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RB. Shreeram Durgaprasad (P) Limited Versus The Commissioner of Income-tax, Vidarbha & Marathwada, Nagpur

2015 (5) TMI 437 - BOMBAY HIGH COURT

Income from under invoicing in respect of export transactions - unaccounted business and hundi loans - Held that:- Official Liquidator has filed written statement along with pursis as Exh. A. The said written statement is prepared by Chartered Accountant assisting the Official Liquidator. The parties do not dispute that income of ₹ 1.71 crore was included in the income of R.B.S.D. Export firm from the Assessment years 1950-51 to 1958-59. As the other assessee is not party before us and add .....

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vate Limited company. It has concealed that income and clandestinely made it over to export firm. Thus, its ownership over said amount of ₹ 1.71 Crore is not in dispute. The amount really belonged to it and, therefore, it was and is answerable and has to pay tax on it. It cannot be permitted to urge that as Export firm has paid tax on that amount, the same cannot be demanded from it. The mischief of assessee Private Limited company has been detected and it cannot be permitted to take any a .....

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t firm has to pay tax as it has actually utilized that amount as its income while the Private Limited Company (assessee) has to pay tax as it attempted to conceal that income. The income really belongs to it and it was and is answerable to pay tax upon it. In this situation, we find that the concept of double taxation is not attracted in the present matter. Tribunal was justified in sustaining addition of ₹ 1.71 Crore as income of the assessee. - Decided against assessee. - Income Tax Refe .....

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Seventy one lacs only) was included in the income of M/s. R.B.S.D. (export firm) for assessment years 1950-51 to 1958-59; and 2. Whether on the facts and circumstances of the case, the Tribunal was justified in law in sustaining the addition of ₹ 1.71 crores (Rs. One crore Seventy one lacs only) as the income of assessee from under invoicing in respect of export transactions ? 2. Accordingly, we have heard Shri De, learned counsel for the applicant Official Liquidator as assessee company i .....

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Liquidator has not disputed facts disclosed in para 3 to para 13 of the statement of the case dated 15.03.1993 forwarded by the I.T.A.T. In fact, Official Liquidator has filed written statement along with pursis as Exh. A. The said written statement is prepared by Chartered Accountant assisting the Official Liquidator. The parties do not dispute that income of ₹ 1.71 crore was included in the income of R.B.S.D. Export firm from the Assessment years 1950-51 to 1958-59. In this situation, s .....

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rder of Limited Company. Because question was so framed, I.T.A.T. took assistance of findings of fact reached in the matter of export firm. I.T.A.T., however, has pointed out that said Export Firm is not the applicant in Reference Application Nos. 250 to 252/Nag/7374. 5. The assessee Private Limited Company and the other assessee (Export firm - not party), appeared to be two units which belong to a group of companies commonly known as Durgaprasad and More group of companies. Both assessees deal .....

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ssessments of both assessee were reopened under Section 148 of the Income Tax Act. As niceties of under invoicing which have come on record are not in dispute, it is not necessary to go into those details. The Assessing Officer came to a conclusion that there was unaccounted business and there were also hundi loans from various parties at Rajasthan and transactions of ostensible loans from Bengal Investment Corporation, Calcutta, which were not genuine loans. He asked assessee to rebut the provi .....

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regular books of accounts disguised as Hundi loans or other kinds of loans. As these facts are not in dispute, we do not find it necessary to delve more into the matter. The Chartered Accountant who has prepared written submissions on behalf of the Official Liquidator has also reproduced relevant findings in his written notes. He has alleged that I.T.A.T. had confirmed additions of ₹ 2,21,20,963.00 during the Assessment years 1950-51 to 1958-59. He has also remarked that additions as pres .....

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e of ₹ 1,70,90,669/is already assessed to tax at the hands of Export firm, Private Limited company cannot be called upon to pay tax upon that income again. 8. Shri De, learned counsel, has relied upon Circular No. 157 dated 26.12.1974 and judgment of the Hon'ble Apex Court in the case of Income Tax Officer vs. Bachu Lal Kapoor (1966) 60 ITR 0074, to urge that same income cannot be taxed twice. 9. Shri Parchure, learned counsel has invited attention to findings recorded by I.T.A.T. to c .....

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rtment to tax either the representative assessee or the beneficial owner of the income nor the parallel provisions of Income Tax Act, 1961, contemplated assessment of the same income both in the hands of the trustees and the beneficiaries, instances reveal that such double assessment was being carried out. This circular mentions that general principle is to charge income only once. Board has, therefore, clarified that in order to see that there is no loss of revenue, Income Tax Officer should ke .....

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representative assessee or then income of beneficial owner/ trustee. Very same income cannot be subjected to tax at the hands of representative assessee as also its beneficial owner/ trustee. 11. The judgment of the Hon'ble Apex Court in the case of ITO vs. Bachu Lal Kapoor (supra) speaks of assessment of a HUF. The Hon'ble Apex Court has held that a HUF as a separate unit of assessment, entitled to be assessed as distinct entity. Being person, it is liable to be taxed in respect of its .....

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thereof in respect of the income of the family. Thus, here the Hon'ble Apex Court has recognized HUF as a representative assessee. In this judgment in para 11, the Hon'ble Apex Court has considered arguments on double taxation. Contention before the Hon'ble Apex Court was, as the orders of assessment on the individual members of the family had become final, permitting ITO to assess the HUF for the same assessment year, would be imposing tax on same income twice. The Hon'ble Apex .....

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some mistake, such income was assessed to tax in the hands of the individual members (which should not have been done), the revenue has to make appropriate adjustments as otherwise assessment made in respect of that income on the HUF would be contrary to the provisions of the Act. The Hon'ble Apex Court has also observed that appropriate adjustments by revenue in such matter is not reopening of final orders of assessment but in reality, to arrive at the correct figure of tax payable by the H .....

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e Hon'ble Apex Court has considered the question whether the same income cannot be taxed twice, once in the hands of the creditors and again in the hands of the assessee. The Hon'ble Apex Court observes that in a case of the description as before it, there was no question of double taxation. The Hon'ble Apex Court observes the situation is of the assessee's own making in getting false declarations filed in the names of the creditors with a view to avoid higher slab of taxation. O .....

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e taxes must be (1) imposed on the same property, (2) by same State or Government; (3) during the same taxing period; and (4) for the same purpose. There is no double taxation where (a) the taxes are imposed by different States, (b) one of the impositions is not a tax, (c) one tax is against property and the other is not a property tax, or (d) the double taxation is indirect rather than direct. Thus, in this background, when present facts are examined, it is apparent that the assessee Private Li .....

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