The Commissioner Of Income Tax vs Late Sri H R Basavaraj on 15 July, 2011

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Karnataka High Court

The Commissioner Of Income Tax vs Late Sri H R Basavaraj on 15 July, 2011

Bench: V.G.Sabhahit, Ravi Malimath

THE HESH C81??? 3?: %{.£i§?\is'1'aTﬁxE<§E E555" EAEEQAEQRE

 

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PRESENT Q %
THE HQNELE ME" EUSTICE V! G*_JS,!."=%,,£s»"?'iE;~*»ET';   «
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THE HONBLE MR.}usT:CE»'§A:g.I ;»4V,'é;E1:'%}«;,IxTs-;j "  
m\.Na, 30m GE'  "  
BETWEEN: V  'V 
E. The Commissio:2E:f_0f  
Kamataka (C§;>n::ja_i') _ _ " * " 
Central Re\,reﬁuue ﬁg;-:i_%::x';:i';.:;:_§  

Queens Road  .    
Eanga:o.r.E556.Q"':3~E:;_._   _}gE.APELLANT

(83,: Sri E.P\E§_::d--:~a %<iLi'%*;.:';;rj:,"SE2ié:§':%-.Ad$e::ate)
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LEEE Sri  ;§;.'Sa§avaEa;i V
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qeestiene ef iew eieted therein and eet eséde the eeeeééete ._
erders eateé 1934,2885 passed by the ETA'? 'B' Beneh,' 
Bangaiere in the respondent -assessee's case? in eppee~§._"~,_'~».V

preceedmgs Nos. IT(SS)A. 139;'Bang,z'2002 fer the E:.§»:>_:§<. *- Assessment years 1988-89 to 199899 and g:'ant_=;;ueh"~.i'j--..e other reiief' as deemed fit.

This ETA having been heard é'ed;"'reeer*ved' Eudgment, coming on for pron»oL_1ncem.erit. this..'1;d:ay; RAVIMALIMATH,,3deiivered the fol;ow--§ng:~ . ' ;_t;_B_eet~_4,e_.mf This appeaﬁ is by the by fhe erder of the Tr§bunaI4_*w}jere§ri' by the essessee were :§e'he_«'«Vai;;.;'§'ee;fefifed by the revenue were V<;1Eeemi'esec;f}1.;____ _, V 2% Late 55% V ié';;R,:B1aea;'€2_.eraj wee er: eseeesee. Seeéfeh ae;f._%eei2;:re wer"e écenéaseiee sneer the erevésieas ef ﬁeeiéee :;E..3_2 _e%'..%t--§*§e*~--En€e:ee Tex ee: at his reeieeetieé :.'v»vL§remieeeV'eeﬂ Véi2e':--._e€;;'e'§e eeseeéetee, ﬁe zhe eeerse ef the 7?;<;_ee*s:?}; reeeépeeg egreememts eee ethe: eeeemeeéte were {feizeegg ";e§e,_. eietereeei wee éeeereed es eseié as Q? eieer '*."ees:ee--e:ée%ﬁ eereeee. Eeréeg the eeuree ef {ﬁe S€§?{';§'E by fee Setter sated 4~3-1998 he efferes? e eesei eeeisciesed uh mcsree (:2? $1226 Creres, Thereafter a netiee under :58--BC was Essuee ts him; ﬁe filed the return sf 'V' fer the block series an 283931998 d§s«_:E,esi_hg undisclosed income of a sum of R5334:51;§;{'6®}'-f._'Du}'%r1§'W... the pemjehcy of the assessment phVm::eedi"h'gs he 6~§-1999 Aeeerdihgﬁy, the essesséhefsffieer dated 12211-1999 preposecisehs she grand-'sons as his Ieégef_.repre's'erﬁ::eEEv.e:s_._ vide ietter dated ee~4§:fé2.hsVVihhihﬁfermee the assessing demise of Sr'; I-i,R,Bas:e§.ra:'ajA,x,VV%V%~E.:e.:i:L"eh't§b.§e'~~~.. estate eassee en te ?°%»?4~3;F5E'3'%§E'y' 'hiss': WEEE end iessemensg ase::ere§:sg,.%§;§ she eswsevssieig eeieeriey erseeeeeé ts ee%e_eE.e:e--._Vth_Ve~«.Me.s:s'esse':ee: eeereseesee ey the Eegsi esgees:g:;xjss'ssmss, she eee ?ee'2§hg sees:

