D.b. Income Tax Appeal v. Murari Lal Gupta

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 138 / 2011 Commissioner Of Income Tax Alwar ----Appellant Versus Murari Lal Gupta ----Respondent D.B. Income Tax Appeal No. 466 / 2011 Commissioner Of Income Tax Alwar ----Appellant Versus Murari Lal Gupta & Ors ----Respondent _____________________________________________________ For Appellant(s) : Mrs. Parinitoo Jain For Respondent(s) : Mr. P.K. Kasliwal _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE DR. JUSTICE VIRENDRA KUMAR MATHURJudgment 30/05/2017 1. By way of these appeals, the appellants have assailed thejudgment and order of the Tribunal whereby Tribunal has partlyallowed the appeal of the assessee and dismissed the appeal ofthe department and modified the order of CIT(A). 2.This Court while admitting the appeals framed followingsubstantial question of law:- 2.1Appeal No.138/2011 admitted on 18.10.2016 “1. Whether tribunal was legally justified in deletingvarious additions and making estimation overestimation specifically when the assessee neithermaintained any regular books of accounts norfollowed any accounting system consistently andfurther the assessee never filed any return of incomeexcept the one filed u/s.158 BC/BD after the searchand seizure u/s.132? 2. Whether in the facts and circumstances of thecase in law the Tribunal was justified in holding onone hand that the assessee had given advanceswhich were not declared by the assessee and on theother hand addition of Rs.3 lacs only was estimatedagainst Rs.40 lacs which was made on account ofoutstanding advances on the basis of seizeddocuments and addition of Rs.20 lacs was sustainedby the CIT(A)? 3. Whether in the facts and circumstances of thecase in law the Tribunal was justified in allowing thecredit of opening balance of capital assets forRs.17,71,415/- against Rs.2,50,000/- allowed by theCIT(A) on the basis of claim made by the assessee inthe return of income, specifically when the balanceincreased amount was neither claimed in the returnof income nor substantiated with any documentaryevidence or revised return? ” 2.2Appeal No.466/2011 admitted on 18.10.2016 “ 1. Whether Tribunal was legally justified indeleting various additions and making estimationover estimation specifically when the assesseeneither maintained any regular books of accountsnor followed any accounting system consistentlyand further the assessee never filed any return ofincome except the one filed u/s.158 BC/BD after thesearch and seizure u/s.132? 2. Whether in the facts and circumstances of thecase in law the Tribunal was justified in allowing thecredit of opening balance of capital assets forRs.17,71,415/- against Rs.2,50,000/- allowed bythe CIT(A) on the basis of claim made by theassessee in the return of income, specifically whenthe balance increased amount was neither claimedin the return of income nor substantiated with anydocumentary evidence or revised return? 3. Whether in the facts and circumstances of the case in law the Tribunal was justified in deleting theaddition of Rs. 3,52,650/- made on account ofadvances realized specifically when the assesseemade a submission only and failed to establish byway of any documentary evidence that the amountwas included in the amount realized after the deathof the assessee?” 3.Counsel for the appellant has taken us to the observationsmade by the AO, CIT (A) and the Tribunal regarding Agriculturalland, House Hold expenses, Outstanding interest on pawnedjewellery, land purchased, undisclosed investment and advances,outstanding advances and opening capital which if taken in tabularform reads as under: Appeal No. 138/2011: 3. Whether in the facts and circumstances of the case in law the Tribunal was justified in deleting theaddition of Rs. 3,52,650/- made on account ofadvances realized specifically when the assesseemade a submission only and failed to establish byway of any documentary evidence that the amountwas included in the amount realized after the deathof the assessee?” 3.Counsel for the appellant has taken us to the observationsmade by the AO, CIT (A) and the Tribunal regarding Agriculturalland, House Hold expenses, Outstanding interest on pawnedjewellery, land purchased, undisclosed investment and advances,outstanding advances and opening capital which if taken in tabularform reads as under: Appeal No. 138/2011: IssueAssessment Order CIT(A) Order (Anx.-3)ITAT Order (Anx.-5)(Anx.-1)Q. NO. 1 Estimation:Allowed Rs.7,62,575/- Estimated Estimated Rs.12 lacs agaist Rs.15,15,320/- Rs.9,50,000/- Page-18, Page-8, Para-8A. Agriculture Incomeclaimed by assessee Para-7Page-7, BottomB. House Hold Rs.9,71,800/- Para-7, Rs.5,50,000/- Para-10, Rs.3,50,000/- Para-16, ExpensesPage-8Page26Page-12C. Outstanding InterestRs.10,91,435/-, Page-4Interest Deleted, Para-Interest Deleted, Para-on Pawned Jewellery5, Page-74, Page-4D. Land PurchasedRs.3,67,440/-, Page-5, Rs.3,34,440/-, Page-23 Deleted Addition, Para-6para-9Page-10, Para-14E. Undisclosed Rs.15,00,000/-, Page-Confirmed Deleted Addition, Para-investment & advances15Rs.15,00,000/- Para-23, Page-1413.3, Page-36Q. No. 2 Outstanding Estimated for Rs.40 Deleted addition of Reduced the addition Advanceslacs Page 11, 12Rs.20 lacs and to Rs.3 lacs Page-6, confirmed Rs.20 lacs. Para-7Page-12, Para-6Q. No.3 Opening NilAllowed Rs.2.50 lacs Allowed Rs.17,71,415/-CapitalPage-40, Para-15Page-15, Para-26 Appeal No. 466/2011: IssuesAssessment Order CIT(A) Order (Anx.