Db Income Tax Appeal v. Union Of India

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR. DB INCOME TAX APPEAL NO.58/2002. Smt. Shanti Devi Khandelwal C/o M/s Rajdeep Hotel, Bapu Bazar, Jaipur. Versus 1.Union of India through the Chief Commissioner of Income Tax, New Central Revenue Building, Statue Circle, Jaipur.2.Deputy Commissioner of Income Tax, Central Circle-1, New Central Revenue Building, Statue Circle, Jaipur. DATE OF ORDER ::: 04.10.2016. HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE BANWARI LAL SHARMA Mr. Aditya Vijay for the appellant.Mr. Anil Mehta for the respondent. 1.By way of this appeal, the appellant assessee haschallenged the judgment and order of the Tribunal whereby theTribunal has dismissed the appeal preferred by the assesseeconfirming the order of CIT (Appeals). 2.Counsel for the appellant has contended that asearch was conducted at the residence of the assessee on2.8.1996. The original assessment was completed u/s158BC/143(3) on 30.08.1997 at an undisclosed income ofRs.14,97,539/-. On appeal, the I.T.A.T., Jaipur in ITSSANo.44/J:P/1997 dated 16.7.1998 has allowed certain relief andrestored back to re-examine the issue of undisclosed income forthe years for which the assessee is not required to file the returnas per provisions of Sec.139(10) of the I.T. Act. Accordingly, the AO, after providing sufficient opportunity of being heard to theassessee, has held that in the assessment year 1990-91, theTribunal has upheld the addition of Rs.10,000/-, therefore, theincome for the assessment year 1990-91 disclosed by theassessee at Rs.17,690/- is now worked out to Rs.27,690/-,which is above the taxable limit and similarly the income for theassessment year 1995-96 disclosed by the assessee atRs.45,550/- is also above the taxable limit. He, therefore,treated the undisclosed income for the assessment years 1990-91 and 1995-96 at Rs.73,240/- (Assessment year 1990-91Rs.27,690/- for the assessment year 1995-96) and passed theorder u/s 158BC/143(3)/ set aside on 15.3.2001. 3.While admitting the appeal, following questions of law were framed by this court on 03.07.2002. “Whether in the facts and circumstances ofthe case the I.T.A.T. was correct in law inhaving disregarded the definition ofundisclosed income as prescribed undersection 158B(b) and in having treated thebelow taxable incomes also as undisclosedincomes? Whether in the facts and in the circumstancesof the case, the ITAT can be justified in havingtaken the view that although tax has beenevaded by the appellant only in respect of anamount of Rs.10,000/- yet undisclosedincome for the Block Period will be taken atRs.73,240/-?” 4.Counsel for the appellant has relied upon Section158B(b) of the Income Tax Act which was made effective from01.07.1995 and the judgment of this Court in Chain Sukh Rathi Vs. Commissioner of Income Tax & anr.- (2004)170 ITR 368, more particularly, para 13 which reads as under: “When some material was seized connectingthe concealed income, the ITO can computethe income on that basis but that should becomputed and taxed in accordance with theprovisions of Act, 1961. Therefore, the taxexemption limit has to be kept in mind and tothat extent, income not chargeable to tax, taxshould not be charged on that part of theincome.” 5.Counsel for the respondents contended that the view taken by all the authorities is just and proper and he contended that the appeal deserves to be dismissed. 6.We have heard Mr. AdityaVijay, learned counsel for the appellant. 7.The Tribunal has committed error in considering theundisclosed income under the provisions of Section 158B(b) ofthe Income Tax Act. 8.In view of the judgment of this Court, we are of theopinion that the question no.1 requires to be decided in favour ofthe assessee. Question no.2, therefore, is not required to beanswered. 9.The appeal stands disposed of accordingly. 5.Counsel for the respondents contended that the view taken by all the authorities is just and proper and he contended that the appeal deserves to be dismissed. 6.We have heard Mr. AdityaVijay, learned counsel for the appellant. 7.The Tribunal has committed error in considering theundisclosed income under the provisions of Section 158B(b) ofthe Income Tax Act. 8.In view of the judgment of this Court, we are of theopinion that the question no.1 requires to be decided in favour ofthe assessee. Question no.2, therefore, is not required to beanswered. 9.The appeal stands disposed of accordingly. (BANWARI LAL SHARMA), J. (K.S. JHAVERI), J. bblm