3. "'%"hs assessing authattty aftst aaaﬁaata §??$§"Eti§"'1§fiES at tiaaring as starisus dates aassas't'.._:*._ an assessment eras: an 3Q--i2~1§99 determining the_:ata'i~«'.V'_~;.'.,:E aticiisciased income in a sum of insiuded the admitted undisclosed $451,960/~, Aggtisvea by this-7 -.sams;.v_tiiaV a.sVs%essa_:a .

gstsfetreci an appeai before the Cam:i%ii'ssi'casr tfifia additions made in the course iaciiicijiing the admitted undisclosed ip.ssti1§3_ dated 1a~s~20o2 the at the additions and so far as remaining rejected the same, aggtiasisa by tt:vs%:"sassia;.éV sash wsra fiiss by ttia assassjas' aad4.VtiiaV_V_V'Ravsiias arisiag sat at i§"t€ aiasit as's.assm.a§its :§.:§}Ci. .?I:v-(E? apssai sash by tbs assassae ass Rasss't§.s"-ésstsv Ttiia_sf'f.i'at"§'sisg sst at tbs rsgisiar asssssmant '.;-{airitist Sat:tistt"i£iZt3{3}, "§'tis Ttibasat sattiy aiiawad ttts at ttshassassaa zattstaby same at tbs assttiaas tiéa asssssiag aatttstitag ass ssnfitmss as ttta s:,:§§~;"M"

affaraisg aggeééate guihoréty were deéeiedi.

appeai by the Revenue agsaiiing the deietiens maﬁa ﬁg:

Tribtmaé ans an other graunds.

4* The appeai was admitted:-'fG*«:::;nn'_:»i::ig¥3§' ':§§é:-'[3 foiiewiﬁg substantiai questicns 0? £325}:-

il) Whether the Income Tax.._§{;>pe§ié:e (ETA?) is correct in Iawjsj deEe;ti.n§,j*'th'e.._.§;nd.é's'c§0.sAe;£ § énceme admitted and Ci'efi!'a_:eA:i f;_.::rL'.taxaf10_rj in the Black Return filed underV_t;fie_VVpLi%§§¥§Ij»§iciiféSection 1S8--«BC sf :he:.1r¥f::C'rfne (2) WhVe;tHeV; ¢i./f§j_¢ in Eaw in ﬁeietinzﬁ gszéfééiosed éncsme ﬁeciareé "in V ;'%é:um when such us':ﬁ§siiaséi§4._4§.m:.Q:'V%§e;_'§Vs;'._a'é§f§§'it'teﬁ by the agsessee is:

:?:e¢§§taYiemeé§§.§f§é:§ré§2§ Liﬁﬁéf Ehe gaxgisésng 3' .'.°'S§éti§:2?--.";§3:gaé sf the Encama 'fax éai, 'ﬁgzhegg $i3€§'E aﬁméitéﬁ §§3CQf§%€ wgg ':":T€:sf'd'Esé§aﬁ'f-éL;§ Ehe ESSESSSE éaimseif be#%:e éhe agséggirég avuiksaréiy at the stage Q? agséssmeaé? 'j_«'vE?%':eih§r %%':3 Fiﬁ'? E3 §@r:'e<:%: Es'; éaaaz $3 ' §{--§§$'{§§?§ ﬁgs aﬁmiiiéd :,m§§§é:l{;se§ magma 9? %:'.?L§ Jaw Heme; 'the §33'€S€ﬁ1'.

;'3'\ iekhs seiasieg ta smzessmeni in iserreeesiy Sistéééesées reereserzténg Cash said es: the essessee when such unaceezmted investment is evEde§3.:_'4". :'-Q3. frem the seézed material; cenﬁrmed by H assessee in his statement an eath a1;}d_ effered"fe'_r. tax in the Bieck Return'?

(4) Whether there is ev§VsEefise a}ié.__2"r2aiseréé~i """

justifying the ETA'? fee de§e_t:_é-.V_:E"se e.:imittedJ? undisciesed income o'f'..4_:fif:e ~%i':?,S iakhs reiating to investment in-1§\ioLm*éaVnc£-yf"f):';~sﬁi.Ieries breught to taxet§.§r;~._i_n teeV53<:g:§<.4f1;s's_essm:::s:§t? (S) WhetEne'r-iitﬁe "'l"Vi*.%I::I,_::'t*1"eTe_i' .:§s'"coFgfett in ﬂaw in Canfinésfzg Ehes endEse!"0se'd.:.:'Encotﬁe" éieciared in the Bleck Re.:u;*=;é te fakes as against the admitted'"e}§disc§'ese§ :f;L:;:eme sf €515 Eekhs re§e':%e1g~_'se {m.:~3_:e:>"i:n€e§ imiestmees ezsrcheseé '-§ses'sé._.§?%1ﬁ:f{Feiiéma Se: see steers?

