District- Jhunjhunu v. Commissioner Of Income Tax, Jaipur

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR D.B.INCOME TAX APPEAL NO. 197 / 2005 Kapil Bhaskar Khetri, District- Jhunjhunu ----Appellant Versus Commissioner of Income Tax, Jaipur Central Revenue Building, Near Statue Circle, B.D. Road, Jaipur. ----Respondent __________________________________________ For Appellant : Mr. Vivek Singhal For Respondents : Mr. Daksh Pareek __________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE DINESH MEHTA Judgment Per Hon’ble Jhaveri, J. 06/12/2016 1. By way of this appeal, the appellant has challenged the judgment of the Tribunal whereby the Tribunal has partlyallowed the appeal filed by the assessee. 2.This Court while admitting the appeal on 14.11.2005, framed the following substantial question of law: “Whether the learned ITAT was jjustified inupholding the addition of Rs.1,50,000/-from the repayment of the installmentwhen no such document was seized in respect of thereof and when the income ofthe appellant was found by the learnedITAT as fact below taxable limit?” 3.The facts of the case are that a search and seizureoperation u/s 132(1) was carried out at the business andresidential premises of Shri Rajendra Balotia, Vidyut Nagar,Ajmer Road, Jaipur on 25.02.2000. During the course of searchoperation certain papers/documents in respect of the appellant(brother-in-law of Shri Rajendra Balotia) were found and aftercompleting the block assessment by the DCIT,Cir-2, Jaipurrelevant para of order/documents were sent to ITO, Chirawa,which was later transferred to the Income Tax Department. TheDCIT vide his letter dated 19.07.2002 has pointed out that theappellant has purchased a shop at Hawa Sadak, Jaipur on19.07.1991 for a consideration of Rs.40,000/-. Since theappellant was not a tax payer, a notice under section 158BDwas issued to him on 18.12.2000. The assessee did not furnishhis return of income. Therefore, a notice under section 142(1)of the Act was issued on 10.03.2003 and 07.05.2003. Theassessee filed return on 08.01.2004 and disclosed his incomeas Rs.40,000/-. The assessee purchased a Mahindra Jeep on27.05.1994 in the name of his uncle and for this purpose fixeddeposits of Rs.62,000/- were made with Ashoka LeylandFinance Ltd. and total repayments of Rs.318788/- were madeto ALFL. Assessee was asked to explain the source ofacquisition of the jeep amounting to Rs.380788/-. 4.Counsel for the appellant has contended that theTribunal has seriously committed an error in estimating theundisclosed income of Rs.1,50,000/- on the basis ofinstallments paid and adding Rs.1,50,000/- and giving benefitof Rs.1,57,000/-. 5.Counsel for the respondents has supported thejudgment of the CIT (Appeals) and also the order of the Tribunal and has said in para 3 as under: 4.Counsel for the appellant has contended that theTribunal has seriously committed an error in estimating theundisclosed income of Rs.1,50,000/- on the basis ofinstallments paid and adding Rs.1,50,000/- and giving benefitof Rs.1,57,000/-. 5.Counsel for the respondents has supported thejudgment of the CIT (Appeals) and also the order of the Tribunal and has said in para 3 as under: “With this back-ground, we heard both theparties at length and gone through thematerial available on record form which itappears that the FDRs were pledged withM/s. Ashok Leyland Finance Ltd. for Rs.62,000/- These two FDRs – one is in thename of the assessee for Rs. 15,000/- andanother is in the name of his uncle, ShriNagesh Bhaskar for Rs. 47,000/-. We areof the view that assessee was able to saveRs. 15,000/- in his life as he never madeother investment. Regarding another FDRfor Rs. 47,000/- no addition can be madein the hands of the assessee as it is in thename of uncle; Shri Nagesh Bhaskar. So,we accept the face value of Rs. 62,000/- asan explained money. No addition can bemade on this component. Regarding theother component, which comes to theinstallment payment to M/s. AshokaLeyland Finance Ltd. @ Rs. 13,000/- permonth, we are of the view that assesseemight have earned the income from theJeep. He has incurred the expenditure onthe Driver’s salary, fuel, repairs andmaintenance and depreciation, etc., forwhich no accounts were maintained. Hisincome otherwise was below taxable limit.The assessee has paid the installment @Rs. 13,000/- per month. When books ofaccount were not maintained by theassessee, then addition will have to bemade on estimate basis. In thesecircumstance, we agree with the orders ofthe lower authorities in principal. However,the addition made on estimate basis is looking on higher side. Therefore, by givingthe benefit of face value of FDRs as statedabove and other circumstances asdiscussed above, we modify both theorders of the lower authorities and restrictthe addition to Rs. 1,50,000/- (Rupees onelac fifty thousand) only. Thus, the assesseewill get the relief of Rs. 1,57,000/- (Rupeesone lac fifty-seven thousand) only on ad-hoc basis. This ground is partly allowed.” 6.Thus, on the issue which has come up for ourconsideration, we are of the opinion that the reasoning adoptedby the Tribunal is not just and proper and based on suchreasoning addition of Rs.1,50,000/- appears to be reasonable.The question is answered in favour of the department andagainst the assessee. However, we make it clear that whilegiving effect to the order of the ITAT, available benefits underthe Act will be conferred to the assessee. 7.Appeal of the assessee is, thus, dismissed. (DINESH MEHTA)J. (K.S. JHAVERI)J. bblm