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Commissioner of Income Tax, Muzaffarnagar And Another Versus Shri Rakesh Goyal, Patni Chemicals Ltd.

2015 (3) TMI 544 - ALLAHABAD HIGH COURT

Addition pertaining to the profit - unaccounted sales - addition made on the basis of diary found found from the almirah of Shri Dinesh Kumar, disgruntled employee - A.O. estimated income by applying n.p. @12% restricted to @ 6.5% by ITAT - Held that:- key of the almirah was provided at the time of search by Sri Rakesh Goyal and the same was seized. Later, the almirah was opened and incriminating material was found therein. The entry made in the seized document was already reflected in the books .....

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nal fact finding authority. - Decided against revenue.

Unexplained deposit on various dates in the current account No.4515 in the Oriental Bank of Commerce - Tribunal deleted the addition by observing that the said entry pertaining to the deposit were duly reflected in the books of account - Held that:- The books of account were seized during the course of search and entries were duly reflected at that time. The entries were also reflected in the excise record pertaining to the sale i .....

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e addition of ₹ 4 lacs. When it is so, then there is no occasion for the department to have any grievance by taking this ground in the appeal. The ground was decided by the Tribunal in favour of the Department and it shows that the substantial questions of law have been framed in a casual manner by the department. Therefore, this question neither adjudicated nor any answer is provided. - Decided against assessee.

Unexplained investment in Saharanpur Associates u/s 69 - Tribunal .....

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e. Moreover, it is a question of fact and in the absence of material evidence, we find no reason to interfere with the impugned order and the same is hereby sustained along-with the reasons mentioned here - Decided against revenue.

Capital gain on sale of share - Tribunal deleted the addition holding that the capital gain arising out of sale of share was duly shown during the year 1992-93, while filing regular return - Held that:- when the capital gain on sale of share was duly shown .....

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n of VDIS was not genuine. But the CIT(A) as well as the Tribunal held that the VDIS declared in the name of the wife of the assessee was duly accepted by the department. When it is so, then there is no question for making the addition again. When the amount was bogus in the VDIS then there is no occasion to make any addition, specially when declaration was accepted by the Department. - Decided against revenue.

Investment and income from the money lending business - addition on the ba .....

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we find no reason to interfere with the order passed by the Tribunal and the same is hereby sustained along-with the reasons mentioned herein. - Decided against revenue.

Addition on account of diversion of income in the name of wife of the assessee - grant of relief - Held that:- y considering the rival submission, we are of the opinion that the assessee and Smt. Payal Goyal are the husband and wife in the bedroom, but for the purpose of income tax they are separate and they have fil .....

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a,J. The brief facts of the case are that the assessee during the block period under consideration was carrying the business of manufacturing and sale of calcium carbonate in its factory located at Patni, Chikana Road, Saharanpur. On 17.3.1999, a search and seizure operation was conducted at the business premises of the assessee as well as the residential premises of its Directors. The books of account were found and seized from the office of the company at village Patni and some in premises of .....

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y the A.O. for the assessment year 1996-97 for the assessment year 1999-2000 to the company and to its Director. The said notice has been challenged by them in a writ petition. We have heard the learned counsel for the parties and gone through the material available on record. We decide the appeal as well as the writ petitions as under:- Income Tax Appeal No.192 of 2004:- 1. The Income Tax Appeal No.192 of 2004 is filed by the Department against the impugned order dated 28.11.2003, passed by the .....

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ount of unaccounted purchase was made. The ground was taken in remand report and whether in cases where rate is being applied, it is necessary to do so? 2. Whether the I.T.A.T. is justified in deleting the addition of ₹ 48 lacs despite the fact that the assessee has not been able to prove that these papers do not belong to it and the application of G.P. Rate was based on the past record of the assesse which is the best guide for application of rate? The assessee himself surrendered an amou .....

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t anything found in the premises presumed to be belonging the assessee and the assessee has not discharged its onus? 5. Whether the I.T.A.T. is justified in deleting the addition of ₹ 28.73.759/- on the sole ground that no addition can be made on the basis of diary found from the almirah of Shri Dinesh Kumar ignoring the fact that these are the difference of balances of B-29 taken as actual business transaction and the balances shown in the return of income? 6. Whether the I.T.A.T. is just .....

