Bombay High Court
Pr. Commissioner Of Income Tax, ... vs Harsh Jain on 5 February, 2019
Bench: Akil Kureshi, M.S.Sanklecha
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO.1438 OF 2016
The Pr. Commissioner of Income Tax, Central-3 .. Appellant.
v/s.
Shri Harsh Jain .. Respondent.
Mr. Suresh Kumar, for the Appellant.
Mr. R. Murlidhar i/b. Mr. A. K. Jasani, for the Respondent.
CORAM: AKIL KURESHI &
M.S.SANKLECHA, JJ.
DATE : 5th FEBRUARY, 2019.
P.C:-
This Appeal is filed by the Revenue, challenging the Judgment of the Income Tax Appellate Tribunal (in short "the Tribunal"). Following questions were pressed at the time of arguments:-
"(a) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in not adjudicating the ground of appeal no.4 of the assessee before the Tribunal, relating to the evidence in the form of jottings by Mr.Subodh Agarwal and Mr. Virendra Jain, which independently confirm unaccounted cash transactions found from the possession of, evidenced from the seized paper, also admitted in statements u/s.
132(4) of the I T Act, 1961 and further proved by co-relating the materials seized/ impounded from different places/ persons, with the books of account seized and impounded?
(b) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that the rateable value of the properties as determined by the Municipal S.R.JOSHI 1 of 4 ::: Uploaded on - 08/02/2019 ::: Downloaded on - 16/03/2019 03:33:06 ::: itxa-1438-2016.odt Authorities is the yardstick ignoring that Section 23(109a) mandates annual value to be deemed as the sum for which the property might reasonably be expected to let from year to year?"
2 Question (a) arises out of addition made by the Assessing Officer in the hands of the Respondent-Assessee towards un-explained expenditure by invoking Section 69C of the Income Tax Act, 1961 (for short "the Act").
3 Brief facts are that, the search and seizure action was carried out in case of one Jai Corporation Group and its employees. During such search, various documents relating to purchase of land by Group concerns of Jai Corporation were seized. These documents related to several individuals including the present Respondent-Assesssee. On the basis of such documents and e-mail correspondence, the Assessing Officer made additions of sum of Rs.2.46 Crores (rounded of) as unaccounted cash payments made by the assessee in course of land deed.
4 The Commissioner of Income Tax (Appeals) [for short "CIT(A)"], confirmed the order of Assessing Officer, upon which, assessee filed further appeal before the Tribunal. The Tribunal by the impugned judgment, deleted the additions essentially holding that the loose documents and other materials do not establish the factum of cash payment by the assessee. The Tribunal referred to such documents as also the contents of the e-mail relied upon by the Revenue. The Tribunal detected several inconsistencies in the Revenue's theory that these documents established the fact that, the assessee had made such payments.
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5 The learned Counsel for the Revenue contended that the
Tribunal has not properly examined the question and not given due waitage to the provisions of Section 292C of the Act, giving rise to presumption in law.
6 We, however, notice that the Tribunal has taken note of the contents of the e-mail and found that, the same do not show any evidence of cash payment and in fact, reference to the dates when such payments were allegedly made, would take the case of the assessee out of the current Assessment Year. The Tribunal further noted that the loose documents/papers were not found from the possession of the assessee, nor the same were singed by the assessee.
7 We, therefore, find that the entire issue is based on appreciation of facts on record. The Tribunal has assessed the evidence to come to the conclusion that, there was no evidence in possession of the Assessing Officer to make additions. Significantly, the Tribunal noticed several inconsistencies in the contents of the e-mail and found that the loose documents/papers were not found from the possession of the assessee, nor they were signed by the assessee and finally the purchaser of the land, was not examined by the Assessing Officer. We do not find any question of law arising.
8 Question (b) relates to the additions made by the Assessing Officer by reversing the rateable value of the property owned by the assessee which was vacant. While complying the taxability of deemed rental income in terms of Sections 22 and 23 of the Act, the Assessing Officer discarded the rateable value fixed by the Municipal Corporation for assessing the tax on such properties and substituted the same with S.R.JOSHI 3 of 4 ::: Uploaded on - 08/02/2019 ::: Downloaded on - 16/03/2019 03:33:06 ::: itxa-1438-2016.odt market rate as prevailing in the area, as estimated by him after collecting data with respect to the same. The Tribunal,however, deleted addition on the ground that in case of vacant property, the tax on rental income in terms of Section 23 of the Act can be calculated only on the basis of rateable value assessed by the Municipal Corporation.
9 We find that this view of the Tribunal is supported by decision of this Court by order dated 16 th April, 2018 passed in Income Tax Appeal No.1285 of 2015. The Court while dismissing the Revenue's appeal, relied on the decision of this Court in case of Smt. Smitaben N. Ambani v/s. Commissioner of Wealth Tax reported in 323 ITR 104. In such decision, this Court was considering a similar question in context of valuing the self occupied property, for the purpose of wealth tax of the assessee. The provisions for assessing the value of the property were similar to those applicable in case of assessee's annual rateable value in terms of Section 23 of the Act. This question is, therefore, not entertained.
10 In the result, Appeal dismissed.
(M.S.SANKLECHA,J.) (AKIL KURESHI,J.)
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