ETA"? és jesiiféee ée ee%e":§?;g an eédi'a';§s:"%V___v'ef.?:?S lakes sepseseetiézg ameseeueieé "fg._'i.ess "eéfi;eeeee as see essessee se Se A ~§%,VE€.L%Esghevensre sxshieh sees has sees sieieeieriéy

-'a"%§e"éé%::ee ﬁg; the essessee by meees sf ieises féieé :""""""°""

eefore tee esseseéeg euthetity erzé has eise beet:

effereﬁ as tméésetesed inceme for taxation in the Staci»: Return? And whether the ITAT'e apereath §.S.__J4'V based upon materéai warranting such de£eté0n?.--'4' '-- :7) Whether the ITAT es jttstifiedgin §jA'eT:<g:ti;3g"gn..: " V V addition of H5 iakhs !'€[)T€S:€!'1UﬁC_:lT__!..ti'1€)(§Z)§aib'!f§f?:C§ ~ '~ V eredit voiunterity admitted by? t.§je..V_1asses3.ee' itt ietter filed before the assessing:ezgtherity"§nT_:t_he"} course ef assessment ';;é.fé:';iee«§iing§sV?~«.,{;mTd"«.whethAet the Tribune! is correct in-T.'AVla'w':'iai this Enceme on the "g:{tju._:jd tghﬁet":t:::eeeefn_ot' eeivistitute undisciesed esite jji:1"cits:d°é'c% in the biock asses<.-:}"t}efi1_i2?.V 'V V' {8} Wtzetéterw !iZ.t3§§'€Ct in Sew tn defetteg :2::di'e;cé5e'et€':."'E;:§:eme of the gum ef teem',:ts9;»'%'e;eesVent;'%;g kmetsegasee ieceme in :3-ft i,§v€p§Si'i"it§V'§'§"i"'§e"'fS§F3 geek'? Ame whether .7..§:%"ie*v"Z"?§§:;I._§'iE:?'f$.e'§3§%t'i:2aC?"§ fer deieting the additme is e§'ae7ei§;_e%a7' e§Ee;__ tﬁetetieé?

'§§tte'§;her ee the feete eee eéteumeteeeee e?' A V.:%v:%':A$:'i::§«§%$E§ the Se? ie gitsetiféee ts: eeieténg the .'ée"_.e3:§--{i§t%ee ef 3% §§§<;§"tS teetesetttéee eeeeeieieee eeymerzie by the aeeeeeee te Sri Devaraj eee Sr? Bhetkei fer acquiring the preeerty when such eesétiee is evieeeced frem 'the seized materiai whether the deietion $9 made by the Tribune-E:-.13 A V based upon relevant consideratien and mate':e:e-i»ai:i~0 sustain such deletion?

(mg; Whether en the facts 'eelci-...:ireLi'metan:ee' the Case the ETA"? is Cerrect in i'avé;' 2:'; deieiizig ewe; addition ef a sum 0fv;:§"3a9,68V,"f3VSA1?'-;':5_ .s:9ep.resent'in§V; unexplained cash Credit eVn.e_'t§1e---gV5reu:}§:ie'-thai"E: does «Bag; to be not represent ;m::_!_iscI<:3§'eTCi'fi;r:s;%:>:r:§eV 36;: subjected t04_V':13;><a§.§:i"'o;¢1 the biQeE<:V.a'eé;Ve'ss'ment? (11) wheetheéfa; t%{é§"-::'§"Afr--- §s"'e'ue3ect in iaw gm deietinvgi theV:§:';VfE'§eAeie0eedA_:""§n€:eme er' 5 sum ef ?8,16;§§(;s~;'s§ -e*:a£§e"Cée "*--.i:V?é'e eieek eseeesmeni:

;*ep?eeeei:§:zgf"tE3e'ee§e§3e:€i:"s eeeemi iexiestmersi in «.¢_'i:%1ei:§=;s::§:e§:e,ee of §e?::'e~~--«§':: the eeme 61' Se i%.§v%e§eei':i »e:*:'e.gee,e':ee.:"":he Triee::e%"e eeereeeh ie deietéeg é:f§z§'s:".___:«.zr*:ei§eEe::e'e'" éeeeme is eases eeee meteriei em'--..__ ;*e§e%zv1e%:€*: eeeséeereeee is eeeieén the "V..eeie%:E§:2§f;?':.

