Shri Sanwarmal Bajaj v. The Income Tax Officer Ward I, Jhunjhunju

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 348 / 2005 Shri Sanwarmal Bajaj Prop. of M/s Pawan Cloth Store, SinghanaDistrict Jhunjhunu in the State of Rajasthan ----Assessee-Appellant Versus The Income Tax Officer Ward I, Jhunjhunju Having its office atIncome Tax Office in the State of Rajasthan ----Respondent _____________________________________________________ For Appellant(s) : Mr.Siddharth Ranka For Respondent(s) : Mr.R.B. Mathur _____________________________________________________ HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE MAHENDRA MAHESHWARIJUDGMENT 21/03/2017 1.By way of this appeal, the appellant-assessee hasassailed the judgment and order of the Tribunal whereby theTribunal has partly allowed the appeal preferred by the assessee.2.Counsel for the appellant has contended that on04/01/2006, this Court while admitting the matter has framed thefollowing questions:- “1. Whether on the facts and in the circumstances of thecase, the ld. Income Tax Appellate Tribunal was right inlaw in sustaining trading addition of Rs.1,50,000/- overand above Rs.1 lac surrendered during the course ofsurvey particularly in view of the fact that in thecomparable case relied upon the entire addition wasdeleted by the ld. Income Tax Appellate Tribunal, thefinding to sustain the addition is perverse?case, the ld. Income Tax Appellate Tribunal was right inlaw in sustaining trading addition of Rs.1,50,000/- overand above Rs.1 lac surrendered during the course ofsurvey particularly in view of the fact that in thecomparable case relied upon the entire addition wasdeleted by the ld. Income Tax Appellate Tribunal, thefinding to sustain the addition is perverse? “2. Whether on the facts and in the circumstances of thecase the ld. Income Tax Appellate Tribunal was right inlaw in sustaining the cash credit of Rs.50,000/- in theaccount of Shri Santosh Kumar Jindal when he is anexisting assessee and the amount was received byaccount payee cheque and identity, capacity andgenuineness of the transaction was proved?” 3.Counsel for the appellant submits that the survey was carried on 28/01/1997 and the Tribunal has taken the view in I.T.A. No.132/JP/2002 filed by Ram Sharan, as follows:- “. . . . . . . . . .Therefore, by following the ratio laid downby the Jurisdictional High Court, we find no justificationfor making trading addition. Thus, both the orders of thelower authorities are hereby set aside and delete theaddition of Rs. 2,00,252/-. The assessee will get therelief of this amount. This ground is allowed in favour ofthe assessee.” 4.On the contrary, the appeal preferred by the assessee was dismissed and he was not granted the same relief as wasgranted by the Tribunal to Ram Sharan whose annual profithowever was shown as 14% and in view of the statement givenin paragraph 5 of the memo of appeal, the average G.P. of thepresent assessee for the assessment year 1993-94 was shown as13% and for the relevant order, it is 10%. In that view of thematter, the view taken by the Tribunal on Issue No.1 should bere-considered. 5.On Issue No.2, it is contended that the Tribunal whileconsidering the case of the present appellant, has observed asfollows:- “18. We heard both the parties at length and gonethrough the material available on record from which itappears that Smt. Baby Agarwal is a house wife and shewas having some income as per the balance sheet. In theinstant case, it was alleged that payment was withdrawn 5.On Issue No.2, it is contended that the Tribunal whileconsidering the case of the present appellant, has observed asfollows:- “18. We heard both the parties at length and gonethrough the material available on record from which itappears that Smt. Baby Agarwal is a house wife and shewas having some income as per the balance sheet. In theinstant case, it was alleged that payment was withdrawn by her of Rs. 50,000/- from other creditors and wasdeposited in her bank account against which the chequewas issued. In the instant case, the identity is proved.The transaction was made through account payeecheque. She is the married lady and was having the giftson many occasions and might be possessing theStridhan. In these circumstances and by looking theamount involved and other circumstances, we accept hercreditworthiness. So, we set aside both the orders of thelower authorities and delete the addition of Rs. 50,000/-pertaining to Baby Agarwal. However, regarding ShriSantosh Kumar Agarwal, it appears that he was workingas mechanic and doing the repairing work of Fans,Coolers etc. He is just Class Xth pass and he was workingearlier at the monthly salary of Rs. 1,200/-. In the past,he has also purchased a shop. He has a family of threemembers. In these circumstances, we fully agree withthe orders of the lower authorities that he was not havingthe means to credit the amount of Rs. 50,000/-. He hasnot paid any single pai to government exchequer. Inthese circumstances, without repeating, we uphold theorders of lower authorities and sustain the addition of Rs.50,000/-. Thus Ground No.5 is partly allowed as statedabove.” 6.Similar was the case of Smt.Baby Agarwal whoseRs.50,000/- addition was set-aside by the Tribunal but in thecase of the present appellant, Rs.50,000/- addition was not set-aside. The Tribunal held that in the case of the present appellant,the G.P. Rate would be @24% however in the case of others, theTribunal has considered the GP Rate @14%. 7.The average profit has been shown in the presentcase to be 11.4% and in that view of the matter, we are makinga departure from the view taken by the Tribunal that instead ofGP Rate @10% as considered in the case of Ram Sharan holdingthat instead of GP Rate @24%, it shall be @11.4% in the presentcase. However, rest of the directions of the Tribunal wouldremain intact. 8.In view of the above, while Issue No.1 is partiallyallowed in favour of the assessee, Issue No.2 is completelyanswered in favour of the assessee and against the department. 9.The appeal stands disposed of accordingly. (MAHENDRA MAHESHWARI)J. (K.S. JHAVERI)ACTING C.J. Anil Goyal-PS/18