Txa/8/2023 Of The Principal Commissioner Of Income Tax v. Timblo Private Limited

Andreza IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO. 08 OF 2023 The Principal Commissioner of Income Tax,... Appellant Central Circle, Panaji, Goa. V e r s u s M/s. Timblo Private Limited, Kadar Manzil,near Hari Mandir, Margao-Goa 403 601PAN : AABCT 1944 N ... Respondents Ms. Amiri Razaq, Standing Counsel for the Appellant. Mr. H. D. Naik, Advocatefor Respondents. CORAM:M. S. KARNIK & VALMIKI MENEZES, JJ.19[th] June, 2024 DATE: ORDER(Per M. S. Karnik, J.) 1.The revenue is in appeal against the Judgment of the Income TaxAppellate Tribunal ('Tribunal', for short) dated 13.05.2012, raising thefollowing questions of law for our consideration : “(i) Whether on the facts and circumstances of thecase and in law, the Hon'ble ITAT erred in deletingthe addition of Rs.2,28,54,314/- made on account ofunexplained expenditure despite the said entryappearing in seized diary during the course of searchaction under Section 132 of the IT Act 1961 on21.4.2010 and the assessee was not able to correlate 19[th] June 2024 its claim that the amount of Rs.2,28,54,314/- is out ofincome disclosed in earlier years. (ii) Whether on the facts and circumstances of thecase and in law, the Hon'ble ITAT erred in deletingthe addition of Rs. 2,00,00,000/- made on account oflegal expenses despite the said entry appearing inseized diary during the course of search action underSection 132 of the IT Act 1961 on 21.4.2010. (iii) Whether on the facts and circumstances of thecase and in law, the Hon'ble ITAT erred in acceptingthe assesses' version that the entries in the diary areactual expenditure incurred and some entries in thediary are mere estimation.” 2. Ms. Razaq appearing for the revenue while assailing the Order ofthe Tribunal invited our attention to the facts. It is pointed out that asearch and seizure action under Section 132 of the IT Act, 1961, ('Act',for short), was carried out in the case of the Assessee on 21.04.2010.Notice under Section 153A of the Income Act, 1961 dated 04.08.2010was issued and served on the Assessee calling for return of income forthe aforesaid Assessment year. The Assessee filed Return of Income on30.09.2010 declaring total income of Rs.54,51,02.479/-. The assesseefiled revised return of income on 13.12.2012 declaring total income ofRs.53,88,63.191/-. The Assessing Officer was of the opinion that thereturn filed on 13.12.2012 is not a valid one since as per the provisionsof Section 139(5), a revised return can be filed at any time before the 19[th] June 2024 expiry of one year from the end of the relevant Assessment year orbefore the completion of the assessment whichever is earlier and, assuch, before 31.03.2012 for the relevant Assessment year. As such, therevised return was treated as non est and the assessment wascompleted based on the return filed on 30.09.2010. The AssessingOfficer completed the search assessment under Section 153A on31.12.2012 determining the total income of the assessee atRs. 58,79,56,793/- for the Assessment Year 2010-11 inter alia makingadditions under two heads viz. unexplained expenditure ofRs.2,28,54,314/- and Rs. 2,00,00,000/-, the first representing generalexpenses and the second representing legal expenses. The Assessmentyear relevant for the purpose herein is Assessment Year 2010-11. 3.Assailing the common Order passed by the Tribunal dismissingthe Appeal filed by the revenue as well as the Cross Appeal of theAssessee, the learned Counsel for the Appellant urged that theimpugned Order is contrary to the provisions of the Act and is againstthe well settled interpretation of the relevant cited provisions. It isurged that the substantial questions of law set out herein above ariseout of the Order of the Tribunal. Our attention is invited to the findingsrecorded by the CIT(A) and the Tribunal. Such findings are assailed onthe ground that the same are perverse. 19[th] June 2024 3.Assailing the common Order passed by the Tribunal dismissingthe Appeal filed by the revenue as well as the Cross Appeal of theAssessee, the learned Counsel for the Appellant urged that theimpugned Order is contrary to the provisions of the Act and is againstthe well settled interpretation of the relevant cited provisions. It isurged that the substantial questions of law set out herein above ariseout of the Order of the Tribunal. Our attention is invited to the findingsrecorded by the CIT(A) and the Tribunal. Such findings are assailed onthe ground that the same are perverse. 19[th] June 2024 4.Shri Naik, learned Counsel for the Respondents submitted thatthe findings recorded are findings of facts which cannot be said to beperverse. 5.We have gone through the findings of the Tribunal as well asCIT(A). The Tribunal has re-produced the relevant observations andthe findings of the CIT(A) in the impugned Order. So far as the groundraised by the Assessee as regards addition to the amount ofRs.2,25,54,314/- is concerned, the Tribunal has tendered a finding offact on the basis of the materials. It held that group companies havingoffered income on account of unexplained expenditure for theAssessment Year 2007-08 in their respective hands totallingRs.2,28,54,314/-, can be considered as an explanation and coupledwith the fact that the department has not disproved the contention ofthe assessee company with any corroborative evidence. The Tribunalfurther observed a well reasoned Order is passed by the CIT(A). TheTribunal has further recorded that the assessee company in support ofits stand has in fact filed an affidavit, the contents of which affidavit hasnot been disproved by the Assessing Officer and no further inquiryappears to have been carried out by the Assessing Officer. The Tribunalobserved that the Assessing Officer has arrived at a belief that thecontents in the said seized diary are pertaining to the instant 19[th] June 2024 Assessment Year 2010-11 only on the basis of presumption. We do notfind any perversity in such a finding. 6.Further as regards to the addition of Rs. 2 Crore relating to legalexpenses made by the Assessing Officer, the Tribunal based on thematerials on record, arrived at a conclusion that it is not discernablewhether the Assessee has actually paid the said amount towards thelegal expenses as no date is mentioned nor any other information canbe gathered to say that the said amount of Rs. 2 Crore has beenincurred towards legal expenses by the assessee company and nocorroborative evidences have been brought on record by the AssessingOfficer. It is further observed that the assessee company has to thiseffect, filed an affidavit itself, which cannot be brushed aside since theaverments made in the duly sworn affidavit has not been disproved bythe Assessing Officer during the course of assessment proceeding orbefore the CIT(A) or before the Tribunal. We find that the CIT(A) andthe Tribunal has recorded findings of fact based on the materials whichcannot be said to be perverse. The view is a possible one. Thus, theCIT(A) and the Tribunal have concurrently come to the conclusion thatthe materials on record does not justify such additions of the AssessingOfficer. 19[th] June 2024 7.No question of law arises. Hence, the Tax Appeal is dismissed.No costs. VALMIKI MENEZES, J. M. S. KARNIK, J. Signed by: ANDREZA RODRIGUES EPEREIRADesignation: Private SecretaryDate: 26/06/2024 14:12:09 Page 6 of 6 19[th] June 2024