Commissioner Of Income Tax-I, Ludhiana v. Sh. Hakam Singh

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.A No. 400 of 2008 Date of decision : September 23, 2008 Commissioner of Income Tax-I, Ludhiana ...... Appellant through Mr.Rajesh Sethi, Advocate v. Sh. Hakam Singh ...... Respondent CORAM : HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY TEWARI *** 1. Whether Reporters of Local Newspapers may be allowed to see the judgment ? judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest ?****** AJAY TEWARI, J The appeal proposes the following substantial questions oflaw :- “ i)Whether, on facts, as well as in law, the learnedIncome Tax Appellate Tribunal was right in holding thatthe proceedings u/s 158 BD were invalid, ignoring thefact that the statement of Shri Bikar Singh, seller of theland, recorded on 28.8.1998, was the basis of satisfactionof the A.O ? ii)Whether the learned Income Tax AppellateTribunal was right in law in ignoring the fact that theundisclosed income was proposed to be worked out on the basis of agreement found during search in the case ofM/S S.S Property Dealers ?” The revenue has filed the present appeal under Section 260A ofthe Income Tax Act, 1961 (for short “the Act”) against the order dated10.8.2007 passed by the Income Tax Appellate Tribunal, Chandigarh for theblock period 1.4.1988 to 15.7.1998. On a search operation conducted in the business premises ofone M/S S.S.Property Dealer on 15.7.1988, an original agreement dated5.12.1996 was seized from the proprietor which disclosed that the owners ofthe land Bikar Singh and others sold half of 8 acres of land to SukhjinderSingh and Jarnail Singh. The statement of Bikar Singh dated 28.8.1998revealed that half of the said land was sold to the respondent in benaminames of Sukhjinder Singh and Jarnail Singh for a consideration ofRs.72,82,500/-. On the basis thereof, the Assessing Officer served a noticeunder Section 158BD of the Act to the respondent and proceeded to framethe assessment by order dated 27.1.2004. The appeal preferred by theassessee was dismissed by the Commissioner of Income Tax(A) by orderdated 12.3.2004. In second appeal, the Tribunal held that the solitary statementof Bikar Singh remained uncorroborated and unsubstantiated. It furtherheld that the satisfaction recorded under Section 158BD of the Act can bearrived at on the basis of positive material. In Amity Hotels Pvt Ltdv. Commissioner of Income Tax andothers, 272 ITR 75, the Delhi High Court held as follows :- “The satisfaction is required to be preceded by theinvestigation and not that the investigation is required to be preceded by the satisfaction......” We find no infirmity in the reasoning of the Tribunal and, beingin respectful agreement with the above mentioned judgment of the DelhiHigh Court, we hold that the questions proposed cannot be held to besubstantial questions of law. The appeal is dismissed. ( AJAY TEWARI ) JUDGE September 23, 2008'kk' ( ADARSH KUMAR GOEL ) JUDGE