M/S Kaizen Enterprises Pvt. Ltd., S-67 v. Assistant Commissioner Of Income Tax, Central Circle, Kota

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 71/2019 M/s Kaizen Enterprises Pvt. Ltd., S-67-68, Opera Hospital Road,Indra Vihar, Kota. ----Appellant Versus Assistant Commissioner Of Income Tax, Central Circle, Kota ----Respondent For Appellant(s) : Mr. Daksh Pareek through VCFor Respondent(s): HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE SAMEER JAIN 20/01/2022 Order This appeal is filed by the assessee to challenge thejudgment of the Income Tax Appellate Tribunal dated 18.01.2019.Following questions are presented for our consideration:- "(i) Whether in the facts and circumstances of thecase as well as in the law, the Ld. ITAT was correctin holding that the set-off in case of undisclosedincome is not available to the appellant, despite thefact that income even if undisclosed has to beassessee as normal business income as held byvarious judicial pronouncement by the Hon'ble ApexCourt as well as by various High Courts? (ii) Whether in the facts and circumstances of thecase as well as in the law, the Ld. ITAT was correctin relying on the statements made at the time ofenquiry, as the same though important piece ofevidence however, cannot be held as conclusive? (iii) Whether in the facts and circumstances of thecase and in law, the Ld. ITAT was correct in holdingthe entire receipts on account of on-money to beundisclosed income and was right in applying theG.P. rate instead of N.P. rate on the undisclosedreceipt? (iv) Any other question of law as deemed fit in thefacts and circumstances of the case may also beframed by the Hon'ble Court in the interest ofjustice." Though multiple questions are framed the issue is singularnamely the decision of the Tribunal to confirm the view of theassessing officer and CIT (Appeals) to add a sum of Rs.1.35 croresin the hands of the assessee firm by way of income for therelevant assessment year 2013-14. Briefly stated the facts are that the assessee was engaged inthe business of real estate development and was subjected tosearch operations. During said search the statement of thedirector of the assessee-firm was recorded under Section 132(4)of the Income Tax Act, 1961. In such statement the directorconfirmed that a sum of Rs.1.35 crores was received by way ofon-money which was the income of the firm and which he wasprepared to offer to tax. The assessing officer therefore madeaddition of said sum by way of income of the firm. The asseseecarried the matter in appeal. The CIT (Appeals) gave partial reliefto the assessee and applied the profit ratio of 22% on such receiptto bring the income to tax. The revenue was aggrieved by thisportion of the order of CIT (Appeals). The Tribunal allowed therevenue's appeal and restored the order of the assessing officer.In the result the entire sum of Rs.1.35 crores stood added to theincome of the assessee whereupon this appeal has been filed. Having heard learned counsel for the appellant and havingperused the documents on record, we do not find any reason tointerfere. The director of the firm had made a categorical andclear statement of admitting the on-money received of Rs.1.35crores which was the income of the firm. The statement was not retracted for a long time. Under the circumstances there is noquestion of law applying the net profit ratio to find out the incomeembedded in such receipt which alone could be brought to tax aswas suggested by the counsel for the appellant. No question oflaw arises. The appeal is dismissed. (SAMEER JAIN),J(AKIL KURESHI),CJKAMLESH KUMAR/7