Cit, Jaipur v. Shri Ram Kumar Dhanuka

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR. D.B. Income Tax Appeal No.68/2000 CIT, Jaipur vs. Shri Ram Kumar Dhanuka DATE OF ORDER ::: 19.10.2016 HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE MAHENDRA MAHESHWARI Mr. R.B. Mathur withMr. K.D. Mathur for the appellant.Mr. A. Kasliwal for the respondent. ***** BY THE COURT(Per Hon'ble Jhaveri J.) 1.By way of this appeal, the appellant hasassailed the judgment & order of the Tribunalwhereby the Tribunal has partly allowed the appealpreferred by the assessee and dismissed the appealof the revenue. 2.While admitting the matter, this court hasadmitted the matter but substantial questions oflaw was not framed, therefore, we frame thefollowing substantial question of law as under:- “Whetherinthefactsandcircumstances of the case, the ITATwas justified in deleting theadditions of Rs. 2.55 crores when thesaid amount pertain to unaccountedtradingactivityandwithoutappreciating the fact that theassessment was made under sec. 158BCread with Sec. 144 of the Act and theadditions were on the basis ofincriminating documents found duringsearch?” 3.The brief facts are that the matter involvedin the case pertains to the assessment year i.e.block period 1987-88 to 1996-97 & ¼/86 to 16/1/97by the ITAT dated 28/6/2000 was received in theoffice of the appellant on 26/7/2000 as such theappeal filed is within limitation. The search and seizure operations were carried out on 16/1/97 atthe business premises and the residence of theassessee respondent and several incriminatingdocuments and valuables in the form of cash,foreign exchange, jewelry, etc. were found andseized. During the course of search operation, theassessee was confronted with regard to the assetsfound and seized and various investments found inimmovable assets and incriminating entry in theseized books. While narrating the nature of hisworking style, business activity, varioustransactions were found noted in the seized papersand movable and immovable assets, the assesseesought to surrender rupees 35 lacs under differentheads. A notice was issued under sec. 158BC forthe block period on 27/6/97 requiring the assesseeto file his return for the block period within theprescribed time of 45 days in prescribed form No.2B. The assessee did not file return for the blockperiod instead he kept on seeking adjournment onone or another plea. Due to non-cooperativeattitudeoftheassessee,showcausenotices/letters were further issued on 10/10/97,11/8/98, 2/9/98 & 8/10/98 narrating the brieffacts of the case and assessee was called upon tofile the return along with explanation, if any,with regard to various entries which were found inthe incriminating documents lying seized with thedepartment and of which copies were supplied tothe assessee. 4.Mr. R.B. Mathur argued only question No.5 andcontended that the Assessing Officer while assessing the income has gone into detailregarding the documents and the statementrecorded, the supporting documents which have beenfound during the search from the custody of theassessee, and has come to the conclusion that theincome was not unaccounted income but was anactual income and he has estimated income to theextent of Rs. 2.55 crores. 5.The appeal of the assessee was partly allowedand the Tribunal while accepting the appeal inpara 46 observed as under:- 4.Mr. R.B. Mathur argued only question No.5 andcontended that the Assessing Officer while assessing the income has gone into detailregarding the documents and the statementrecorded, the supporting documents which have beenfound during the search from the custody of theassessee, and has come to the conclusion that theincome was not unaccounted income but was anactual income and he has estimated income to theextent of Rs. 2.55 crores. 5.The appeal of the assessee was partly allowedand the Tribunal while accepting the appeal inpara 46 observed as under:- 46.“The CIT(A) has discussed thisissue at page 12 of his order andreferred the first statement recordedu/s 132(4) Question No. 20 Where theassessee has admitted receipt andpayment of money to various parties.The CIT(A) accepted that certaintraders from India selling goods inNepal appointed the appellant as theircollection agent. The assessee alsoadmitted that he was acting as aFinance Broker. It was also claimed bythe assessee that all the parties wordoutside India and were not taxable inIndia. The CIT(A) rightly concludedthat in the absence of any regularoffice and also no evidence of tradingactivity by the assessee, he acceptedthe contentions of the assessee. As amatter of fact, the CIT(A) wasconvinced that the trading activityinvolving the turnover of Rs. 5 croresduring the brief period of 4-5 monthswould definitely result in some stock-in-trade, purchase vouchers, packingmaterial, transportation receipts,etc. but none of such documents foundat the time of search. He, therefore,held that assessee has not carried outany business activities and theentries in the diary relates to Hawalaonly. His views were strengthened bythe fact that Annexure- A-2 mentionedlarge number of currency notes, whichis clearly indicative of the fact thatthe assessee was not carrying on anytrading business but only transfer ofmoney. supported the order of the Tribunal and contendedthat except the statement which was recorded tothe extent of 5% by the CIT, the view taken by theTribunal is just and proper. 7.We have heard Mr. R.B. Mathur counsel for theappellant & Mr. A. Kasliwal counsel for therespondent. 8.Mr. Kasliwal contended that taking intoaccount the case of the search, the department hasto come with documentary proof as well as thematerial namely cash, foreign exchange, gold andsilver jewellery and documents which have beenproduced by the assessee for undisclosed incomeduring the search, no other document is found. 9.In that view of the matter, in our opinion,if there are two materials on record then it hasto be accepted as a whole if it is the statementof commission of 2%. The AO has seriouslycommitted an error in giving finding beyond theincome of Rs. 2.55 crores. We see no infirmity inthe order of Tribunal. The view taken by Tribunalis required to be affirmed. 10.Therefore, we answer the issue raised in thepresent appeal in favour of the Assessee andagainst the Department.11.The appeal stands dismissed. (Mahendra Maheshwari), J. (K.S. Jhaveri), J.