Mrs. S v. Although Several Questions Have Been Raised In The Memo Of

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1750 OF 2011WITHINCOME TAX APPEAL NO.2167 OF 2011 Commissioner of Income Tax Central III V/s.M/s. Riya Travels & Tours (I) Pvt. Ltd. ..Appellant. ..Respondent. Mrs. S. V. Bharucha, for the Appellant in ITXA No.1750 of 2011.Mrs. S. V. Bharucha with Padma Divakar, for the Appellant in ITXA No.2167 of 2011. Mr. P. J. Pardiwala, Sr. Advocate with Mr. S. G. Lakhani, for the Respondent in both the matters. P.C:- CORAM: J.P.DEVADHAR & M.S.SANKLECHA,JJ.DATE : 26[th] MARCH, 2013. Although several questions have been raised in the memo of appeal for Assessment Years 2000-01 and 2001-02, the basic controversy between the parties is :- Whether in the facts and circumstances of the case, the Tribunal was justified in setting aside the order passed under Section 263 of the Income Tax Act, 1961 by the Commissioner of Income Tax? 2The Respondent-Assessee was subjected to a search and seizure operation under Section 132 of the Income Tax Act, 1961 (the said Act). Thereafter, on 31[st] December, 2007 the Assessing Officer passed an order under Section 143(3) r/w Section 153A of the said Act. The Assessing Officer while passing the assessment order dated 31[st] December, 2007 found that during the subject Assessment Years, the amount withdrawn from the bank claimed as refund to its client was found to be bogus, the same could not be added to the income as the same has not been claimed as expenditure while determining its income for the purposes of tax. 3However, the Commissioner of Income Tax in exercise of his power under Section 263 of the said Act sought to revise the Assessment Order dated 31[st] December, 2007 on the basis of the statement made during the course of search that the refunds were bogus as the amounts withdrawn from banks were not refunded to its customers. 4On appeal, the Tribunal by the impugned order held that the exercise of jurisdiction under Section 263 of the Act by the Commissioner of Income Tax was not proper. This was the on ground that after considering all aspects of the case, the view of the Assessing Officer was a possible view to the effect that bogus refund had not been claimed as expenditure while returning its income, no occasion for adding the same can arise. In that view of the matter, the Tribunal held that the exercise of jurisdiction by the Commissioner of Income Tax was not proper. Further, on merits, the Tribunal held that though it is an undisputed fact that amounts were withdrawn from bank, the Respondent-Assessee had claimed the withdrawal were for refund to its clients, yet in fact, these amounts withdrawn from the bank were not refunded to its clients. However, as these refunds were not claimed as an expenditure and/or reduced from its income to arrive at the taxable profits, addition of the same is not justified. In fact,the impugned order records the fact that save for the subject assessment years i.e. 2000-01 and 2001-02, the Respondent-Assessee had for the Assessment Years 2003-04, 2004-05 and 2005-06, claimed these bogus refunds as expenditure to arrive at the taxable income, and in such cases, the Revenue had added the bogus refund claimed as expenditure, to the income of the Respondent-Assessee and brought it to tax. On facts, the Tribunal held that for the subject assessment years no occasion to add the amounts claimed as refund (bogus) can arise. 5In these circumstances, as the decision of the Tribunal is on a finding of fact, we see no reason to entertain the proposed question of law for the subject Assessments Year 2000-01 and 2001-02. 6Accordingly, both the appeals are dismissed with no order as to costs. (M.S.SANKLECHA,J.) (J.P.DEVADHAR,J.)