The Commissioner Of Income Tax - Central Circle, Pune v. Kirti Chandulal Oswal

IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. INCOME TAX APPEAL NO.2166 OF 2009 The Commissioner of Income Tax -Central Circle, Pune Vs.Kirti Chandulal Oswal .... Mr. Vimal Gupta for the Appellant.Mr. S.N. Inamdar for the Respondent. .... ..Appellant. ..Respondent. CORAM:DR. D.Y. CHANDRACHUD, & J.P.DEVADHAR, JJ. 4th January, 2010. P.C.: 1.The following questions of law have been framed in the appeal by the Revenue against the judgment of the Income Tax Appellate Tribunal dated 3[rd] October, 2008 :- (A)"Whether on the facts and circumstances of the case, the Hon'ble ITAT was right in holding that evidence found as a result of search in a connected case cannot be considered while computing the undisclosed income u/s 158 BB; (B)Whether on the facts and circumstances of the case, the Hon'ble ITAT was right in law in holding that for computing the undisclosed income u/s 158BB only the evidence found as a result of search in the assessee's own premises be considered. (C)Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in utilizing and discarding the evidence gathered by the Assessing Officer and found as a result of search at will and its own convenience. (D)Whether on the facts and in the circumstances of the case and in law, the order of the ITAT is perverse inasmuch as it has based its order on the basis of convenience and had ignored the vital evidence without assigning any reasons for the same." 2.The assessee was engaged in the business of trading in jewellery and a search was conducted of the business and residential premises on 24[th] October, 2002. In response to a notice under Section 158 BC the assessee filed a return declaring his undisclosed income to be nil. In the course of the assessment proceeding the assessing officer found that certain documents had been recovered during the course of a search carried out at the premises of one Prakash Salunkhe and the documents were owned by M/s. Ranka Jewellers, Pune. These papers showed a ledger account of a person by the name of Kirti. According to the account, Ranka Jewellers had made purchases from Kirti for which cash payments were made. Copies of the accounts pertaining to Assessment Years 2001-02, 2002-03 and 2003-04 were furnished to the assessee. The assessee denied any relation to those transactions. In response to a notice, Ranka Jewellers submitted that the seized papers have no evidenciary value. Ranka Jewellers claimed that the papers were in the handwriting of an accountant who was no longer in service. However, by a letter dated 27[th] October, 2004 the address of the person by the name of Kirti was disclosed. The assessee denied that it had any relation with the aforesaid person. 3.The Tribunal has entered a finding of fact in paragraph 12 of its judgment that the material which was seized from the premises of Mr. Prakash Salunkhe consisting of the ledger accounts in the books of Ranka Jewellers did not establish any nexus with the assessee. The documents which were seized only referred to a person by the name of Kirti. The Tribunal held that this by itself would not lead to the inference that it was the account of the assessee which was 3.The Tribunal has entered a finding of fact in paragraph 12 of its judgment that the material which was seized from the premises of Mr. Prakash Salunkhe consisting of the ledger accounts in the books of Ranka Jewellers did not establish any nexus with the assessee. The documents which were seized only referred to a person by the name of Kirti. The Tribunal held that this by itself would not lead to the inference that it was the account of the assessee which was reflected in the documents which were seized. The Tribunal has considered the evidence on the record and has come to the conclusion that there was no specific material to link the assessee to the person by the name of Kirti whose name was reflected in the documents which were seized during the course of the search. This is a pure finding of fact which has been rendered by the Tribunal. Consequently, it is not necessary for this Court to adjudicate upon the questions of law which are framed, as noted earlier, since in any event even on the assumption that the material which was seized could be looked at, it is evident that there was no basis to co-relate the assessee with the name of the person in the documents which had been seized. Having regard to the finding of fact which has been recorded by the Tribunal, therefore, it is not necessary for the Court to adjudicate upon the questions of law which are kept open to be decided in appropriate proceedings. The Appeal is dismissed. (DR.D.Y.CHANDRACHUD, J.) (J.P.DEVADHAR, J.)