:
“7.3 We have heard both the learned Departmental Representative for revenue and the learned Authorised Representative of the assessee. It is not in dispute that the basis for the additions made by the Assessing Officer is the seized material at pages 3 to 6 of A/1/MKP; seized from the office premises of M/s.Mookambika Promoters, belonging to the S.Chandrashekar group of cases/concerns. The documents were not seized from the assessee. The relevant documents do contain entries suggesting some money transactions between the assessee and another person by the name of Sri Atul Kumar. It is also evident from the orders of the authorities below that this person, Sri Atul Kumar has neither been identified nor examined in the matter. The person from whose premises the documents in question were seized has also denied knowledge of any such transaction having taken place. Other than the loose papers pages 3 to 6 of seized material A/1/MKP found and seized from the premises of a firm
7 in which a third person is partner, the Assessing Officer has failed to bring on record any substantive corroborative material evidencing that the transactions in question had actually taken place. As such, in our view, the Assessing Officer has not been able to substantiate or establish with any material evidence his conclusion that the entries in the documents at pages 3 to 6 in A/1/MKP represents some transaction which had actually transpired. In view of the facts and circumstances of the case as discussed above, we find no requirement for interference with the decision of the learned CIT (Appeals) in deleting the additions made by the Assessing Officer i.e. Rs.75,88,800 and Rs.32,33,820. Consequently Ground No.1 raised by Revenue is dismissed.”
Further the Tribunal at paras 8.3.1 to 9 has observed thus:
8 “8.3.1 We have heard the rival submissions of both the learned Departmental representative for revenue and the learned Authorised Representative for the assessee and perused and carefully considered the material on record. It is not in dispute that the basis for the addition made is page 1 of loose papers A/1/MKP seized not from the possession of the assessee but from the office premises of M/s. Mookambika Promoters belonging to the S.Chandrasekhar group of concerns. The learned CIT (Appeals) has observed that the document contains entries suggesting money transactions related to a property deal, between the assessee and Shri.S.Chandrasekhar. The person from whose possession the documents were seized, Shri.S.Chandrasekhar has also denied that any such transaction had taken place. Other than the seized document at page 1 of A/1/MKP found in the possession of the other person, the Assessing Officer has not brought on record any substantive material evidence to establish that the transaction had actually taken place. In this factual matrix, we concur with the finding
9 of the learned CIT (Appeals) that the Assessing Officer has failed to substantiate with material evidence his stand that the entries at page 1 of seized material A/1/MKP represent undisclosed advances given by the assessee to Shri.S.Chandrasekhar. In view of the above, we find no reason to interfere with the finding of the learned CIT (Appeals) in deleting the additions made and consequently uphold her decision in the matter. We, accordingly dismiss ground No.2 raised by revenue.
In the result, revenue’s appeal for Assessment Year 2008-09 is dismissed.”
The aforesaid shows that before CIT (Appeals) as well as before the Income Tax Appellate Tribunal, the fact as to whether the transaction had taken place or not, in case of Mr.Atul Kumar was not proved. Even in case of S.Chandrasekhar, substantive material evidence to establish that the transaction had actually taken place was also not let in.
Under these circumstances, the Tribunal has confirmed the view taken by the CIT (Appeals) for deletion of the addition made and the appeals of the revenue were dismissed.
As such, in our view, the aforesaid aspects would fall in the arena of appreciation of evidence and finding to be given on facts which would be outside the scope of the present appeals which is limited to judicial scrutiny of substantial questions of law.
However, Mr.E.I.Sanmathi, learned Counsel appearing for the appellants contended that question No.1 would arise, since the Tribunal in respect of the very documents seized from the premises of other person has accepted the claim of the department for the assessment year 2009-2010, but did not accept the stand of the Revenue in respect of the assessment years 2007-08 and 2008-2009 and therefore it can be said that there is perversity in the finding of the Tribunal.
Had it been the same document pertaining to the very transaction, one might gather that there may be perversity but it is not pertaining to the same transaction. Further in case of the entry for the assessment year 2009-2010 the transaction for payment was confirmed which were lacking for the assessment years of 2007-2008 and 2008-2009. Under these circumstances, if a different view is taken, it cannot be said that the finding is perverse as sought to be canvassed.
In our view, no substantial questions of law would arise for consideration. Hence, the appeals are dismissed.
Sd/- JUDGE
Sd/- JUDGE JT/-