eeféfe {:2} Whethe? tee ETA? :3 justifies in deietieg ihe fezegeéng enﬁisciesee inceme ereeghé: to tax when the determieetier: 01;' such zmﬁiseéesed meeme EST" . based upen cerzcurrent findinge cf the asse$$i':":;:.«$g:" "V-- "' V' ' authority am the first appellate author;:x;._,ej%:dv'*1 whether ITAT's approach in deietir'jieg'AA»Vt»f_1:e' is based er: reievam: ;0n$i€ie_re-:_iT:%%:s _ eupportabie an any evidenVt'i'~a.ry Am-eVte.r§a'§»._V'ei§._.._ against the seized materiai em :,:gthe'r"'si:e?%a§:te:iVf; materéaé CGﬁSidEi"€d ':e'r*2<_:! by 5:h'e assessing authority as'V%W'ei"ie~..ajee _?t%i:"ieeeV"_».e};--pe%%ate authority in suvsf;:a"'m_i'ng isigéh "

(13) Whefhuer--iﬁBi?;~eVI;i",€\"¥f§:'5.e_§:§.p':'eaefg iﬁ deieiting the said u:ri§d§§:;'%e.;é}ed igax is véiieied by eierlneret' :3? §e:E$ze%seEtig%--e.e f'ad "subjectiveness?

(2.4)":fK1het?ie§,Vf:heh*E"?$zTfejestifiee in éeieiirgg the ' '~-,i::::e%2e_~._e§..§':3S:;-:i3i3f- efeeght is iex m the '§>.%eg::i<[ e_ese:$e§'%:e_ei eeirzg the iraceme eéreiited ey "iiiﬁe-..ee§e§e.ee'~';;'r'a"%he §'€?£§.§§"¥§ feed efier ihe éee eeie ef"§§_i§e§__v'e§vAé%§e eeium ef éeceme eee e%se efﬁer the eeereéezvveeeeeeiee ey tee eeeerieaeei? g "9 (:5) '%"%!h€f?}€f the EYAT $3 right $3 hséding ihai: 32$ aagﬁtai gaéns En the a3sessee's Case ari§§ng amt Q? the S313 cf shares ef WE/3; Kurechermaia ﬁantatéogfé Limited, Keraia, braught ﬁe tax in the b!_;n:k *' ' assessment cannot be cansidered as ::ndis:;§*cs_«-iéé ""~' income?

(16) Whether the ITAT's"?._£c'o.r}c!uSi'or} appeiiate arder to the effect thia:}f"iii"ﬁe.x:agi§:'aS. géins § braught to tax in the é3 S'SeSSée'f_St LC'a :a=.é L"::.nder fhév biock assessment can'r§%<:s.i:A C§T!f1 $?,A§w»?;§'i*e_d as amdésclcsed incgma isg'§:j'p'p:é§;;té2§V¥v::%_xis? being based on a;:3z§--.va!§i:i'V'§eaé0n€,:._févi@_4éf:¢é §rid material when the a€s_§e3j §'i;:1.g:,:.5L1tﬁt.§Ei_t;("*a-5 well" as appellate Comm§§éi'é::'e§'[ii,ha{€:é:"stis:i:«é-Eneé "ii%:'é determinatian af *i:he ---,Ca-pitai g§&»sf§§».§i:*:__ 'i;-he'basis Qf reéevant related fa<:f:'é,:;';s*e}':ss'§;<;'§§f ;a'§§i.L,»»%%'%ater§a% a3 referreé :9 in %E1s;':*e;s§e::i2:$'§r3deE;§?

%,s2?v§%:é1:§:e%*vQ;a the facts am circagmsianceg Q'? %;%1éi?'.§;AS1e "g;;_g;~5§:*%'E:u:"2a§ $5 aereegi Er: Eaw in %'°:§§§§:'*ag ihé"-4.__§:g2'sf€.=;éi'sf shases ﬁg §e vaié Gesgite ihe V' "..§i;si?;§i§:1 '§ha': the shares have EEEQ irangfgrrad ' ., "'f*§x;,::9"%%"§--2g Ehe fégzayeiéai war :§%=~§? am ¥%:'§'E&¥'% the .' Eﬁgséﬁé 9? Bﬁggiers 0? iha sgmpany haw aigo . < ' .'.:§§:..a§ 5:§"e§uéfﬁef §&SSE§ E3; iﬁa Tfﬂmsgzaé ﬁg €§'i'§?'§$G%JS gaé " be SEE agiéeg 9&3 aaatenés $233: 31% '§'rE?§aana§ raéified 'ithe transfe? €32? §§'28E'ES 332$ 53:21 iransﬁsr is recsréed %r: the registers of the camgany? {:8} Whether the Triburiai is Carrect in Eaxéﬂ---i:1 ' --v ""

