TMI Blog2009 (8) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... i J .- All the three appeals being directed against identical, though separate orders each dated August 2, 2006, passed by the Income-tax Appellate Tribunal, Guwahati Bench, (hereinafter referred to as "the Tribunal" ) were heard together and are being decided by the present common judgment and order. 2. A recital of the facts involved in Income-tax Appeal No. 21 of 2006 would adequately sum up the fact involved in the other two cases. Income-tax Appeal No. 21 of 2006 3. For the assessment year 1994-95, the assessment of the appellant was completed on March 28, 1998. In the appeal filed by the assessee the Commissioner of Income-tax (Appeals), by order dated May 19, 1998, set aside the assessment order of the primary authority with the direction to redo the same in accordance with the directions contained in the appellate order dated May 19, 1998. Thereafter, the Assessing Officer completed the assessment by order dated September 20, 1998, adding a sum of Rs.44,75,930 to the income of the assessee as unexplained investments under section 69 of the Income-tax Act, 1961 (hereinafter referred to as " the Act" ). 4. It will be necessary to take note of the fact that during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad accumulated agricultural income to his credit. The aforesaid conclusion was reached primarily on the basis that no finding was recorded by the Assessing Officer that the assessee did not have any agricultural income. Furthermore, the learned Commissioner (Appeals), after holding that the Assessing Officer had also not expressed any disagreement with the quantum of agricultural income claimed by the assessee, proceeded to quantify the same at Rs. 41,83,671, as claimed by the assessee. Accordingly, the appeal filed by the assessee was allowed with the direction for modification of the order of assessment by treating the unexplained investments to be to the extent of Rs. 2,92,259 (Rs. 44,75,930 minus Rs. 41,83,671). 6. The facts involved in Income-tax Appeal No. 22 of 2006 (assessment year 1994-95) and Income-tax Appeal No. 20 of 2006 (assessment year 1995-96) are largely similar to those involved in Income-tax Appeal No. 21 of 2006. The appellant-assessee in the aforesaid two cases is the wife of the appellant in Income-tax Appeal No. 21 of 2006. The additional facts that will be required to be noticed is that the unexplained investments added by the Assessing Officer to the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he substantial question of law framed by this court while admitting the appeals centres around the question as to whether the learned Tribunal was right in coming to the aforesaid conclusion merely on the ground that the assessees had not filed any return of agricultural income under the provisions of the Assam Agricultural Income-tax Act, 1939? 10. We have heard Dr. A. K. Saraf, learned, counsel appearing for the appellants and Sri U. Bhuyan, learned standing counsel, Income-tax Department. 11. Dr. Saraf, in the course of a long and elaborate argument, has contended that the assessees had placed before the Assessing Officer several documents in support of the claims made that the bank deposits and other investments were relatable to the accumulated agricultural income of the assessees. Such documents and certificates were issued by authorized officers of the State Government. Dr. Saraf has contended that the Assessing Officer had wrongly placed reliance on the judgment of the apex court in S. N. Namasivayam Chettiar [1960] 38 ITR 579 in rejecting the books of account of the assessees and further that the Assessing Officer had accepted the agricultural income of the assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Tribunal, according to Dr.Saraf, the learned Tribunal had committed a manifest error of law in coming to the impugned conclusion. 13. Controverting the submissions advanced on behalf of the appellants-assessees, Sri Bhuyan, learned standing counsel, Income-tax Department, has submitted that the details and materials placed on record by the assessees including the documents and certificates issued by different authorities were duly considered by the learned Tribunal as indicated by the orders under challenge. The credibility of the assessees' version in the light of the documents brought on record were weighed by the learned Tribunal along with the fact that the assessees had not filed any return(s) of the agricultural income at any earlier point of time, notwithstanding which accumulated agricultural income over the years was claimed. In this regard, Sri Bhuyan has pointed out that for the assessment year 1994-95 the assessees had filed copies of the assessment under the Assam Agricultural Income-tax Act which was duly accepted by the Assessing Officer and income from agriculture as assessed by the authorities under the local Act were excluded while making the additions t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f which conclusion several reasons were cited. It is in that context that the apex court had held that " keeping of a stock register was of great importance because that was a means of verifying the assessees' accounts by having a " quantitative tally" . The apex court in S. N. Namasivayam Chettiar [1960] 38 ITR 579 further held that (page 588): " if, after taking into account all the materials including the want of a stock register, it is found that from the method of accounting the correct profits of the business were not deducible, the operation of the proviso to section 13 of the Income-tax Act would be attracted." No law was laid down by the apex court that if in a given case the stock register is not maintained the only consequence thereof should be rejection of the books of account of the assessee. We are, therefore, of the view that the Assessing Officer was wrong in rejecting the books of account of the assessee. The case projected by the assessee, therefore, ought to have been considered on its own merits. However, the Assessing Officer had no occasion to do so. 17. In appeal, the learned Commissioner (Appeals) proceeded on the basis that no adverse conclusion regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled was the only basis for the eventual conclusion recorded by the learned Tribunal that the explanation offered by the assessees, i.e., availability of accumulated agricultural income was an afterthought. What was required to be done was a judicious determination of the issue on a balanced consideration of the two aspects of the case. Instead one set of material facts was overlooked/ignored and reliance was placed exclusively on the other. In doing so, the learned Tribunal can very well be understood to have held that since no returns were filed the assessees could not have had any agricultural income. Such a proposition will not be supported by any sound principle of law. The learned Tribunal, therefore, clearly acted with material irregularity in the exercise of its jurisdiction vested by law. Consequently and in fitness of things the exercise will be required to be performed by the learned Tribunal once again. 20. In the result, all the appeals filed by the assessees will have to be allowed. Accordingly, the impugned orders dated August 2, 2006, passed by the Income-tax Appellate Tribunal are set aside and the matters are remitted to the learned Tribunal for a fresh decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
