M/S.jaidayal Prannath Kapur v. Commissioner Of Income Tax-Viii, Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 06.08.2021 CORAM : THE HON'BLE MR.JUSTICE T.S.SIVAGNANAMAND THE HON'BLE MR.JUSTICE SATHI KUMAR SUKUMARA KURUP T.C.A. No.301 of 2010 M/s.Jaidayal Prannath Kapur70/86, Godown Street,Chennai – 600 001.... AppellantVs. Commissioner of Income Tax-VIII,Chennai.... Respondent Tax Case Appeal preferred under Section 260A of the IncomeTax Act, 1961, against the order, dated 02.01.2009, passed bythe Income Tax Appellate Tribunal, Chennai "D" Bench, inI.T.A.No.1816/Mds/2008, for the Assessment Year 2002-03. Preferred against the order passed by the Commissioner ofIncome Tax (Appeals)-IX, Chennai-34 dated 03.07.2008 made inI.T.A.No.128/07-08 preferred against the order passed by theIncome Tax Officer, Ward VIII (4), Chennai-6 dated 19.12.2007 inPAN AAAFJ3186G for the assessment year 2002-03. For Appellant : Mr.T.Vasudevan For Respondent : Mrs.V.Pushpa Standing Counsel J U D G M E N T(Judgment was delivered by T.S. SIVAGNANAM, J.) This Tax Case Appeal filed by the assessee under Section260-A of the Income Tax Act, 1961 ("the Act" for brevity), isdirected against the order, dated 02.01.2009, passed by theIncome Tax Appellate Tribunal, Chennai "D" Bench, inI.T.A.No.1816/Mds/2008, for the Assessment Year 2002-03. 2.The appeal was admitted on 12.04.2010 to decide thefollowing substantial questions of law :“1.Whether the Tribunal was justified inupholding the reopening by issue of notice u/s.148 forthe purpose of assessing a 'deemed income' u/s.69 https://hcservices.ecourts.gov.in/hcservices/ wihout there being reason to believe the escapement of'real income'? 2.Whether on the facts and in the circumstancesof the case, the Tribunal was correct in law inconfirming the addition of Rs.70,13,506/- underSection 69 as unexplained investment of the amountspent out on the purchase of shares when the sourceremains undisputed and forms part of accounts?” 3.We have elaborately heard Mr.T.Vasudevan, learned counselfor the appellant/assessee and Mrs.V.Pushpa, learned StandingCounsel appearing for the respondent/Revenue. https://hcservices.ecourts.gov.in/hcservices/ wihout there being reason to believe the escapement of'real income'? 2.Whether on the facts and in the circumstancesof the case, the Tribunal was correct in law inconfirming the addition of Rs.70,13,506/- underSection 69 as unexplained investment of the amountspent out on the purchase of shares when the sourceremains undisputed and forms part of accounts?” 3.We have elaborately heard Mr.T.Vasudevan, learned counselfor the appellant/assessee and Mrs.V.Pushpa, learned StandingCounsel appearing for the respondent/Revenue. 4.The assessment for the Assessment Year underconsideration, AY 2002-03, was reopened and notice under Section148 of the Act was issued. From the findings recorded by theAssessing Officer in the Assessment Order, dated 19.12.2007, wefind that, initially, the assessee did not extend fullcooperation in the reopened assessment proceedings, andultimately, notice was issued under Section 142(1) of the Actcalling upon the assessee to furnish the details of the sourceof payment of a sum of Rs.60,63,000/- by cash to M/s.AdityaSecurities Ltd., and another amount of Rs.9,50,000/- by DemandDraft to the very same company. The assessee, by letter dated19.11.2007, confirmed the purchase of shares amounting toRs.2,00,34,125/- through the said company for the year ended31.03.2002 and also Rs.60,63,000/- paid to the said company bycash on various dates and another amount of Rs.9,50,000/- paidby Demand Draft. This was a candid admission made by theassessee before the Assessing Officer, which has not beendisputed even before us. When the assessee was questioned asregards the nature and source of payment, they stated thatRs.98,40,421/- was due from Sundry Debtors as on 31.03.1999.The assessee was requested to furnish the name and address ofthe Sundry Debtors who gave/settled their amounts by cash withdate and the hearing of the case was postponed. However, theassessee was unable to provide any details and filed anaffidavit, which was rejected by the Assessing Officer asbaseless. Since the assessee has failed to furnish the natureand source for Rs.70,13,506/- paid to M/s.Aditya SecuritiesLtd., and failed to furnish the name and address of the SundryDebtors, who they claim to have paid/settled their amounts tothe assessee, the Assessing Officer rightly drew adverseinference against the assessee in the absence of any documentaryevidence and completed the assessment by order dated 19.12.2007.Aggrieved by the same, the assessee preferred an appeal beforethe Commissioner of Income Tax (Appeals)-IX, Chennai (“CIT(A)”for brevity). 5.The CIT(A) once again re-appreciated the factual positionand agreed with the Assessing Officer, as the assessee had notfurnished any evidence regarding the claim made by them. TheCIT(A) also noted that the assessee failed to furnish the nameand address of the Sundry Debtors, so that the Assessing Officercould verify. He also found from the Assessment Order that theapproach of the Assessing Officer was reasonable and despitegranting sufficient time, the assessee was unable to satisfy theDepartment by producing necessary documents. Resultantly, theappeal filed was dismissed by the CIT(A) by order dated03.07.2008. Aggrieved by such order, the assessee preferred anappeal to the Tribunal. 5.The CIT(A) once again re-appreciated the factual positionand agreed with the Assessing Officer, as the assessee had notfurnished any evidence regarding the claim made by them. TheCIT(A) also noted that the assessee failed to furnish the nameand address of the Sundry Debtors, so that the Assessing Officercould verify. He also found from the Assessment Order that theapproach of the Assessing Officer was reasonable and despitegranting sufficient time, the assessee was unable to satisfy theDepartment by producing necessary documents. Resultantly, theappeal filed was dismissed by the CIT(A) by order dated03.07.2008. Aggrieved by such order, the assessee preferred anappeal to the Tribunal. 6.The Tribunal, in our considered view, had considered thefactual matrix and taken note of all the grounds urged by theassessee and concurred with the factual findings recorded by theAssessing Officer as well as the CIT(A) that the assessee couldnot furnish any details regarding the payments received from theSundry Debtors and that even their names could not be furnished,and that apart, the Tribunal has recorded that the assessee hadadmitted that income details are available with the assessee andin the absence of any details, the Tribunal rightly held that itis impossible to believe the theory that the assessee hadreceived the payments from its old Sundry Debtors after a gap oftwo to three years, and accordingly, the appeal was dismissed. 7.Thus, we find that the entire factual matrix has beenanalyzed by the two authorities and the Tribunal, and on accountof the inability of the assessee to furnish the details calledfor, no relief was granted to the assessee. The position hasnot improved in any manner before us and the assessee is in thesame state of affairs. Therefore, we find there is no questionof law much less substantial question of law for considerationin this appeal. Therefore, the Tax Case Appeal is dismissed.No costs. s/d- Assistant Registrar(CS VI) True Copy mkn Sub-Assistant Registrar To 1.The Income Tax Appellate Tribunal, Chennai, “D” Bench. Chennai, “D” Bench. 2.The Commissioner of Income Tax-VIII, Chennai. 3. Commissioner of Income Tax (APPEALS) IX Chennai -34 4. Income Tax Officer, Ward VIII (4), Chennai -6 +1cc to Mr. M.Swaminathan, Advocate, SR.No.38935 T.C.A. No.301 of 2010 PM(CO)PM(03/09/2021)