Ita/760/2008 Of The Commissioner Of Income Tax v. M/S Blue Lines

IN THB HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 02 DAY OF AUGUST, 2014 PRESENT: THR HON BLE Mr.JUSTICE N.KUMAR| AND THR HON'BLE Mr.JUSTICK B.MANOHAR. ITA No.’760/200c/wITA No.'761/2008ITA No.762/2008,ITA No.763/2008,ITA No.764/2008,ITA No.765/2008,ITA No.'766/2008ITA No.769/2008 In ITA No.760/2008 BETWEEN 1.|The Commissioner of Income-Tax, Central Circle, C.R.Building, © Queens Road, Bangalore. oD The Assistant Commissioner of Income-Tax, Central Circle — 1(2), C.R.Building, | Queens Road, Bangalore. .Appellants (By Sri.K.V.Aravind, Adv.) P AND M/s.Blue Lines,Prop : Sri.Balakrishna Setty K.S. (HUF),|No.106, 1[%,]Floor,Money Chambers,#6, K.H.Road,Bangalore — 560 027. ...kRespondent (By Sri.S.Sarangan, Sr.Counsel forSri.P.Dinesh, Adv.) ITA No.760/2008 is filed under Section 260-A of Income-Tax Act, 1961 arising out of order dated 07.03.2008 passed inITA No.1249/BNG/2007, for the Assessment Year 1998-1999,praying that this Court may be pleased to formulate the)substantial questions of law stated therein and allow the appealand set aside the order passed by the ITAT, Bangalore in ITA No.1249/BNG/2007 dated 07.03.2008 confirming the order of theAppellate Commissioner and confirm the order passed by the)Assistant Commissioner of Income Tax, Central Circle — 1(2),Bangalore. x K KX In ITA No.761/2008 BETWEEN 1.|The Commissioner of Income-Tax, Central Circle, C.R.Building, — Queens Road, Bangalore. 2 |The Assistant Commissioner of Income-Tax, Central Circle — 1(2), @ C.R.Building, |Queens Road,Bangalore. ..Appellants (By Sri.K.V.Aravind, Adv.) AND M/s.Blue Lines,Prop : Sri.Balakrishna Setty K.S. (HUF),|No.106, 1[%,]Floor,Money Chambers,#6, K.H.Road,Bangalore — 560 027. ...Respondent (By Sri.S.Sarangan, Sr.Counsel forSri.P.Dinesh, Adv.) ITA No.761/2008 is filed under Section 260-A of Income-Tax Act, 1961 arising out of order dated 07.03.2008 passed inITA No.1250/BNG/2007, for the Assessment Year 1999-2000,praying that this Court may be pleased to formulate the)substantial questions of law stated therein and allow the appealand set aside the order passed by the ITAT, Bangalore in ITA No.1250/BNG/2007 dated 07.03.2008 confirming the order of theAppellate Commissioner and confirm the order passed by the)Assistant Commissioner of Income Tax, Central Circle — 1(2),Bangalore. wR RR In ITA No.762/2008 BETWEEN 1.|The Commissioner of Income-Tax, Central Circle, C.R.Building, — Queens Road, Bangalore. D2 The Assistant Commissioner of Income-Tax,Central Circle — 1(2),C.R.Building, |Central Circle — 1(2),C.R.Building, | Queens Road, Bangalore. . Appellants. (By Sri.K.V.Aravind, Adv.) AND M/s.Blue Lines,Prop : Sri.Balakrishna Setty K.S. (HUF),|No. 106, [%,]Floor,Money Chambers,#6, K.H.Road,Bangalore — 560 027. ...kRespondent (By Sri.S.Sarangan, Sr.Counsel forSri.P.Dinesh, Adv.) ITA No.762/2008 is filed under Section 260-A of Income-Tax Act, 1961 arising out of order dated 07.03.2008 passed inITA No.1251/BNG/2007, for the Assessment Year 2000-2001,praying that this Court may be pleased to formulate the)substantial questions of law stated therein and allow the appealand set aside the order passed by the ITAT, Bangalore in ITA No.1251/BNG/2007 dated 07.03.2008 confirming the order of the Appellate Commissioner and confirm the order passed by the|Assistant Commissioner of Income Tax, Central Circle — 1(2),Bangalore. wR RR In ITA No.763 /200 BETWEEN 1.