D.b.income Tax Appeal (Ita) v. Cit & Another

-1- IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN ATJAIPUR BENCH, JAIPUR --------------------------------------------------------------------- D.B.INCOME TAX APPEAL (ITA) NO. 21/2001. APPELLANT: Heera Lal Kataria son of Late Shri Chittar Mal Kataria, aged about65 years, Proprietor of M/s.Rohit Road Lines, H-2, TransportNagar, Jaipur. VERSUS RESPONDENTS: 1.The Commissioner of Income Tax, N.C.R.B.Building, StatueCircle, Jaipur.Circle, Jaipur. 2.Assistant Commissioner of Income tax, Circle 3(1),N.C.R.B.Building, Statue Circle, Jaipur.N.C.R.B.Building, Statue Circle, Jaipur. Date of Judgement : 31.8.2016 HON'BLE MR.JUSTICE K.S.JHAVERIHON'BLE MR.JUSTICE AJAY RASTOGI Mr.P.K.KASLIWAL, Counsel for appellant-assessee.Mr.R.B.MATHUR] Mr.NIKHIL SIMLOTE] Counsel for respondent-revenue.Mr.K.D.MATHUR]JUDGEMENT-------------- 1.By way of this appeal, assessee has challenged the judgment & order of the Income Tax Appellate Tribunal wherebythe Tribunal has partly allowed the appeal of the assessee. 2.The case of the assessee is that the assessee has filed his return for the Assessment Year 1990-91 whereby his books ofaccounts were not accepted and the Assessing Officer hasenhanced his income from Rs.92,685/- to Rs.8,33,214/- and the -2-D.B.INCOME TAX APPEAL (ITA) NO. 21/2001.Heera Lal Kataria VS. CIT & Another. appeal was also allowed in part by the CIT (Appeals). 3.Being aggrieved by the said order, the assessee has preferred appeal before the ld.Tribunal. The ld.Tribunal haslooked into the books of accounts and after verification by therepresentative of department, has delivered the judgmentestimating the income to Rs.1,00,000/-. 4.The counsel for appellant merely contended that havingaccepted the books of accounts, the ld.Tribunal has not assignedany reason or basis for estimating the income to Rs.1,00,000/-. 5.At the time of admission, no substantial question of law wasframed, however, we consider it appropriate to frame followingsubstantial question of law:- “Whether the Tribunal was justified in law insustaining addition of Rs.1 lac on estimated basisirrespective of the fact, that the Tribunal has foundthat provisions under Section 145(2) could not beapplied as the Books of Accounts and profits derivedtherefrom found to be correct and complete?” 6.Counsel for appellant has taken us to the provisions of Sec.145(2) which read as under:- “145(2). The Central Government may notify in theOfficial Gazette from time to time income computationand disclosure standards to be followed by any class ofassessees or in respect of any class of income.” 7.Counsel for appellant contended that having accepted the books of accounts, the Tribunal could not have estimated the income of Rs.1,00,000/- and while estimating the income oughtto have given cogent reasons and no reasons are given and it isa pure estimation which is not permissible in law. -3- D.B.INCOME TAX APPEAL (ITA) NO. 21/2001.Heera Lal Kataria VS. CIT & Another. 8.Counsel for respondent contended that in view of rejectionof books of accounts by the Assessing Officer and the CIT(Appeals), the ld.Tribunal while considering the books ofaccounts has appreciated the same and has rightly estimated theincome to Rs.1,00,000/-. 9.We are of the view that after having observations made bythe ld.Tribunal in para-3, which read as under:- 7.Counsel for appellant contended that having accepted the books of accounts, the Tribunal could not have estimated the income of Rs.1,00,000/- and while estimating the income oughtto have given cogent reasons and no reasons are given and it isa pure estimation which is not permissible in law. -3- D.B.INCOME TAX APPEAL (ITA) NO. 21/2001.Heera Lal Kataria VS. CIT & Another. 8.Counsel for respondent contended that in view of rejectionof books of accounts by the Assessing Officer and the CIT(Appeals), the ld.Tribunal while considering the books ofaccounts has appreciated the same and has rightly estimated theincome to Rs.1,00,000/-. 9.We are of the view that after having observations made bythe ld.Tribunal in para-3, which read as under:- “3. … … The reasons taken for rejecting the accountshave duly been considered with specific reference tothe explanation given by the assessee. The bookswere produced before us and the ld.Seniordepartmental representative was directed to verify thediscrepancy with respect to purchase of tyres aspointed out by the ld.CIT(A) in his order at para 15.2.This has also been made a basis for rejecting theaccounts of the assessee. The ld.departmentalrepresentative has informed that version of theassessee is correct. Accordingly and in view of varioussubmissions of the appellant, we find that the accountcould not have been rejected under section 145(2) asthe accounts were correct and complete and trueprofit of assessee could have been deduced therefrom.However, we also find that the assessee has notmaintained complete vouchers for various expensesetc. … …” 10.The books of accounts which were submitted by theassessee were in order, there was no basis for the ld.Tribunal toenhance the income to Rs.1,00,000/-. 11.In our view, while accepting the books of accounts,estimating the income to Rs.1,00,000/- by the ld.Tribunal is not permissible in law & the Tribunal ought not to have estimatedincome having accepted books of accounts. 12.In view of the above, we answer the question in favour of -4-D.B.INCOME TAX APPEAL (ITA) NO. 21/2001.Heera Lal Kataria VS. CIT & Another.the assessee and against the revenue. The appeal accordinglystands allowed.(AJAY RASTOGI),J. (K.S.JHAVERI),J.Solanki DS, P.S.