IN THE HIGH COURT or KARNATAKA, BANGALQZREVV
DATED THIS THE 16'!" DAY OF IJECEMBEE, 2()09 -
PRESENT
THE HONBLE3 MR. JUSTICEIK.I%§Ev'EAi'\IJU1\i.)§T_IViVVV:"EV
AND
THE HON'BLE MR. JUSTICE Am$'xr1ND JKIMARV M'
I.T.A NC5';»1.5;Z[_2009~..
BETWEEN .'
1. The Commissionef' .
C.R.BuiIdi.ng, ' "
Queens Road-,_Ba;nga'IO.§<:
2. The Ineofneli'-{'é;'2; O-f'fie'e'r.V__ V
ward~ E
C:."R.Bu:1cV1:ng.i"§V ' _ _
Qi1ee--11s 'Bar1Vgai--0I'e;
(By Sri.1\/I _"V7._._4SE.'Vs}V1v"a-._<: }'1*V.'-'.11-a..,:' .]
Sl;1fi.J.:'§lA_ve:€a'1:1:tie1f
A 1"-.'1atgNO.v.7;'«.Ede11Aulac.
V V' Indi1*.anafgar,,.-Bangalore.
'A . " ' ' = Sri:A--; Shankar, Adv.
Bi11n'a1i'nanéga}a.
Respondent:
_ Sri.K.P.Kumar, Sr. Counsel for M/s King &
“Partriége for R331)
{V
Appellants:
This Appeal is filed Under Section 260A of lnoorne
Tax Act, 1961 praying to allow the appeal and set aside
the order passed by the ITAT Bangalore –i_f1′–V_f’E«Ti-3.’
No.”/99/BNG/2006, dated 29m08m2008 confi1*rn’..___the4e~.
orders of the Appellate Commissioner and <;:onfi,rn'1'*-tl1e"'F V' '
order passed by the income tax officer,–W'ard'–».l3.(l).Vl"
Bangalore.
This appeal coming on for
MANJUNATH J, delivered the -foyllowlingi A
Heard the learneldltioytiinsel parties. This
appeal is by the legality and
Correctness of the Commissioner of Income
Tax (Appeals)whliehl*has:l:been Confirmed by the Income
.._ATaxv..«.§App*ellate.l “*T.ri_b_1i11a1, Bangalore Bench in ETA
Al’?ENQL79V9/Vl3k1H{3,%7’2.Q06 dated 29~8«~2008.
‘appeal was admitted to consider the
‘.Vfpollo\viri;1gl§s1ilbstantial question of law:
W,
of assessment was made in the name of the Assessee
treating the same as unexplained cash deposits. T
4. As a protective measure ..”protect.iVe__u
assessment was also simultaneously;_-ma}de=.in.the”name;A
of those persons in whose the-fiilied depojsitsyywere
standing. Efforts were also m_a_d”e,:by. _the..reve_nuef? to find
out the fictitious persori=s:illwhic1″i{,’t1it’i’njaltely did not yield
any result.
by the order of
assessment « appeal before the
Comrnissioner.Inco’rne’¥.taX {Appeals} contending that
the atflQ;f;1’nt’-.fQundlVinmthe FDs with the Karnataka Bank
lllwere. the assessee and that he had not
inves.ted_.the’4i’same in the name of the fictitious persons.
.u”‘4″-..hThereforethe requested the first Appellate Authority to
a._lrey’erlse the finding of the Assessing Officer. The
Q;
Commissioner of income-tax (Appeals) considering the
entire case pleaded by the Assessee granted relief tdthe
assessee holding that the said amounts
deposited actually by the assessee
fictitious persons. The revenue
order of Cl’l'{Appeals) prefei’1’e_d art.Vhappealiybefore
Income Tax Appellate Tribunal;”Bangalore: came
to be dismissed. Agg1=i_.eve’d”._by_’« the present
appeal is filed bysthe revcnhliie. V =
taken up for hearing by this
Court on *’oc”g-Valsions. the then Bench had
noticeidl that basedv__o_n.the protective assessments made
revenue is ‘s_a’id_ to have recovered the amount of tax
from”vout’olf~:tli1e proceeds available in Karnataka Bank
‘,which ..vva.s invested in the names of fictitious persons.