|The Commissioner of Income-Tax, Central Circle, C.R.Building, — Queens Road, Bangalore. D2 The Assistant Commissioner of Income-Tax,Central Circle — 1(2),Central Circle — 1(2), C.R.Building, |Queens Road,Bangalore.Queens Road,Bangalore. . Appellants. (By Sri.K.V.Aravind, Adv.) AND Appellate Commissioner and confirm the order passed by the|Assistant Commissioner of Income Tax, Central Circle — 1(2),Bangalore. wR RR In ITA No.763 /200 BETWEEN 1.|The Commissioner of Income-Tax, Central Circle, C.R.Building, — Queens Road, Bangalore. D2 The Assistant Commissioner of Income-Tax,Central Circle — 1(2),Central Circle — 1(2), C.R.Building, |Queens Road,Bangalore.Queens Road,Bangalore. . Appellants. (By Sri.K.V.Aravind, Adv.) AND M/s.Blue Lines,Prop : Sri.Balakrishna Setty K.S. (HUF),|No.106, 1[%,]Floor,Money Chambers,#6, K.H.Road,Bangalore — 560 027. . Respondent (By Sri.S.Sarangan, Sr.Counsel forSri.P.Dinesh, Adv.) ITA No.763/2008 is filed under Section 260-A of Income-Tax Act, 1961 arising out of order dated 07.03.2008 passed in ITA No.1252/BNG/200/7, for the Assessment Year 2001-2002,praying that this Court may be pleased to formulate the)substantial questions of law stated therein and allow the appealand set aside the order passed by the ITAT, Bangalore in ITA No.1252/BNG/2007 dated 07.03.2008 confirming the order of the|Appellate Commissioner and confirm the order passed by the|Assistant Commissioner of Income Tax, Central Circle — 1(2),Bangalore. aK KK In ITA No.764/2008 BETWEEN 1.|The Commissioner of Income-Tax, Central Circle, C.R.Building, © Queens Road, Bangalore. oD The Assistant Commissioner of Income-Tax,Central Circle — 1(2), C.R.Building, |Queens Road, Bangalore. Central Circle — 1(2), C.R.Building, |Queens Road, Bangalore. . Appellants. (By Sri.K.V.Aravind, Adv.) AND M/s.Blue Lines,Prop : Sri.Balakrishna Setty K.S. (HUF),|No.106, 1[%,]Floor,Money Chambers,#6, K.H.Road,Bangalore — 560 027. . Respondent (By Sri.S.Sarangan, Sr.Counsel forSri.P.Dinesh, Adv.) ITA No./764/2008 is filed under Section 260-A of IncomeTax Act, 1961 arising out of order dated 07.03.2008 passed inITA No.1253/BNG/2007, for the Assessment Year 2002-2003,praying that this Court may be pleased to formulate the)substantial questions of law stated therein and allow the appealand set aside the order passed by the ITAT, Bangalore in ITA No.1253/BNG/2007 dated 07.03.2008 confirming the order of theAppellate Commissioner and confirm the order passed by the)Assistant Commissioner of Income Tax, Central Circle — 1(2),Bangalore. x K KX In ITA No.765/2008 BETWEEN 1.|The Commissioner | of Income-Tax, Central Circle, —C.R.Building, |Queens Road,Bangalore. 2 |The Assistant Commissioner of Income-Tax, Central Circle — 1(2),C.R.Building, |Queens Road,Bangalore. . Appellants. (By Sri.K.V.Aravind, Adv.) AND M/s.Blue Lines,Prop : Sri.Balakrishna Setty K.S. (HUF),|No.106, 1[%,]Floor, Money Chambers,#6, K.H.Road, Bangalore — 560 027. ...Respondent (By Sri.S.Sarangan, Sr.Counsel forSri.P.Dinesh, Adv.) ITA No.765/2008 is filed under Section 260-A of Income-Tax Act, 1961 arising out of order dated 07.03.2008 passed inITA No.1254/BNG/2007, for the Assessment Year 2003-2004,praying that this Court may be pleased to formulate the)substantial questions of law stated therein and allow the appealand set aside the order passed by the ITAT, Bangalore in ITA No.1254/BNG/2007 dated 07.03.2008 confirming the order of theAppellate Commissioner and confirm the order passed by the)Assistant Commissioner of Income Tax, Central Circle — 1(2),Bangalore. wR RR In ITA No.766/2008 BETWEEN 1.|The Commissioner of Income-Tax, Central Circle, C.R.Building, | Queens Road,Bangalore.Bangalore. D2 The Assistant Commissioner of Income-Tax,Central Circle — 1(2),C.R.Building, |Central Circle — 1(2),C.R.Building, | Queens Road, Bangalore. . Appellants. (By Sri.K.V.Aravind, Adv.) AND M/s.Blue Lines,Prop : Sri.Balakrishna Setty K.S. (HUF),|No.106, 1[%,]Floor,Money Chambers,#6, K.H.Road,Bangalore — 560 027. ...Respondent wR RR In ITA No.766/2008 BETWEEN 1.