TMI Blog2018 (9) TMI 1784X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mukesh Agrawal, learned counsel ORDER Per : S. C. Sharma, J.: Regard being had to the similitude in the controversy involved in the present cases, the writ petitions were analogously heard and by a common order, they are being disposed of by this Court. Facts of I.T.A.No.140/2016 are narrated hereunder. 02-The present appeal has been filed under Section 260-A of the Income Tax Act, 1961 against the consolidated order dated 17/05/2016. 03-The brief facts of the case reveal that the assessee, who is an individual and is engaged in trading of bullion commodity, was subjected to scrutiny assessment and the same was completed under Section 153-A read with Section 143(3) of the Income Tax Act, 1961 on 28/03/2213. The total income was assessed as ₹ 27,90,33,030/-. 04-The Assessing Officer has rejected the Books of Accounts of the assessee and additions were made on account of Unaccounted Stock, Unexplained Credit under Section 68, Unaccounted Purchase, Unexplained Credit under Section 68, Estimation of Gross Profit on sale of Gold Bar and Estimation of Gross Profit on sale of Gold Bar again. 05-The assessee being aggrieved by the order passed by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o enhanced the total turnover by 17.5% for these years and made the addition. 13. We further find that the CIT(Appeals) vide para-14 of the order concluded that method of estimation of profit adopted by AO was defective and faulty hence such estimation of income was rejected for all the years in relation to gross profit on sales of gold bullion. Similar defects were also there in estimation of profit by AO on sale of silver bars hence that estimation was also rejected. However, the learned CIT(A) grouped the sales of gold bullion and silver bullion together at ₹ 10,35,53,58,633/- (i.e. gold bullion ₹ 10,30,03,690/- and silver bullion ₹ 5,50,01,943/-) for A.Y. 2011-12. Similarly, the learned CIT(A) grouped the sales of gold bullion and silver bullion together at ₹ 585,95,67,563/- (i.e. gold bullion ₹ 584,67,73,769/- and silver bullion ₹ 1,27,93,794/-) for A.Y. 2010-11 and by making enhancement of 17.5% on aggregate sales, the learned CIT(A) applied gross profit rate of 1.25%. 14. We further find that the additions in silver bullion account were made by the Assessing Officer at ₹ 9,65,123/- and ₹ 40,69,563/- in A.Y. 2010-11 2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o enhance the turnover by 5% for the assessment year 2010-11. We direct accordingly. Since we are accepting the GP rate declared for the assessment year 2009-10 in the absence of any incriminating documents for the relevant period and better book results in comparison to succeeding years and no defect in books of accounts was found by the authorities below for assessment year 2009-10, therefore, we direct to accept the book results for the assessment year 2009-10. The gold prices were also increased during the relevant period. The average gold price for the period relevant to the assessment year 2007- 08 was ₹ 8.36 lacs per kg. which increased to ₹ 16.32lacs per kg for the period relevant to the assessment year 2010-11 and ₹ 20,72,000/- for the period relevant to assessment year 2011-12. We also observe that whenever there is tremendous increase in the price of gold, the margin of profit shrinks. Gold market is well informed marked and guided by international price. There was VAT of 1% on the recorded trading of gold. Thus, the gross profit estimated on unrecorded sales cannot be applied to the recorded sales as the margin of tax also remains with the seller of un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. CIT(A), due to which addition was deleted ? The aforesaid so called question framed by the Department is purely a question of fact and the ITAT has given a detailed finding in favour of the assessee after scrutinizing the facts and no substantial question of law is involved. The findings arrived at by the Income Tax Tribunal are after considering the facts on record. The Tribunal endorsed the following reasoning, as reproduced below, while deleting the addition of ₹ 2,02,47,590/- on account of unaccounted investment in Assessment Year 2009-10. Relevant paragraphs i.e. paragraphs No.17 to 21 of the order passed by the ITAT reads as under:- 17. Ground no. 5 in IT(SS) A No. 241/Ind/2015 (assessee s appeal) and ground no. 6 in IT(SS) A No. 254/Ind/2015 (revenue s appeal) is regarding the addition sustained of ₹ 2,02,47,590/ - on account of unaccounted investment in A.Y. 2009-10. 18. The facts, in brief, are that on 26.1.2010 the police intercepted two persons with 30 silver bars weighing 919.276 kgs valued at ₹ 2,02,47,590/-. They were transferring the bullion from the residence of the assessee at Gumasta Nagar to his office at Chhota Sarafa, Indore. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o produced. Since it was an imported material and the bar numbers were inscribed on the seized bars which tallied with the purchase bills, we find no merit in sustaining such addition. We, therefore, direct to delete the same. 09-The another question i.e. question No.5 raised by the appellant / Income Tax Department reads as under:- Whether on the facts and in the circumstances of the case and in law the ITAT was justified in deleting the addition of ₹ 17,85,88,277/- by not providing the basis or contrary finding to the reasons given in assessment order as well as in order of Ld. CIT(A), due to which addition was deleted ? The respondent assessee submits that the aforesaid question is also a question of fact and ITAT has given a detailed fact finding in favour of the assessee after scrutinizing the facts and as such no substantial question of law is involved in this case. The findings arrived at by the Income Tax Tribunal are after considering the facts on record. The Tribunal endorsed the following reasoning in respect of the aforesaid question, as reproduced below, while deleting the addition of ₹ 17,85,88,277/- on account of purchase made from M/s. Hyunda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 26. The learned counsel for the assessee submitted that the Assessing Officer made the addition of ₹ 17,85,88,277/- in a small paragraph with a remark that the assessee has shown purchases of gold and silver from Hyundai Exports since the assessee could produce the original bill to the tune of ₹ 12,56,94,400/- only and remaining bills could not be produced. He further submitted that the Assessing Officer observed that on some of the bills official seal of the seller was not affixed, receiver of the bill has also not signed, the date of order and column of order number and delivery memo are found blank and various bills were signed by different persons. He submitted that confirmed ledger copy of account was filed from the firm Hyundai Exports. They have confirmed the purchases made by the assessee. For all these purchases, the assessee has made advance payments through banking channels, which is evident from page 168 of the paper book and copies of all the bank statements were filed during the assessment proceedings and all the entries in connection with the payment for these purchases were recorded in the books of accounts. He also pleaded that before the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Act, 1961 is attracted. On the facts and material produced before the Assessing Officer, the additions are made on account of sales, purchases and brokerages. Whether the sales, purchases and brokerages were genuine or not is basically a question of fact and this Court is of the opinion that the finding on fact is not perverse. 