-3)ITAT Order (Anx.-5)(Anx.-1)Q.No.2 Opening NilAllowed Rs.2.50 lacs Allowed Rs.17,71,415/-CapitalPage-40, Para-15Page-15, Para-26Q. No.3 Interest on Rs.3,52,650/- Page-15, Confirmed Addition deleted Page-advancesPara-(iv)Rs.2,40,000/- Page-34, 13, Para-18Para-13.2 4.Counsel for the respondent has contended that in view of the above, it is all of pure estimation and appreciation of facts and nointerference is required to be made in the order of the Tribunal. 5.We have heard Mrs. Jain and Mr Kasliwal. 5.1For the benefit of the parties, we reproduce the provisions of Section 158BC & 158BD which reads as under- “Procedure for block assessment. 158BC. Where any search has been conductedunder section 132or books of account, otherdocuments or assets are requisitioned under section132A, in the case of any person, then,— [(a) the Assessing Officer shall— (i) in respect of search initiated or books of accountor other documents or any assets requisitioned afterthe 30th day of June, 1995, but before the 1st day ofJanuary, 1997, serve a notice to such personrequiring him to furnish within such time not beingless than fifteen days; (ii) in respect of search initiated or books of accountor other documents or any assets requisitioned on orafter the 1st day of January, 1997, serve a notice tosuch person requiring him to furnish within such timenot being less than fifteen days but not more thanforty-five days, as may be specified in the notice areturn in the prescribed form and verified in the samemanner as a return under clause (i) of sub-section(1) of section 142, setting forth his total incomeincluding the undisclosed income for the blockperiod : Provided that no notice under section 148is requiredto be issued for the purpose of proceeding under thisChapter : Provided further that a person who has furnished areturn under this clause shall not be entitled to file arevised return;] (ii) in respect of search initiated or books of accountor other documents or any assets requisitioned on orafter the 1st day of January, 1997, serve a notice tosuch person requiring him to furnish within such timenot being less than fifteen days but not more thanforty-five days, as may be specified in the notice areturn in the prescribed form and verified in the samemanner as a return under clause (i) of sub-section(1) of section 142, setting forth his total incomeincluding the undisclosed income for the blockperiod : Provided that no notice under section 148is requiredto be issued for the purpose of proceeding under thisChapter : Provided further that a person who has furnished areturn under this clause shall not be entitled to file arevised return;] (b) the Assessing Officer shall proceed to determinethe undisclosed income of the block period in themanner laid down in section 158BBand theprovisions of section 142, sub-sections (2) and (3)of section 143[, section 144and section 145] shall,so far as may be, apply; (c) the Assessing Officer, on determination of theundisclosed income of the block period in accordancewith this Chapter, shall pass an order of assessmentand determine the tax payable by him on the basis ofsuch assessment; [(d) the assets seized under section 132orrequisitioned under section 132Ashall be dealt within accordance with the provisions of section 132B.] Undisclosed income of any other person. 158BD. Where the Assessing Officer is satisfied that anyundisclosed income belongs to any person, other thanthe person with respect to whom search was madeunder section 132 or whose books of account or otherdocuments or any assets were requisitioned undersection 132A, then, the books of account, otherdocuments or assets seized or requisitioned shall behanded over to the Assessing Officer havingjurisdiction over such other person and that AssessingOfficer shall proceed under section 158BC againstsuch other person and the provisions of this Chaptershall apply accordingly. 5.2In view of the above, it is clear that it is all appreciation ofevidence by all the three authorities and all the three authorities has gone on the factual matrix. Nothing is on record regardingnotice u/s 158BC/158BD. The return was filed by the legal heirs ofthe deceased are on the basis of documents which are available .The original assessee Murari Lal Gupta has expired, therefore, thelegal heirs of the deceased, on the basis of the documents filedreturn as advised by the professional. 5.3In that view of the matter, the tribunal while considering thematter, being a last fact finding authority has estimated on thebasis of original documents and after appreciation of evidence inwhich no interference is required to be made. 5.4Therefore, in the finding of fact the issues are required to beanswered in favour of the assessee and against the department. 6.The appeals stand dismissed. A copy of this judgment be placed in each file. (VIRENDRA KUMAR MATHUR),J. (K.S. JHAVERI),J. Brijesh 82 & 83.