Commissioner Of Income Tax, Chennai v. M/S.a.k.daga & Sons

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 05.06.2007 Coram : THE HONOURABLE MR.JUSTICE P.D.DINAKARAN AND THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Tax Case (Appeal) No.417 of 2007 Commissioner of Income Tax,Chennai. ..Appellant VsM/s.A.K.Daga & Sons,122, Broadway,Chennai-108. ..Respondent Appeal under Section 260A of the Income-tax Act, 1961 againstthe order of the Income Tax Appellate Tribunal, Chennai 'A' Bench,Chennai in I.T.A. No.1441/Mds/2004 dated 14.07.2006 for theassessment year 1998-99 against the order of the Commissioner ofIncome Tax, Chennai-34 dated 24.3.2004 and made ITA No.19/2001-2002GI No./P.A.No.12203.D Assessment Year 1998-99. For Appellant :Mr.J.Naresh Kumar,Standing Counsel forIncome-tax DepartmentJUDGMENT (Judgment of the Court was delivered byP.P.S.Janarthana Raja, J.) This appeal is filed under Section 260A of the Income Tax Act,1961 by the Revenue, against the order of the Income Tax AppellateTribunal, Chennai 'A' Bench, Chennai in I.T.A. No.1441/Mds/2004 dated14.07.2006 raising the following substantial questions of law:- 1. Whether under the facts and circumstances ofthe case the Tribunal was right in holding thatthe amount claimed by the assessee as received onaccount of sale of jewellery cannot be brought totax u/s 68 when the assessee had not adduced anyevidence of the sale? https://hcservices.ecourts.gov.in/hcservices/ 2. Whether the Tribunal was right in holding thatthe sale was not disputed by the assessingofficer, when it is clear from the assessmentorder that it was not accepted by the assessingofficer and treated as a sham transaction by him? 2.The facts leading to the above substantial questions of laware as under: The assessee is a H.U.F. The nature of the business of theassessee is money lending. The relevant assessment year is 1998-99and the corresponding accounting year ended on 31.03.1998. Theassessee had returned income from money lending. The total income ofRs.1,36,180/- has been disclosed in the Return. The assessment wascompleted under Section 143(3) of the Income-tax Act ("Act" in short)determining a total income at Rs.8,37,967/-. While completing theassessment, the Assessing Officer treated the amount of Rs.7,01,787/-as unexplained cash credit under Section 68 of the Act. Aggrieved bythe order, the assessee filed an appeal to the Commissioner ofIncome-tax (Appeals). The C.I.T.(A) allowed the appeal. Aggrieved,the Revenue filed an appeal to the Income-tax Appellate Tribunal("Tribunal" in short). The Tribunal dismissed the Revenue's appealand confirmed the order of C.I.T.(A). Hence the present tax case isfiled by the Revenue. 3.Learned Standing Counsel appearing for the Revenuesubmitted that the assessee has not proved the sale of jewellery toits family members and hence the funds introduced is without properexplanation and hence the addition made by the Assessing Officer isjustified. 3.Learned Standing Counsel appearing for the Revenuesubmitted that the assessee has not proved the sale of jewellery toits family members and hence the funds introduced is without properexplanation and hence the addition made by the Assessing Officer isjustified. 4.Heard the counsel. During the year under consideration,the assessee has introduced funds into accounts for sale of gold(Rs.3,66,800/-) and silver (Rs.3,34,987/-). The above items weredisclosed under VDIS Scheme. The C.I.T. issued a Certificate thatthe assessee has paid tax under VDIS Scheme. Subsequently, thejewellery declared under VDIS Scheme was sold to family members whichresulted in capital loss of Rs.54,307/-. The amount of Rs.7,01,787/-was shown as receipt from family members on account of sale of goldand silver jewellery. It is seen from the records that the assesseehad filed affidavits from the buyers and also the detaileddescription of purchases and its valuation at the time of VDISScheme. The declaration of the articles under VDIS Scheme was notdisputed by the Revenue. Further it is seen from the records thatthe sale consideration was not disputed by the Assessing Officer.The Assessing Officer cannot ignore the transactions and theresultant gain or loss out of it. In this case there is a loss. Theassessee had already explained the nature and source of credits withsupporting evidences. The authorities below have given a findingthat the Assessing Officer, except describing it as a shamtransaction, had not brought any additional evidence to support hiscontention. The addition made under Section 68 of the Act as https://hcservices.ecourts.gov.in/hcservices/ unexplained cash credit is not based on any material or evidence.Both the first appellate authority as well as the Tribunal have givena finding that there is no material brought on record to suggest thatthe transaction was sham and hence it was held that the sum receivedon account of sale of jewellery could not be brought to tax underSection 68 of the Act. The concurrent findings given by both theauthorities below are based on valid materials and evidence.Recently, the Supreme Court in the case of Commissioner of Income-taxVs. P.Mohanakala (291 ITR 278), held that whenever there is aconcurrent factual finding by the authorities below, the same shouldbe accepted and no interference should be called for by the HighCourt. Under these circumstances, we do not find any error or legalinfirmity in the order of the Tribunal so as to warrant interference. 5.In view of the foregoing reasons, no substantial questionsof law arise for consideration of this Court and accordingly, the taxcase is dismissed. No costs. Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.kmTo1. The Assistant Registrar, Income-tax Appellate Tribunal, Chennai "A" Bench, Chennai.2. The Assistant Registrat Income Tax Appellate TribunalIII rd Floor, Rajaji Bhavan, Besant Nagar, Madras-90. (5 copies)3. The Secretary, Central Board of Direct Taxes, New Delhi.4. The Commissioner of Income-tax (Appeals) IX, Chennai-34.5. The Deputy Commissioner of Income-tax, City Circle IV(Inv), Chennai-34. 1 cc to Mr. Pushya Sitaraman, SVSC, Sr. No.31670 T.C.(A) No.417 of 2007 AKR (CO)kk 18/6 https://hcservices.ecourts.gov.in/hcservices/