12-Question No.6 raised by the appellant / Income Tax Department reads as under:- Whether, on the facts and in the circumstances of the case and in law the ITAT was justified in deleting the addition of ₹ 50,00,000/- by not providing the basis or contrary finding to the reasons given in assessment order, as well as in order of Ld. CIT(A), due to which addition was deleted ? The aforesaid question No.6 is also a question of fact and the ITAT has given detailed finding in favour of the assessee after scrutinizing the facts and as such no substantial question of law is involved in this case. The findings arrived at by the Income Tax Tribunal in respect of the aforesaid question in paragraphs No.29 to 32 reads as under:- 29. Ground no. 7 in IT(SS) A No. 241/Ind/2015 is regarding sustenance of addition of ₹ 50 lacs made u/s 68 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee failed to prove its case before the learned CIT(A) and as such he was fully justified in maintaining the addition made by the Assessing Officer. 32. We have heard both the sides. We find from the bank statement of M/s Pramila Investment Finance Limited that there was bank balance of ₹ 32.5 lacs on the last date of the financial year i.e. on 31.3.2009. The interest was paid after deducting TDS. These facts are sufficient to establish that the assessee was able to be discharge the obligation casted upon him u/s 68 of the Act by establishing the identity, creditworthiness and genuineness of the transaction. In this view of the matter, we have no alternate but to delete the addition. Accordingly we direct the Assessing Officer to delete the addition. This ground of the assessee is, therefore, allowed. 13-Thus, it is evident that the the aforesaid question is purely a question of fact. The respondent assessee has further submitted that the question No.6 raised in this appeal is not question of law but it is a pure question of facts which have been decided by the Tribunal as a last authority on facts by analyzing the relevant documents placed before it b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.7 and the same reads as under:- Whether, on the facts and in the circumstances of the case and in law, the ITAT was justified in law in upholding the deletion of the addition of ₹ 45,00,000/- by Ld. CIT (A) by not providing the basis or contrary finding to the reasons given in assessment order, due to which addition was deleted ? The aforesaid question No.7 is again a purely in the realm of facts and both the first appellate authority as well as the second appellate authority have given concurrent findings in favour of the assessee respondent after scrutinizing the facts and as such no substantial question of law is involved in this case. The findings arrived at by the first appellate authority i.e. the CIT (A) reads as under:- 17. Gr. no. 9 of appeal is against addition of ₹ 45 lakh u/s 68 of the I.T. Act on the ground of repayment of amount from M/s MP real Estate. The said sum of ₹ 45 lakh was invested by appellant in that firm M/s MP Real Estate Developers, in earlier years and in this year, such amount of partner s contribution was merely returned back by that firm hence it cannot be added as cash credit u/s 68 of I.T., as it is merely refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the question should emerge from the sustainable findings of fact arrived at by court of facts and it must be necessary to decide that question of law for a just and proper decision of the case. An entirely new point raised for the first time before the High Court is not a question involved in the case unless it goes to the root of the matter. It will, therefore, depend on the facts and circumstance of each case whether a question of law is a substantial one and involved in the case, or not; the paramount overall consideration being the need for striking a judicious balance between the indispensable obligation to do justice at all stages and impelling necessity of avoiding prolongation in the life of any lis. 22-In the case of Mangalore Ganesh Beedi Works Vs. Commissioner of Income Tax, Mysore reported the (2015) 378 ITR 640 (SC), the apex Court has held as under:- 19. We are not at all impressed with the submission of learned counsel for the Revenue. There is a clear finding of fact by the Tribunal that the legal expenses incurred by the Assessee were for protecting its business and that the expenses were incurred after 18th November, 1994. There is no reason to reverse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eshammal reported in (2006) 5 SCC 545 case. The ratio / tests laid down by the Supreme Court finds place in paragraphs No.21 to 24 of the said judgment and the same reads as under:- The phrase substantial question of law , as occurring in the amended Section 100 of the CPC is not defined in the Code. The word substantial, as qualifying question of law , means of having substance, essential, real, of sound worth, important or considerable. It is to be understood as something in contradistinction with technical, of no substance or consequence, or academic merely. However, it is clear that the legislature has chosen not to qualify the scope of substantial question of law by suffixing the words of general importance as has been done in many other provisions such as Section 109 of the Code or Article 133(1)(a) of the Constitution. The substantial question of law on which a second appeal shall be heard need not necessarily be a substantial question of law of general importance. In Guran Ditta v. T. Ram Ditta (AIR 1928 PC 172) , the phrase 'substantial question of law' as it was employed in the last clause of the then existing Section 100 CPC (since omitted by the Amendm ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