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H.M. Esufali, H.M. Abdul Ali reported in 90 ITR 271 and the ITAT bench of Pune in the case of Khopade Kisanrao Mnikrao Vs. Asstt. CIT (Pune) (T) (2000) 74 ITD 25 (Pune), which permits such addition. The decision of Hon'ble Allahabad High Court relied upon by the Ld. CIT (A) is not applicable in as much as the Hon'ble High Court has not distinguished the Principle of Law laid by the Hon'ble Supreme Court. 8. Whether the I.T.A.T. is justified in deleting the addition of ₹ 4 lacs .....

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rofit. During the course of search, documents marked as B-29; LP-18; and B-19 were seized from the premises of M/s Thrill Hotel Pvt. Ltd.. The document B-29 was not in the handwriting of Shri Rakesh Goyal, Director of the Company. But on the basis of an entry, the A.O. made the addition of ₹ 48 lacs by observing that the transaction recorded on the impugned document was the transaction pertaining to the sale of goods out side the book of account, so, he has estimated the turnover as ₹ .....

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essee during the assessment year under consideration. 5. By considering the totality of the facts and circumstances of the case and on perusal of the record, it appears that the key of the almirah was provided at the time of search by Sri Rakesh Goyal and the same was seized. Later, the almirah was opened and incriminating material was found therein. The entry made in the seized document was already reflected in the books of account. The said slip can be treated as 'Yaaddast Parcha' i.e. .....

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sons mentioned therein. 6. The substantial question of law No.5 is related to addition of ₹ 28,73,759/-. The A.O. has made the addition by taking balance on the seized document marked as B-29. But, by picking up balance in the regular books of accounts as on 31 March, 1998, the Tribunal has deleted the addition by holding that the balance shown in the loose papers cannot be taken into consideration in the block assessment, especially when the return was already on record for the Block peri .....

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under Section 145 of the Act. Hence, there is no question to enhance the income on estimate basis by the A.O. In the circumstances, both the appellate authorities have rightly deleted the addition and the same is hereby sustained along-with the reasons mentioned herein. 8. The substantial questions of law Nos.6 & 7 are related to addition of ₹ 42,15,000/- made on account of unexplained deposit on various dates in the current account No.4515 in the Oriental Bank of Commerce. The A.O. p .....

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lso reflected in the excise record pertaining to the sale in-cash and the availability of cash with the assessee on the date of cash deposit in the bank. When it is so, then we find no reason to interfere with the impugned order passed by the Tribunal and the same is hereby sustained along-with the reasons mentioned therein. 10. The substantial question of law No.8 is related to addition of ₹ 4 lacs on account of unexplained deposit in the form of bid money. From the impugned order, it app .....

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judicated nor any answer is provided. 11. The answer to all the substantial questions of law is in favour of the assessee and against the Department. In the result the appeal filed by the Department is dismissed. Income Tax Appeal No.189 of 2004:- 12. This Appeal is filed by the Department against the impugned order dated 9.12.2003, passed by the Income Tax Appellate Tribunal, Delhi in IT(SS) Appeal No.109 and 232(Del)/2002 for the block period 1.4.1988 to 17.3.1999. 13. On 2.9.2009, a coordinat .....

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duly been proved and further the finding of the I.T.A.T. is not contrary to the finding recorded in the case of M/s Patni Chemicals (A Company controlled by the assessee) and the provision of the Section 69 has not been violated.? 2. Whether the I.T.A.T. is justified in approving the order of Ld. C.I.T. (Appeal) deleting the addition of ₹ 20 lacs on a/c of gift with the finding that such additions should be considered in the regular assessment despite the fact that fresh facts came to ligh .....

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d in approving the order of Ld. C.I.T.(Appeal) deleting addition of ₹ 10,11,885/- on a/c of capital gain with the finding that such additions should be considered in regular assessment despite the fresh fact came to light and the assessee could not furnish complete details and the broker Blue Chips Investment Ltd. expressed his inability to trace the record and whether the finding is not contrary to the retrospective amendment in the computation of undisclosed income as contain in section .....

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which is sufficient and valid reason for disbelieving the declaration in VDIS? 5. Whether the I.T.A.T. is justified in upholding the finding of Ld. CIT (appeal) in granting relief of ₹ 1,47,000/- on a/c of seven gift received in the name of minor children on the ground that gift tax returns were filed, ignoring the fact that this was a device of capital formation in as much as the copies of seven gifts tax returns were found in the possession of assessee during the course of search? 6. Whe .....

