Vanasthali Marg, Jaipur v. The Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR D.B.INCOME TAX APPEAL NO. 100 / 2005 M/s Gyarsi Lal Gupta & Sons, Prop. of Hotel Goyal Vanasthali Marg, jaipur. ----Appellant Versus 1. The Commissioner of Income Tax, Jaipur. 2. Income-Tax Officer, Ward No.3(3) Jaipur. ----Respondent Connected With D.B.INCOME TAX APPEAL No. 30 / 2005 M/s Gyarsi Lal Gupta & Sons, Prop. of Hotel GoyalVanasthali Marg, jaipur. Versus 1. The Commissioner of Income Tax, Jaipur.2. Income-Tax Officer, Ward No.3(3) Jaipur.----Respondent ----Appellant __________________________________________ For Appellant : Mr. P.K. Kasliwal For Respondent : Mr. Anuroop Singhi __________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE DINESH MEHTA Per Hon’ble Jhaveri, J. 06/12/2016 Judgment 1. By way of this appeal, the assessee has challengedthe judgment and order of the Tribunal whereby the Tribunalhas dismissed both the appeals filed by the assessee as well asthe department and confirmed the order of the CIT (Appeals). 2.The facts of the case are that the assessee had filedits return of income on 16.10.1996 showing net loss ofRs.29840/-. The return of income was accompanied bycomputation of total income. The return was processed undersection 143(1)(a) of the Act on 20.12.1996. Thereafter, onpossession of information that the assessee had concealed itsincome proceedings under section 147 were initiated and anotice under section 148 was issued on 22.05.2001 to reassessthe assessee’s income, which was issued after receiving priorapproval of Additional CIT. Since the assessee failed to complywith notice under section 148, a notice u/s 142(1) was sent tohim on 26.07.2001 wherein the assessee was required toproduce information on various points and also to produce allthe books of account with complete bills and vouchers on06.08.2001. As no compliance to this notice was made, a noticeunder section 142(1) was issued on 07.09.2001. This noticewas served upon the assessee on 24.08.2001 but on the dateof hearing an adjournment application was received and thecase was adjourned to 12.09.2001 but again there was nocompliance. A fresh notice under section 142(1) dated (3 of 5 ) 13.01.2003 was served on the assessee on 16.01.2003 to makecompliance with the earlier requirements on 28.01.2003. Butagain adjournment was sought. It may be added that on noneof the dates the assessee produced books of accounts, bills andvouchers though he was specifically asked to do so. Theassessee was asked to furnish the information as already calledfor vide notice under section 142(1) dated 19.07.2001 and alsoto furnish the information on the points in this letter and also toproduce books of accounts, bank pass books, bills and voucherson 14.02.2003. The assessee filed return on 13.02.2003showing loss of Rs.29840/-. Along with this return he has filedincome and expenditure account wherein he has claimedinterest to RFC for Rs. 1275500/- as against Rs.1375500/-claimed in the original return of income and has claimeddepreciation of Rs.109840/- whereas in the original return itwas Rs.9840/- only. In the reply it has been stated by theassessee that regular books of accounts, bills and vouchershave been maintained. On 26.02.2003 the assessee was againasked to furnish complete reply to the questionnaire andproduce books of accounts on 28.02.2003. Since the assesseewas avoiding to produce the books of accounts, bills andvouchers, though specifically asked for, one more opportunitywas given to him by issuing notice under Section 142(1) on07.03.2003 for compliance on 12.03.2003. On the one hand theassessee has prepared information regarding income andexpenditure heads like salary, electricity, advertisement,telephone, room rent etc. and on the other hand saying that the books of accounts have been misplaced. 3.This court, on 28.10.2005, while admitting the appeal, framed following substantial questions of law: “1. Whether the Tribunal was justified inupholding the validity of re-assessmentmade by the A.O. u/s 147/148 of the I.T.Act 1961 irrespective of the fact that powerexercised by the A.O. U/s 133(6) of the Actby making enquiry from the R.F.C. andwhich forms the basis for re-assessmentfound to be not in accordance with law bythe tribunal? 2. Whether the Tribunal was correct inconfirming the disallowance of additionaldepreciation claimed through returns filedin response to notice u/s 148 of the Actwithout considering the fact that claim ofdepreciation in original return was onlyrestricted and the profits available with theassessee were not sufficient enough tocover the higher claim?confirming the disallowance of additionaldepreciation claimed through returns filedin response to notice u/s 148 of the Actwithout considering the fact that claim ofdepreciation in original return was onlyrestricted and the profits available with theassessee were not sufficient enough tocover the higher claim? 3. Whether on the facts and in thecircumstances of the case, the Tribunal wasjustified upholding that interest charged bythe A.O. U/s 234/A/B/C, is legally correctand sustainable?circumstances of the case, the Tribunal wasjustified upholding that interest charged bythe A.O. U/s 234/A/B/C, is legally correctand sustainable? 4.In view of the fact that the assessee has alreadypaid the tax and in view of the fact that the assessee has filedrevised return, the question no.1 is only acadamic and we arenot required to answer the same. 5.On issue no.2, we are of the opinion that in view ofthe notice under Section 148 of the Income Tax Act, theassessee has not filed revised return and stuck to the earlierreturn filed by him and, therefore, we are of the opinion thatfurther depreciation claimed more than what was claimed isnogt permissible. In that view of the matter, the depreciation cannot be allowed without filing of revised return. In that viewof the matter, the issue no.2 is answered in favour of thedepartment and against the assessee. On issue no.3, as the issue no.2 has been answeredin favour of the department and against the assessee and inview of the fact that issue no.3 is consequential to issue no.2,therefore, we answer this issue in favour of the department andagainst the assessee. The appeal stands disposed of accordingly. A copy of this order be placed in each of the file. (DINESH MEHTA)J. (K.S. JHAVERI)J. bblm