|The Commissioner of Income-Tax, Central Circle, C.R.Building, | Queens Road,Bangalore.Bangalore. D2 The Assistant Commissioner of Income-Tax,Central Circle — 1(2),C.R.Building, |Central Circle — 1(2),C.R.Building, | Queens Road, Bangalore. . Appellants. (By Sri.K.V.Aravind, Adv.) AND M/s.Blue Lines,Prop : Sri.Balakrishna Setty K.S. (HUF),|No.106, 1[%,]Floor,Money Chambers,#6, K.H.Road,Bangalore — 560 027. ...Respondent (By Sri.S.Sarangan, Sr.Counsel forSri.P.Dinesh, Adv.) ITA No.766/2008 is filed under Section 260-A of Income-Tax Act, 1961 arising out of order dated 07.03.2008 passed inITA No.1272/Bang/2007, tor the Assessment Year 1999-2000,|praying that this Court may be pleased to formulate the)substantial questions of law stated therein and allow the appealand set aside the order passed by the ITAT, Bangalore in ITA No.1272/Bang/2007 dated 07.03.2008 confirming the order of theAppellate Commissioner and confirm the order passed by the)Assistant Commissioner of Income Tax, Central Circle — 1(2),Bangalore. x K KX In ITA No.769/2008 BETWEEN 1.|The Commissioner of Income-Tax, Central Circle, C.R.Building, © Queens Road, Bangalore. D2 The Assistant Commissioner of Income-Tax,Central Circle — 1(2),C.R.Building, |Queens Road,Bangalore.Central Circle — 1(2),C.R.Building, |Queens Road,Bangalore. . Appellants. (By Sri.K.V.Aravind, Adv.) AND M/s.Blue Lines,Prop : Sri.Balakrishna Setty K.S. (HUF),|No. 106, [%,]Floor,Money Chambers,#6, K.H.Road,Bangalore — 560 027. ...kRespondent (By Sri.S.Sarangan, Sr.Counsel forSri.P.Dinesh, Adv.) ITA No.769/2008 is filed under Section 260-A of Income-Tax Act, 1961 arising out of order dated 07.03.2008 passed inITA No.1273/BNG/2007, for the Assessment Year 1998-1999,praying that this Court may be pleased to formulate the)substantial questions of law stated therein and allow the appealand set aside the order passed by the ITAT, Bangalore in ITA No. 1273/BNG/2007 dated 07.03.2008 confirming the order of the|Appellate Commissioner and confirm the order passed by the|Assistant Commissioner of Income Tax, Central Circle — 1(2),Bangalore. TheseAppealscomingOT]forHearing,this|day,N.AUMAR, J.,delivered the following: | JU DGMENT All these appeals are preferred by the Revenue.They are taken up together for consideration as a|common question of law is involved in all these appeals|and the assessee is the same. oOIn so tar as ITA No./760/2008, 762/2008,7163/2008, 7604/2008, 7659/2008 are concerned, tRevenue is in appeal, challenging the observation made|by the Tribunal that in the facts of this case, the|Revenue was not justified in drawing the presumption|under Section 132(4)(A) on the ground the assessee|name was not reflected in any of the seized materials.However, they are not disputing the quantum of tax| determined by the Authorities. AS a consequence|thereof, only if the presumption is held in favour of the|Department,theywould.be|entitled TO the.consequential claim regarding interest. The reason|given by the Tribunal is, though there was a seizure|and there were materials seized in the search, the said|materials did not reflect the name of the assessee.Most of the cheques were stale and some other cheques|were blank and some other cheques were in the name.of the third parties. 