Gujarat High Court
Commissioner Of Income Tax vs Prafulbhai @ Rohitbhai J on 20 March, 2013
Author: Akil Kureshi
Bench: Akil Kureshi
COMMISSIONER OF INCOME TAX....Appellant(s)V/SPRAFULBHAI @ ROHITBHAI J SHAH....Opponent(s) O/TAXAP/60/2013 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 60 of 2013 ================================================================ COMMISSIONER OF INCOME TAX....Appellant(s) Versus PRAFULBHAI @ ROHITBHAI J SHAH....Opponent(s) ================================================================ Appearance: MR MANAV A MEHTA, ADVOCATE for the Appellant(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MS JUSTICE SONIA GOKANI Date : 20/03/2013 ORAL ORDER
(PER : HONOURABLE MS JUSTICE SONIA GOKANI) Challenging the judgment of the Income Tax Appellate Tribunal (hereinafter referred to as the Tribunal ) dated June 15, 2012, present Tax Appeal is preferred under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as the Act ), proposing following substantial questions of law :
A. Whether in the facts and circumstances of the case and in law the Hon'ble ITAT is justified in deleting the addition of Rs.10,73,550/- being made by the A.O. on account of undisclosed investment in jewellery ?
B. Whether in the facts and circumstances of the case and in law the Hon'ble ITAT is justified in deleting the addition of Rs.91,17,075/- being made by the A.O. on account of interest calculated on cash loans ?
C. Whether in the facts and circumstances of the case and in law the Hon'ble ITAT is justified in deleting the addition made on account of undisclosed interest income without considering the evidence on record ?
We have heard the learned counsel Mr.Manav Mehta for the Revenue. The first question concerns deletion of addition of Rs.10,73,550/- made by the Assessing Officer on the ground of undisclosed income in jewellery. When challenged before the CIT (Appeals), it deleted the entire amount by elaborate discussion of the issue. It was during the course of the search that such jewellery has been found at the residence of the assessee. The statements of different family members were recorded. The confirmation/ affidavit of the father, mother, wife of the assessee claiming jewellery were also recorded. In such background, the CIT (Appeals) noted that the jewellery belonged to different family members and it also relied on a circular of the CBDT, which permitted customary owning of such jewellery by the ladies. Resultantly, it deleted the entire amount.
When challenged before the Tribunal, it concurred with the findings of the CIT (Appeals) by briefly holding that out of the total disclosure made for the block period by the assessee of Rs.2.76 crore, the remaining jewellery was covered by the Board s Circular and was already reflected in the books of accounts. We see no reason to entertain this issue as we are convinced by the reasonings given by the CIT (Appeals) at length and also the logic assigned by the Tribunal. In any case, this being predominantly the factual aspect and when has been considered appropriately by both the authorities, no entertainment is necessary.
As far as questions (B) and (C) are concerned, the same are pursuant to deletion of Rs.91,17,075/- made by the Assessing Officer on account of interest calculated on the cash loans. During the course of search, certain documents and loose papers were seized and the assessee had made disclosure of huge amount of cash loans given by different persons. Interest on such an amount was added by the Assessing Officer to the income of the assessee. Therefore, the assessee challenged the same before the CIT (Appeals) raising the ground that the addition cannot be sustained when cash loans were deleted. The CIT (Appeals) upheld the say and found no justification in addition on account of interest on such cash loans which was not sustained. The CIT (Appeals) has noted thus :
7.
So far as interest on cash loan is concerned, as the addition on account of cash loans is added, there is no justification for addition on account of interest on such cash loans. However, I observe that the appellant has itself accepted cash loans of Rs.1,41,10,541/- by way of disclosure in the present year and hence the A.O. should recalculate the interest on such cash loans and make addition to that extent. Accordingly the addition made at Rs.91,17,075/- made will be modified by him. With this remarks this ground of appeal is partly allowed.
When the Revenue challenged the same before the Tribunal, it on discussion of the findings of the CIT (Appeals) deleted entire sum and interest. This issue again is based on the factual matrix presented before both the authorities as could be noted from the discussion made by these authorities. When the amount of cash loans itself had been deleted, the issue of making addition by way of interest on such question would not arise. Moreover, the Tribunal also regarded absence of any material worth the name to indicate any proof of charge of interest on cash loans and hence, the Tribunal committed no error at all in dealing with the issue in question. No question of law, thus, arises. The Tax Appeal is, accordingly, dismissed.
(AKIL KURESHI, J.) (MS SONIA GOKANI, J.) Aakar Page 4 of 4