Commissioner Of Income Tax - Applicant(S v. Joitaram K Patel - Respondent(S

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 83 of 1995 For Approval and Signature: HONOURABLE MR.JUSTICE R.S.GARG HONOURABLE MR.JUSTICE M.R. SHAH =========================================================1[Whether Reporters of Local Papers may be allowed ]to see the judgment ?1[Whether Reporters of Local Papers may be allowed ]to see the judgment ? 2To be referred to the Reporter or not ? 3[Whether their Lordships wish to see the fair copy ]of the judgment ?of the judgment ? Whether this case involves a substantial question of law as to the interpretation of the of law as to the interpretation of the 4constitution of India, 1950 or any order made thereunder ?constitution of India, 1950 or any order made thereunder ? 5[Whether it is to be circulated to the civil judge ]?? =========================================================COMMISSIONER OF INCOME TAX - Applicant(s)Versus JOITARAM K PATEL - Respondent(s) ========================================================= Appearance : MR BB NAIKfor Applicant(s) : 1,NOTICE SERVED for Respondent(s) : 1, ========================================================= CORAM :HONOURABLE MR.JUSTICE R.S.GARG and HONOURABLE MR.JUSTICE M.R. SHAH Date : 22/08/2006 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE R.S.GARG) 1. Heard Mr. B.B.Naik, learned counsel, for the Revenue. None for the respondent, though served.Revenue. None for the respondent, though served. 2. At the instance of the Revenue, the Income Tax Appellate Tribunal, Ahmedabad, Bench-'A', has made this reference on the following questions under Section 256(1) of the Income Tax Act to this Court for its opinion.under Section 256(1) of the Income Tax Act to this Court for its opinion. “Whether the Appellate Tribunal is right in law and on facts in confirming the order made the commissioner of income-tax (Appeals) whereby he had directed that the addition for investment in house property at village Sankari should be considered in the hands of the HUF and not in the hands of the assessee individual.”in law and on facts in confirming the order made the commissioner of income-tax (Appeals) whereby he had directed that the addition for investment in house property at village Sankari should be considered in the hands of the HUF and not in the hands of the assessee individual.” 3. The short facts leading to the reference are that the assessee is an individual. During the course of asessment proceedings, it was found that search and seizure operations under Section course of asessment proceedings, it was found that search and seizure operations under Section ITR/83/1995 132 of the Act were carried out on or about 5.7.1985 and it was found that a house situating in village : Sankari appeared to have been substantially renovated/constructed in recent past. Some file marked as annexure-A was also traced, which contained papers relating to the expenditure incurred for renovation of the house. The file indicated payment of Rs.60,283/- to one Mr. M.K.Patel. The Assessing Officer after going through the returned income expenditure in form of the payment and other circumstances observed that at least a sum of Rs.2.1 lacs was incurred on the cost of material, etc. He added a sum of Rs.2,60,283/- to the returned income on the ground that the money was spent by the assessee. The assessee all through had been contending that the house belonged to the HUF, which in its turn was an income tax assessee and the amount spent was belonging to the HUF. The Commissioner, Income Tax (Appeals), accepted the explanation offerred by the assessee and held that the HUF was assessed on the total income of Rs.3,95,970/- in ITR/83/1995 ITR/83/1995 the assessment year 1982-83 and had disclosed movable wealth including deposits to the tune of Rs.5,32,803/-. The Commissioner accordingly deleted the addition. 4. The Revenue being dissatisfied by the order passed by the Commissioner, Income Tax (Appeals) passed by the Commissioner, Income Tax (Appeals) took up the matter in appeal to writ Tribunal. The Tribunal confirmed the order passed by the CIT (Appeals). 5. Mr. Naik learned counsel for the Revenue submits that before Commissioner, Income Tax (Appeals), certain new facts were brought on record who that before Commissioner, Income Tax (Appeals), certain new facts were brought on record who without observing the provisions contained in Rule 46-A of the Rules relied upon the said evidence. He submits that the evidence could not Rule 46-A of the Rules relied upon the said evidence. He submits that the evidence could not be admitted just for sake of asking and as the wrong procedure has vitiated the final order, the order deserves to be quashed.wrong procedure has vitiated the final order, the order deserves to be quashed. 6. From the order passed by the CIT (Appeals), it does not appear that the question of does not appear that the question of ITR/83/1995 admissibility of the additional evidence was challenged before it. It also does not apear from the said order that the Revenue ever submitted that it be given some opportunity to controvert the additional evidence or the matter be remitted to the Assessing Officer for redetermination. The question relating to admissibility was raised before the Tribunal but from the order passed by the Tribunal it does not appear that any evidence which could controvert the additional evidence was brought on the records before the Tribunal. If that be so, at this stage, it cannot be submitted that the evidence was wrongly admitted. 7. Even otherwise, the question referred to us does not relate to Rule 46-A or admissibility of the additional evidence. The question referred to us additional evidence. The question referred to us simply says whether the CIT (Appeals) and the Tribunal were justified in deciding a fact against the interest of the Revenue. On the facts, we are unable to hold that the Tribunal was unjustified in confirming the order passed Tribunal were justified in deciding a fact against the interest of the Revenue. On the facts, we are unable to hold that the Tribunal was unjustified in confirming the order passed by the CIT (Appeals). 8. For the reasons aforesaid, we are unable to decide the question in favour of the Revenue. The question is answered against the interest of the Revenue. The Reference stands disposed of accordingly. No costs.decide the question in favour of the Revenue. The question is answered against the interest of the Revenue. The Reference stands disposed of accordingly. No costs. (R.S.GARG, J.) kdc (M.R.SHAH, J.)