3.In the facts of these cases, we are of the view|that the finding recorded by the Tribunal on this aspect|cannot be found fault with and therefore, we are not|going into the legal issue regarding the scope of|presumption, which arrises under Section 14/7 readwith Section 143(3) and infact in other three appeals|also, similar finding was recorded by the Tribunal. — 3.In the facts of these cases, we are of the view|that the finding recorded by the Tribunal on this aspect|cannot be found fault with and therefore, we are not|going into the legal issue regarding the scope of|presumption, which arrises under Section 14/7 readwith Section 143(3) and infact in other three appeals|also, similar finding was recorded by the Tribunal. — a |In|SO|farasITANo. 761 /2008ITANo./66/2008 and ITA No./769/2008 are concerned, theclaim was three-fold. First claim is of Rs.2,05,00,000/-undisclosed income. The recipient of the income|during the course of the search of the premises|admitted the receipt of the said payment. The second|claim pertains to an amount of Rs.33,05,000/-_additionsmade§bytheAssessing.Authorityrepresenting the unaccounted money lending cheques.The third claim was regarding cash found during the|time of search was Rs.20,03,680/-. 5.|In so far as claim for Rs.2,05,00,000/- is|concerned, the Tribunal has not properly appreciated|the case of the assessee and taking into consideration,|a sum of Rs.79,55,280/- reflected in the statement of,aliairs filed on 31.03.1999 has granted the relief. The|said statement was not put forth as a defence beforethe Assessing Authority or before the First Appellate|Authority though an assessment order disclosing the| said amount was placed before both the Authorities.Under these circumstances, it is not possible to affirm|the said finding recorded by the Tribunal. The)Tribunal shall re-hear the matter, take note of the|materials on record and decide the said question|atresh. 6.|In so far as the claim for Rs.33,05,000/-|representing unaccounted money lending cheques are|concerned, the First Appellate Authority has set aside|the said finding by giving cogent reasons. That was|challenged by the Revenue before the Tribunal.Though the Tribunal has set out in detail the facts|regarding the said claim and the contention of the|assessee explaining the same, it has not appreciated|the material on record, heard the arguments and|recorded the finding one way or the other. Therefore, |when the Tribunal holds appeal is allowed, if that claim|is also set aside without assigning any reasons, it| cannot be sustained. Therefore, the said claim also|requires to be considered by the Tribunal afresh. TT In so far as the cash found at the time ot search, Rs.20,03,680/-, the third claim is concerned,the First Appellate Authority has affirmed the finding|recorded by the Tribunal. The assessee was in appeal.The Tribunal has not recorded any finding on this|aspect of the matter. Again, in the operative portion of|the order, states that the appeal is allowed, it cannot|be construed as setting aside the order of the Appellate|Authority as no reasons are given. Therefore, that|aspect also requires to be considered by the Tribunal|atresh. | 8.iteITANo. /64/ 2008aclaimforRs.11,39,000/- was stated to be unaccounted on the|basis of the cheque found but the Tribunal has not|recorded any finding on that aspect though the First| Appellate Authority has granted the relief to the|assesee. Hence, we pass the following order: 1)ITA No.760/2008, ITA No./62/2008, ITA| No. 7/63/2008ITANo.7659/2005are|dismissed. $$4ITA No.761/2008, ITA No.764/2008, ITA No.766/2008, ITA No.769/2008 | are allowed. 111)The impugned order passed by the Tribunal| is set aside. The matter is remanded back to.the Tribunal for fresh consideration in the.light of the observations made in this order.the Tribunal for fresh consideration in the.light of the observations made in this order. Ordered accordingly. dh* Sd/-.JUDGE| Sd/-| JUDGE|