Itxa/4543/2010 Of The Commissioner Of Income Tax Iii Pune v. Lohiia And Devikesh

itxa4543-10 IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.4543 OF 2010 The Commissioner of Income Tax-III, Pune ..Appellant. V/s. M/s. Lohia & Devikesh ..Respondent. Mr. Vimal Gupta, senior Advocate for the appellant.Mr. Mihir Naniwadekar for the respondent. CORAM : J.P. DEVADHAR AND M.S. SANKLECHA, JJ.DATED : 24TH SEPTEMBER, 2012 P.C. :- 1.Although several questions of law are raised by the revenue in this appeal, the basic question is, Whether the ITAT was justified in setting aside the order passed by the CIT under Section 263 of the Income Tax Act, 1961. 2.The relevant facts are that pursuant to search action initiated at the premises of the assessee on 10[th] November, 2001 block assessment proceedings were initiated against the assessee. On 8[th ] October, 2003 block assessment order was passed accepting the Nil return of income filed by the assessee in the block assessment proceedings. 3.Thereafter, the CIT by invoking jurisdiction under Section 263 of the Income Tax Act, 1961 ('the Act' for short) set aside the block assessment order on the ground that during the course of search at the premises of Rajashri enterprises, it was found that the assessee had taken loan of Rs.13 lakhs from Rajashri Enterprises who had indulged in hawala transactions. According to the CIT, the alleged loan of Rs. Lakhs constituted hawala transaction which has not been considered by the assessing officer. Accordingly, the CIT set aside the assessment order and directed the assessing officer to pass fresh assessment order. 4.On appeal filed by the assessee, the ITAT by the impugned order has set aside the order of the CIT on the ground that no material was found during the course of search proceedings at the premises of the assessee to show that Rs.13 lakhs received by the assessee from Rajashri Enterprises represented the hawala transaction. The Tribunal has further held that the loan of Rs.13 lakhs was duly reflected in the books of accounts maintained by the itxa4543-10 assessee and that the tax on interest paid were also deducted at source. Moreover, the Tribunal has noted that the loan of Rs.13 lakhs taken by the assessee was very much before the revenue authorities even before the search action was initiated at the premises of the assessee and, therefore, the question of enquiring the genuineness of the said loan transaction in block assessment proceedings did not arise at all. 5. In these circumstances, in our opinion, the decision of the Tribunal is based on the finding of fact and no interference is called for. Accordingly, the appeal is dismissed with no order as to costs. (M.S. SANKLECHA, J.) (J.P. DEVADHAR, J.)