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TAXAP/495/2010 4/ 4 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 495 of
2010
=========================================================
COMMISSIONER
OF INCOME TAX - Appellant(s)
Versus
SULEMAN
M MISTRY - Opponent(s)
=========================================================
Appearance
:
MR
MANISH BHATT for
Appellant(s) : 1,
None for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI
Date
: 22/06/2011
ORAL
ORDER
(Per
: HONOURABLE MS JUSTICE SONIA GOKANI)
Aggrieved
by order of ITAT dated 9.10.2009, present appeal is preferred by the
Revenue raising following questions of law for our determination :
“(A) Whether
the Appellate Tribunal is right in law and facts in confirming the
order passed by CIT(A) in deleting the addition made on account of
unexplained cash of Rs.1,00,000/-?
(B) Whether
the Appellate Tribunal is right in law and on facts in confirming
the order passed by CIT(A) in deleting the addition made on account
of unexplained receipts in the construction account of
Rs.5,62,000/-?
(C) Whether
the Appellate Tribunal is right in law and on facts in confirming
the order passed by CIT(A) in deleting the addition made on account
of unexplained expenditure u/s.69C of the Act of Rs.15,13,538/-?”
Assessee
is the Director of M/s. Ronak Ceramic Industries Ltd. Total
undisclosed income was determined for the assessment year (period
ending on 9.1.2001) at Rs.28,60,538/- as against Rs. Nil shown by
the assessee for the block return. Certain additions were made by
the Assessing Officer and therefore, assessee challenged the same
before CIT(Appeals) which partly allowed the appeal by deleting
certain additions. Revenue preferred appeal before the tribunal
challenging the same. Order of tribunal is in challenge before this
Court.
Heard
learned counsel Shri Manish Bhatt who has taken us through orders
of adjudicating authorities. For reasons to be recorded
here-in-after, issues essentially being factual in nature, appeal
deserves to be dismissed.
Question(A)
relates to addition made by the Assessing Officer on account of
unexplained cash of Rs.1,00,000/-. CIT(Appeals) in its elaborate
discussions on the source of cash was convinced that said amount
was belonging to son of assessee which he had received against sale
of house. In support of the same, agreement for sale was furnished
to the Assessing Officer and thus addition to the extent made by the
Assessing Officer was not found justifiable. On this issue, tribunal
concurred with the findings of CIT(Appeals) by stating that as
rightly pointed out by the assessee respondent, statement was given
on the date of search and therefore, source which had been specified
by the assessee could not have been considered as an afterthought.
On the basis that written agreement for sale of the property
situated at Noorani Park Society was produced before the Assessing
Officer, same was found to be substantial material for deletion of
addition of Rs. 1,00,000/-. It emerges from the discussion of both
CIT(Appeals) and that of the tribunal that material placed before it
is duly considered and on the basis of same, they have arrived at
the conclusion which does not call for interference.
With
respect to question no.(B), which pertains to unexplained receipts
in the construction account of Rs.5,62,000/-, CIT(Appeals) was of
the opinion that assessee respondent is one of the promoter/director
in Ronak Ceramic Industries Ltd. and therefore, some of the receipts
found were not pertaining to the assessee respondent and therefore,
additions made in hands of assessee which were receipts of such
amount, were not required to be considered. There was a further
direction to the Assessing Officer to verify whether impugned
receipts and payments were included in the amount considered by him
in the block assessment in case of Ronak Ceramic Industries Ltd. and
on such discussion, CIT(Appeals) had deleted said amount of
Rs.5,62,000/- which had been confirmed by the tribunal. Tribunal
held that one of the payments has been found by CIT(Appeals) to be
for raw material used in ceramic industry and in absence of any
material to hold that assessee was carrying on his own ceramic
manufacturing business and also when he was found to have been
carrying on his own construction business, it is not found plausible
to relate the said amount as his income and by detailed reasonings,
tribunal concurred with the findings of the CIT(Appeals). There is
no flaw in the reasonings given by the tribunal and conclusion
drawn is essentially on the basis of substantial material made
available to both the authorities, which in our opinion requires no
interference.
Question
(C) is with regard to unexplained expenditure under Section 69C to
the tune of Rs.15,13,538/-. There were certain notings made in the
notebook found and seized which were considered as unexplained
expenditure incurred on construction. Resultantly, the Assessing
Officer had added the same under Section 69C. CIT(Appeals) on
careful examination concluded that there was no noting showing
expenditure incurred and entire notings were pertaining to
measurement and application of rate on such measurement.
CIT(Appeals) also upheld the say of the assessee respondent that
same pertained to tender. By detailed discussion of loose papers
found, CIT(Appeals) held that Assessing Officer was not justified in
considering the said amount as an addition under Section 69C.
Tribunal concurred with the findings given by CIT(Appeals) and
concluded that addition was made on flimsy ground by the Assessing
Officer, as there was no material worth the name which could have
been taken into account for adding such amount. Moreover, before the
tribunal also none of these findings were controverted by the
Revenue.
On
careful examination, this Court also is of the opinion that in
absence of any proof of actual expenditure, application of Section
69C for addition of sum of Rs.15,13,538/- was not justified and both
CIT(Appeals) and tribunal were right in deleting the said amount.
Resultantly,
no question of law much-less substantial question of law arises
before this Court to be decided. Tax appeal is therefore,
dismissed.
(Akil
Kureshi,J.)
(Ms.
Sonia Gokani,J.)
(raghu)
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