homing that the transfer of shares H}jas n<:_rt"

ptace during financial year 1996'-:29'? 1 of unsubstantiated cententicn ota*"._:ﬁ'€V_A.»asSéV;_$A¢e..= that the transfer was e";[':_: "~..;;gntr9a'~;V$r:»t§§3T':9::_A memsrandum cf understandi§L;ﬁ'§L:_'a§:d mi cmsent has been give3§ 1'o;r tifié shav:9é's §V' (19) Whether Tri;'iE17f:ai:V:: :3: {:}:f.::,r_*V:f'e ét iaw in hoiding tha.t4_.t€f;3e Vfdsbe treated as void as g'i'§Qé"n his consent for th§--?fr*ér:sf€:r c«§%,§:'§}s§%'3a:'§'e§'-aht? w'?ééther such View és su$it;aina1b£é;"ﬁhéta, "t§3:é'-».ffansfer is aciualiy &ffecteé'éé2§ exéié:%%:'%;.. fr.§%:%._n4ﬁie ra:§§%£a':Ean cf the i;rarsg§&r_ §.E9:'é~ iB3éir§ af Sireiierg $33 guch «._:?av-é%g§fe;;f...§$~é..r:g s§1:§v;"{§+e;§ én ihe c§r:"a§a:'§;*$ §'8§§§E€E"§ S; §r§.'E*;'%§§a%<:§§>sar, the ieameé Sﬁﬁiéf' mange?

_.%_jAj'_;'3;.;2§§%:5.>a?;s'§:ég %.:;rVz _A'ba§*:a§f af {ha a§§eE%.:»2::§'§ ataamséi genteaéfs Wgeeeeeeeee.

eemmitied a grave erser En eeéeéng that eves? Eheege ihe eseessee hag eéméited te the ertdésciesezj iecerne, asseesee is emitted te retract hie edmiseiem The "" V fen in errer in accepting the assessehefs,»_f:entjer':'=€§';¥~;.§:_':V:53}:

overriding the admissions made by th:e a:;_Seeisee.. various incriminating ﬁocuments"TVh'e.ye beeh un'ear?ijr:e.dVH during the Search operation; and -riesuff various undisciesed §ncomVe'*4--....?5éa.V6;;/,eﬂ':9@'é"--V,'e':§_"ﬁght, The Tribunai feii in erroeén heI'd'ie.g:'~AV§:§.e%i}n§nating material wag 'ef"VVSearCh and censequentty The Erribsunal has failed Qbtained during the eeezeh. fie iee eepeaf be eiéeweé eneihe q»:;;ee:§e.easue'f~ ee eesesered in feazeur ef {he zeveeeeie'. . 3 6, "SE? é..§%ée'%_ae§<'e:; ifae Eeereee eeeneei eepeeséeg fer .:V:t§f:.e444_"%fie$eeex:iee':e Centeeee the? eeee Eeeegh ihe ieceme wee eeieééiiee by Eete .§e%§-«£4?g§.e?§eee%;ere§;. tee game see ee eiieweﬁ %:e be my {TX exeieiheé/eeereesee by the iegai %"€;}!'ES€§"'it${§¥f€§. He eehtehds that there eah be he estoppei against assessee. That: he Es ehtitied ta contend that iiable is be taxed in iew; even thcmghM§;§mise%o's1e«:ififzeiire been made That the Eiabiiity to tax is :':jeter4h:f§h'4e:i_.:

and not by admissihhs.