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ng of Ld. CIT(Apeal) deleting the addition of ₹ 67,50,000/- being 45% share in Thrill Hotel Pvt. Ltd. Without appreciating the full facts of the case and the documents by way of contents of written letter and value of land taken for stamp purposes? 8. Whether the I.T.A.T. is justified in confirming the order of Ltd. CIT (Appeal) granting relief of ₹ 4,37,569/- on account of diversion of income in the name of smt. Parul Goel, ignoring the fact that Smt. Parul Goel, wife of the assesse .....

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t made by the assessee in M/s Saharanpur Associates. The first appellate authority has made the addition of ₹ 15,25,000/- by giving relief to the assessee of ₹ 8,50,000/-. However, the Tribunal has given the entire relief to the assessee of ₹ 23,75,000/-. 15. After hearing the submissions of the learned counsel for the parties, it appears that during the course of search, a diary was found in which at page 78, some details were mentioned pertaining to the contract of river bed .....

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5,000/- was recorded in the hands of assessee. 16. During the course of arguments the representative of the department has relied upon the A.O. order and he has stated that the assessee was the partner of M/s Saharanpur Associates, neither any proper explanation was given nor any documentary evidence was submitted by the assessee pertaining to the transaction, so the addition was rightly made under Section 69 of the I.T. Act. 17. On the other hand, learned counsel for the assessee submitted that .....

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aharanpur and the same was duly disclosed in the income tax return year after year. It is the submission of the learned counsel that the during the search at M/s Saharanpur Associates, the entry was found in the name of company's account, but the name of the assessee was not mentioned. 18. By considering the rival submissions and on perusal of material available on record, it appears that neither the copies of the documents on which basis the addition was made for ₹ 15,25,000/- confron .....

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ustained along-with the reasons mentioned herein. 19. The substantial question of law No.3 is pertaining to addition of ₹ 10,11,885 on account of capital gain. The A.O. has made the addition of ₹ 10,11,885/- on account of capital gain on sale of share. The CIT (A) as well as the Tribunal have deleted the addition by holding that the capital gain arising out of sale of share was duly shown during the year 1992-93, while filing regular return. 20. After hearing the learned counsel for .....

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mely Smt. Parul Goyal. 22. After hearing both the parties and on perusal of material available on record, it appears that wife of the assessee namely Smt. Parul Goyal had availed the benefit of VDIS Scheme, 1997 and disclosed jewellery of ₹ 18,57,384/-. The A.O. observed that the declaration of VDIS was not genuine. But the CIT(A) as well as the Tribunal held that the VDIS declared in the name of the wife of the assessee was duly accepted by the department. When it is so, then there is no .....

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dren of the assessee. Various gifts were received by the minor son of the assessee and the gift tax returns were filed during the relevant period of time. So, the CIT(A) has deleted the addition by accepting the gifts as genuine. The Tribunal has rightly observed that when the gift tax return and regular return were duly filed at the relevant time, then there is no question for making the addition again. We agree with it. 24. The substantial question of law No.6 is pertaining to addition of S .....

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e assessee was dealing in the business of money lending and accordingly, he estimated the investment in money lending at ₹ 10 lacs and likewise the figure of ₹ 2,50,000/- was altered by ₹ 2,75,000/-. The CIT(A) has deleted the addition by observing that the said papers were deaf and dumb documents as no details were mentioned except amount and also no name was mentioned. The Tribunal upheld the same. The Tribunal observed that these documents are simple deaf and dumb documents, .....

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Thrill Hotel Pvt. Ltd., the property was purchased in the year 1997 for which an agreement was executed on 12.5.1989. The A.O. has made the addition by observing that a paper was found from the possession and control of Shri Nand Kishore Goyal, father of the assessee, who was living upstairs in the same residential premises and recovery was made from him was inventorised separately and block assessment order was passed in his case. The addition, if any, i.e. in the hands of Shri Nand Kishore Go .....

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f and came to the conclusion that her income is the income of the assessee. The CIT(A) has deleted the said addition by observing that Smt. Parul Goyal had filed regular return since long, therefore, she is independent. 27. By considering the rival submission, we are of the opinion that the assessee and Smt. Payal Goyal are the husband and wife in the bedroom, but for the purpose of income tax they are separate and they have filed their separate return since long, which were accepted by the depa .....

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