A .,:l?jlLhel”Court also entertained a doubt whether really the
{V in
‘-J
7. We have heard Mr.Seshacha1a, learned counsel
for the revenue. Mr.Shankar learned counsel apgaearirig
for the assessee and Mr.K.P.Kumar, learned
Counsei representing the Reserve Bank 0f_’I.ndi’a;fv» d
8. At the out set. Mr.K.P.Ii{un}ar(learned
Counsel appearing for that
Bank will not have details ash-‘sta{1ught»eAfor b’y”‘this§ Court.
According to him whate’vVe_r” has been
Credited to thC..E1’C’COL1H”t;2′ of :ieVe_n,ge.7′”f’herefo1″e. there
is no rlecessityv fer’-th’e_Cojtirt; to hear the Reserve Bank of
India as it”‘i.sttneiVt’h_ea1′.a’ xiecessary nor a proper party to
_.v..’adju.»d:tcate the in controversy. Mr. Shankar
1eaVrn.ed-.V_e0uns’e1_ for the assessee submits that in the
this Court in ITRC No.64 and
19-6-2008 a eo–ordinate Bench had held
A ft}1AAatd “the assessment cannot be made in the name of the
:4
assessee in respect of the Fixed Deposits which were in
the name of fictitious persons as the protect.i_ve_
assessment orders have been passed in th’e7 *
depositors and tax liability has been »repcoverheddfrjorrrythe’V, if
bank directly. Therefore, he the
there are no merits in the appefipandvh appeal”v_:re’qu’ires to
be dismissed. *
9. Mr. Seshachal.3,,_ l«ear-hed.coun_se1 for the revenue
fairly cor1cedes__ that_….p.ur.sua11pt “x”toV’5IVth”e protective
assessm_en–.t’ ordeif’su’1n;ide””-in the name of the deposit
holders, th’e__’reverit_:e’has:’_’§::oilect.ed entire proceeds of the
.-v..’_dep_os.itv_f1’om th’e.Vi_{_s1f.inataka Bank. To evidence the
seirneVhe__has_ibr,ought few fiies for perusal of the Court.
Of: .p’e’rusal”iioff’tvhe records produced before us it is clear
fthe 2iri<.id11_nt is remitted by the Karnataka Bank in the
" /fna_m"e~ of the revenue.
6*
10. In View of the records produced before us we
are satisfied that the revenue has collected the
of the Fixed Deposit from the Karnataka
were standing in the name of fictitioiis ;f;ers,o’r1s4w1uc,hi’i..
amounts become due to the reyenz=;e based’~.von”
protective assessment orders.i,:”‘~..y> If the ‘ref\§en:;je”‘ has
Collected the taxes from,_fictitiousilpersons the question
of passing an order of assess’vr1ient_…ir1fj;h’e_’_.name of the
assessee in resvper:iIyj’of the §sa;r11e.a1n_’ounts again will not
arise at if iltyvill. Therefore, we do not see
any merit in the.a§p_ea–£._A_lAand accordingly following the
order _-in 1rtzc iNoT;-64′,/199999 dated 19wsw2o0s between
ltlthey sa{i”ne’i’Apa1tties formthe assessment. year 199091, We
Eh-aye; appeal. Accordingly, this appeal is
” disrn’i.ss6.Cl .’ -.
<27/2.
11. In order to ensure that there shall note-‘jbe:’f’a.ti3?A4
loss of revenue if any FD proceeds is not V’
the revenue from the Karnataka £3-;a’r1k–,. Alibhertv
to the revenue to recover the frofn.e.the«.
from out of the proceeds Deposits.
in the name of fictivtioys With”‘the above
observations. the appea} is t:1iSj1n’i:a§se<j_:§"
sbb/¥A VA