Shri Syed Iqbal Chisty v. Cit, Ajmer

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR. D.B. Income Tax appeal No.25/2005 Shri Syed Iqbal ChistyVs.CIT, Ajmer DATE OF JUDGMENT ::: 8.12.2016HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE DINESH MEHTA Mr. Priyesh Kasliwal for Mr. P.K. Kasliwal, for the appellant.Ms. Parinitoo Jain, for the respondent. BY THE COURT:- (Per Hon'ble Jhaveri, J.) 1.By way of this appeal, the appellant has challenged thejudgment and order of the trubunal whereby trubunal haspartly allowed the appeal of the assessee. 2.While admitting the appeal this court on 10.1.2006 had framed following substantial questions of law:- "Whether, the Tribunal was justified insustaining the addition of Rs.93,000/- u/s.68of the I.T. Act, 1961, irrespective of the factthat the appellant is not maintaining anybooks of account and source of income is onlyfrom Khadimgiri, such addition is legallysustainable ? Whether, addition u/s.68 of the I.T. Act, 1961,can be made, if the appellant is having nobusiness income and not maintaining books ofaccount and the Tribunal was further justifiedin sustaining the additon of Rs.93,000/-u/s.68 of the Act, irrespective of the fact thatappellant is having source of income fromKhadimgiri only?" 3.The brief facts of the case are that return of incomewas filed in this case on 18[th] September, 1998 in response to notice u/s 148 declaring total income at Rs.15,000/-.Notices u/s 143(2) alongwith a query letter was issued andserved upon the assessee, fixing the date of hearing on 20[th]November, 1998. However, instead of attending the office inperson and to produce necessary details/informationrequired for completing the assessment, the assesseesubmitted written reply at the Dak Counter on 19[th]November, 1998 through M/s O.P. Maheshwari & Co. C.As. 3.1In this case, action u/s. 147 was initiated by issue ofnotice u/s. 148 on 7.6.1996 requiring the assessee to filethe return of income and it explanin the source ofinvestment in purchase of house property No. 54/4 (42/63)Kamani Gate, Indercote, Ajmer. The assessee had purchasedground floor of the above house and the purchaseconsideration was shown at Rs.1,15,000/- plus expenses ofRs. 15,155/- incurred on stamp duty, etc. as per the copy ofRegistered Deed placed on file. As per the copy of Capitala/c and Balance Sheet as on 31.3.1989 furnished alongwiththe return of income, besides current years income fromKhadimpur at Rs. 15,000/-, the capital balance broughtforward has been shown at Rs.61,000/- and the receipt ofgift during the year has been shown at Rs.20,000/-. In theBalance Sheet, besides capital of Rs. 90,000/- sundrycreditors has been shown at Rs. 73,000/-. In his writtenreply filed on 19[th] November, 1998 as stated above, theassessee has stated that he has already been assessed for the A.Y. 1995-96 and that the return for 1995-96 has beenfiled in compliance with notice u/s. 142(1) which has alreadybeen accepted and that completed details and course ofinvestment in property have already been submitted. It isfurther stated that now at this stage it is not possible toproduce thereafter a lapse of 9 years or more. With regardto the genuineness of sundry creditors, it is stated that thegenuineness of Sundry Creditors is automatically provedfrom the payment made to them from time to time since1989 as shown in the Balance-Sheet as on 31.3.1995 whichreduced to Rs. 3,000/- only. It is further stated that as theincome is much below Rs. 50,000/-. He has not maintainedday-to-day accounts for such petty gifts received as nazranafrom pilgrims but used to visit Dargah Shariff for Ziyarat.With regard to the copy of Bank a/c. It is stated that he hasasked the Bank to issue duplicate passbook, as the originalis not traceable. 4.However, the addtion which was added by the AO u/s68 was not deleted. 4.However, the addtion which was added by the AO u/s68 was not deleted. 5.Counsel for the appellant Mr. Kasliwal contended thatwhen it was an admitted case of the department thatassessee did not maintain books of account, then invoking ofSection 68 is contrary. In the alternative it was contendedthat even if they wanted to invoke Section 69, no such orderwas passed. The CIT(A) has observed that Section 69 shouldhave been invoked. According to us the Appellate Authority could not improve the case of the Assessing Officer, in anappeal preferred by the assessee. The Tribunal hascommitted an error of law in not considering this aspect ofthe matter. 6.Counsel for the respondent contended that the viewtaken by the tribunal is just and proper. No interefence iscalled for. 7.We have heard counsel for the parties. 8.Taking into consideration the fact that books of accountis not maintained under Section 68 of the Act, the additionmade is contrary of law.is not maintained under Section 68 of the Act, the additionmade is contrary of law. 9.The issue is answered in favour of the assessee andagainst the Department.against the Department. 10.The appeal Stands allowed. (Dinesh Mehta), J. (K.S. Jhaveri), J. Brijesh