Shweta Construction P. Ltd.,201, City Centre, Jaipur v. Commissioner Of Income Tax, Jaipur, Income Tax Office Centerrevenue Building Jaipur

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR. DB INCOME TAX APPEAL NO.186/2002 Shweta Construction P. Ltd.,201, City Centre, Jaipur. Versus Commissioner of Income Tax, Jaipur, Income Tax Office CenterRevenue Building Jaipur. DATE OF ORDER ::: 06.12.2016. HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE DINESH MEHTA Mr. Prakul Khurana, for the appellant.Mr. Anuroop Singhi, for the respondent . 1.By way of this appeal, the assessee has challenged thejudgment and order of the Tribunal whereby the Tribunal hasdismissed the appeal preferred by the department and partlyallowed the appeal of the assessee. 2.This Court while admitting the appeal on 07.02.2003framed the following substantial questions of law: “1.Whether the facts and circumstances ofthe case, the grounds mentioned byassessing officer for reopening the presentcase u/s. 147 read with Section 148 of theAct, could be construed as the 'reasons tobelieve' as envisaged in section 147 of theAct?” 3.The brief facts of the case are that the return in the caseof assessee company was filed on 31.12.1993 declaring incomeof Rs.2,70,719/-. Along with the return, audit report dated 30.09.1993 as per requirement of Section 44AB has also beenfurnished. The return was processed u/s.143(1)(a) on28.03.1994. Subsequently in the course of assessmentproceedings for the assessment year 94-95 it was found thatassessee had shown payment to Sh. Nand Kishore, brother ofSh. D.K. Choudhary, Director, on account of hire charges ofvehicle claimedly taken by the assessee from the said saidperson. On inquiries it was gathered that in fact Sh. NandKishore did not own any truck/tractor and had never worked orrendered services to assessee company. The above positionemerged on inquiry by the Inspector of the circle from Sh. NandKishire. He also denied of having any deposit with the companyor any money was paid by or due to him from the assessee.Although an affidavit of Sh. Nand Kishore was subsequentlyfiled by the assessee but he was not produced before the A.Ofor examination despite specific requisition in this regard. It wasalso noted that in many other cases, the claimed payments ofhire charges were bogus as the persons shown as recipients ofsuch payments had no vehicles to give on hire for assessee'sbusiness. In view of the above, the claim of the assessee withregard to payment of hire charges to Sh. Nand Kishore andothers was not accepted and for the above bogus claim andother defects in accounts profit was determined by applying netprofit rate rejecting book version. Claim of interest payment toSh. Nand Kishore was also disallowed. In the period relevant toA.Y. 93-94 also the assessee claimed payment of hire charges at Rs. 73,500 to Sh. Nand Kishore from May, 1992 toSeptember, 1992 his account was further credited by Rs.47,000 on account of hire charges payable from September, 92to March, 93. For the reasons given above the claim ofpayment of hire charges to the above person was not genuinein this year also and therefore there was a case ofescapement/under assessment of income and accordinglyreassessment proceedings u/s 147 were initiated by issuingnotice u/s 148 on 4.12.97. 4.Counsel for the appellant contended that the order passedby the Tribunal is contrary to record and the order ofreassessment passed under Section 147 & 148, is void andwithout jurisdiction as no reasons were existing for making outthe case against the assessee, justifying initiation ofreassessment proceedings. 5.Counsel for the appellant during the hearing has producedon record, the additional paper book wherein he has producedthe copy of the order of assessment 1993-94 and copy ofAnnexure-III. On going through Annexure-III, the details areshown as under: 4 4.Counsel for the appellant contended that the order passedby the Tribunal is contrary to record and the order ofreassessment passed under Section 147 & 148, is void andwithout jurisdiction as no reasons were existing for making outthe case against the assessee, justifying initiation ofreassessment proceedings. 5.Counsel for the appellant during the hearing has producedon record, the additional paper book wherein he has producedthe copy of the order of assessment 1993-94 and copy ofAnnexure-III. On going through Annexure-III, the details areshown as under: 4 6.By reading the above document which was the basis forreopening of the assessment, he contended that case underSection 147 & 148 was not made out. He has also referred to the reasons recorded on 7.11.1997 which read as under:- “7/11/97As per findings given in theAssessment order for AY 94-95 the payment ofinterest in the name of Sh. Naval Kishore is notallowable. Similarly investments in the purchaseof vehicle is benami names in to be considered.The perusal of return of income shows paymentof interest of Rs. 73,500/- in the name of Shri.Naval Kishore which requires to be disallowed.Income to this effect apparently standsconcealed and escaped assessment. Thereforeto bring to tax this income and to examine otherrelated matters, Issue notice u/s 148.” 7.Counsel for the department has supported the order of the Tribunal and has contended that a definite case was made outfor reassessment. Counsel for the respondent has relied upon the decision of the Supreme Court in case of AssistantCommissioner of Income Tax vs. Rajesh Jhaveri StockBrokers (P.) Ltd. (2007) 291 ITR 500 (SC). 8.We have heard Mr. Prakul Khurana and Mr. AnuroopSinghi. 9.From the Annexure-III, details which are given were self-explanatory. The assessee has furnished/ recorded misleadinginformation inasmuch as in column No.3, Serial No. 5, 6 and 7as against the relation, he had written nature of payment andagainst the column No.7 relating to nature of payment i.e.interest; he has mentioned the amount. The details therein arefishy and gives rise to suspicion falsifying issuance of noticeunder Section 147/148. 10.In that view of the matter, we are of the opinion that theview taken by the Tribunal is just and proper. No interference iscalled for. The issue is required to be answered in favour of thedepartment and against the assessee. The appeal is dismissed. (DINESH MEHTA), J. (K.S. JHAVERI), J. BM Gandhi04