Ita/643/2023 Of The Pr Commissioner Of Income Tax v. M/S. Hassan Hajee And Co

Digitally signed byLAKSHMINARAYAN NLocation: High Court ofKarnataka IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12 DAY OF FEBRUARY, 2025 PRESENT THE HON'BLE MR JUSTICE KRISHNA S DIXIT AND THE HON'BLE MR JUSTICE G BASAVARAJA INCOME TAX APPEAL NO. 643 OF 2023 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, PLOT NO.5, EDC COMPLEX, PATTO, PANAJI-403 001. AAYAKAR BHAVAN, PLOT NO.5, EDC COMPLEX, PATTO, PANAJI-403 001. 2. THE ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1, CENTRAL CIRCLE-1, PRESENT ADDRESS DCIT, CIRCLE-2(1), C.R.BUILDING, ATTAVARA, MANGALURU-575 001. …APPELLANTS (BY SRI. SUSHAL TIWARI N., ADVOCATE) AND: M/S. HASSAN HAJEE AND CO., D. NO. 20-8-678, NEAR OLD MUNICIPAL OFFICE, BUNDER, MANGALURU-575 001 PAN NO. AAAFH 8204R. …RESPONDENT (BY SRI. ANNAMALAI S. AND SRI. VENKATESH K. PANI, ADVOCATES) THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 22/09/2022 PASSED IN ITA NO.1358/BANG/2015, FOR THE ASSESSMENT YEAR 2006-2007 PRAYING TO FORMULATE THE SUBSTANTIAL - 2 - QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGLAURU IN ITA NO. 1358/BANG/2015 DATED 22/09/2022 FOR ASSESSMENT YEAR 2006-2007 ANNEXURE-A CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1), MANGALURU AND ETC. THIS APPEAL, COMING ON FOR HEARING ON INTERLOCUTORY APPLICATION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE KRISHNA S DIXIT and HON'BLE MR JUSTICE G BASAVARAJA ORAL JUDGMENT (PER: HON'BLE MR JUSTICE KRISHNA S DIXIT) The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 questioning the legality of order dated 22[nd] September, 2022 passed by the Income Tax Appellate Tribunal, "C" Bench, Bengaluru in ITA No.1358/Bang/2015 for the Assessment Year 2006-2007. 2. The Revenue has framed the following substantial questions of law in the appeal memo: "1. Whether on facts and in circumstances of the case, the tribunal is right in law in quashing order framed under section 153A R.W.S 143 (3) of the income tax act on the ground that there was no search and seizure relating to these assessment even when specific evidence pertaining to these years has been seized, placed on record and additions has been made on its basis, which is also duly recorded by the Hon'ble ITAT in their order? 2. Whether on facts and circumstances of the case, the honourable tribunal is right in law in quashing the assessment order framed under section 153A R.W.S 143 (3) of the income tax act, ignoring the additions made on the account of labour charges based on specific seized material which authorise assessing officer to assess "total income" of the Assessee, as envisaged, the Hon'ble Supreme Court judgement in Pr. Commissioner of income tax V Abhisar Buildwell dated 24.04.2023? 3. Whether on fact and circumstances of the case, the Hon'ble Tribunal is right in law in deleting the disallowance of labour charges claimed on the basis of inadequate supporting document ignoring the fact that the AO has made you duly additions on the basis of seized material, which is duly elaborated in the assessment order. 4. Whether on facts and circumstances of keys, the Hon'ble tribunal is right in law in holding that is incumbent upon the AO to reject the books of account before making an addition on account of inflated expenditure, ignoring the fact that AO has made addition based on the evidence found in the search, which is duly mentioned in the assessment order and the facts of the case of Shri Ganesh shipping agency are not applicable in Assessee case? 3. Whether on fact and circumstances of the case, the Hon'ble Tribunal is right in law in deleting the disallowance of labour charges claimed on the basis of inadequate supporting document ignoring the fact that the AO has made you duly additions on the basis of seized material, which is duly elaborated in the assessment order. 4. Whether on facts and circumstances of keys, the Hon'ble tribunal is right in law in holding that is incumbent upon the AO to reject the books of account before making an addition on account of inflated expenditure, ignoring the fact that AO has made addition based on the evidence found in the search, which is duly mentioned in the assessment order and the facts of the case of Shri Ganesh shipping agency are not applicable in Assessee case? 5. Whether on fact and circumstances of case, the Hon'ble tribunal is right in law in deleting the disallowance of speed money claimed as labour charges through employees sub contractors ignoring evidence found in the course of search and investigations which suggested the said expenses were not genuine? 6. Whether in facts and circumstances of the case, the honourable tribunal erred in not appreciating the fact the subcontractors were regular employees of the assessee and the facts of the case of Shri Clifford D'Souza notification, are not applicable in the assessee's case? 7. Whether on fact and circumstance of case, the Hon'ble tribunal is right in law in deleting the disallowance of excess claim of speed money ignoring the scientific calculation adopted based on seized evidence? 8. Whether on facts and circumstances of case the hon'ble tribunal is right in law in deleting the disallowance of speed money claimed as labour charge to disguise payment, not authorised by law, made to port officials ignoring the evidence founds during the course of search actions and post search investigations? 9. Whether in facts and circumstances case the Hon'ble tribunal has erred in law by not treating statement recorded from one of the partners during the course of such as incriminating evidence on the basis of which AO made additions in assessement u/s 153A r.w.s 143(3) for AY?" 3. Since the amount involved in the case falls below the minimum ceiling limit prescribed in the CBDT Circular No.9/2024 dated 17[th] September, 2024, the Appeal is not maintainable and accordingly it is disposed off reserving liberty to recall the order in the event matter falls in one of the exceptions enumerated in the Circular or otherwise. Sd/- (KRISHNA S DIXIT) JUDGE Sd/- (G BASAVARAJA) JUDGE LNN/List No.: 1 Sl No.: 19