?. Heard counsels.» Reaardinq Question N031 to These ques.iiii:>ns;5§_%"'p_ertain:.'vie d:e'i'et:écn of the admitted U§1C§_§_S_(§§Q":Z$C5'11»§7}§:GfT?e"'Qf-§ii'i'?3_::§SSéSSeE, Since they raise a een'*i:jr:0r:~ qVi3e.~;*:~i.Qhe be"Ee._:i'aw;-- they are iakeh up for eeeeéeegeeeh e«e§e£:he:*;'-- V' "Ehe §veame'5d"'::*e:éhse§ fer the revehee eehieees ihe§'Ae_:§€ee_'e::§e;eeeee deeieeee hée eheéeeieeee ieceme. L"'*-eéeviee 'e_4hCeV.eéé£%*§§E£ed ihe eeeieciesee §E'%€Q§3'3é it $3 fee: ~«.7.j'e-;s.e%:-fer him ﬁfe ge eehéhé {he sereeg He fzzether eeeieeée 4'f§ih--eé~%§'ei%:;§§§'§.heteee%eg the eﬁméiiee emeeeteg ihe eéméesiee /Fgaﬁfw V}, deee ¥'?{)'E preéeee the Revenue frem eeeessing the seié §E'3CQE'T}€,

9. Sn the ether hand, the ieamed C0un$.e'-~fe:§'~..?§hTe assessee reiies en err vs; MR? FIRM; M:iA}ARe_-.re§:eE'te:e..'§e T ITR 6?{SC} whereirz it was heidfhat ';'T%f_Te' doc.§:'s*ui'r:e.»:4_Ve:f V "approbate and reprebate" is only a eipeties 0f'e3:tep:pe§';; it applies eniy to the :<:mdL.s<::*: p:a£r_tiee§".21;s".if§'~t_he case of estoppeh it cannot eperateA.VaVg.ainst--.Athe""pre't%isi'bns 0%' a statute. If e eastikiuiéﬁ§_::ce'me.ﬁe :1.<?;s%;.Vf-;~:.>V'<'.£a"i;'s'§e under the Incomeetax Act, ::.;%am«;%: basis of estoppe! 0:' any othefivveq_u5te't$vE'e:§--«.:i:iC:::tré!}b'é;...___ Equity is eat ef piace in iex éeezg e ;35?i§'€ii§:3f §:':'::e%:f:'5e ,.%§"'-eééizeg' exégébie ie tax Eéﬁﬁﬁé' the taxin:e_;eieiie:e e': iéée me: if i': ée nee; the Enceme=':e>< §i'=f§Ce%*E*3ee me .ee_e;'e.§ is eeeese tax en tee eeid ieeeme."

if,_}«;%x;%eev_é§ev';?i:V_§*':.e;* eee ey ihe Seereme Ceeei es » :f_;§e«§%eese: -

V _V '§?7§%:e"""A_«Ge::'§§§ee 3:": émereeeie Eéereyee Reg: ex V'"fj, ~..A'.-5e;§?%;?f:§ssie;2e:' ef zszeemezex gieze iesae $333272) *-*''S'«:

K; 3;/><'*"** *2 / Vow has as §ear§r3g $12 ifée gsjeszfan raises' ﬂefsrgﬁ £35, There :'he C8f?€ESSIQf}'8? scheme ée:22,z:r£fV.«:;{:f»._4' z'f)$ asgessee {E discfose szaiunfarfiy 5!! his ,~€T€3?f}'C%$é2"fE"VQ:7 irscame and he agreeé is pay the properféx. L:;,vgx:5,i£:s.'?::i'%i2§9[1_4'[ M The agreement there reiateaf L:;<3_£"he ¢;:kéht§%ifc3'i:é:ﬁ';;.,V$5' " ' taxabfe income but in thé,' prasﬂei;nf'--TTcésé'--- 'i;"{r'i:}.V?':tZ".,'f: .' sought fa be taxed is not a Via'§<ab!e ifzétahée'; assesses in such 3 case cerit-:é:T_z3'iy'--.V;f5:{5é~--,}:?}§'e' gélea V that his incame is 2305 t5;%§é§3*.f7[ie'~.;;na'éf"€!2e_ We, therefore, reject" piléa, " ' :3, 1_A_Qf§ér'i:' a'a:§é§S«eé___V:ii'0» prefer an appeal Cannot t::e=i'é§Ves'~'_b's'*e::c.';f 'right granted under faw. He §s 'aié;;~,véiététiéiié"t:3 €si:{:*:*¥;_é:'éé"':hét the Returns submitted by hin5:.A€§:2%ainsi':é2'§':'¢[r:*::.._ §j'::..'Jam' and C§%"3S€Q£.i€i"$'£§'y' E23 $5 mt sxigééée $52:-32:'. --L£'ri2d§e:v:' fi*'%ése §%:*::;;ms€ar:c§§_, the §;,::§*:e:§:ie§ ~'"~,_,_ar:.é. \':€§:;_iy'%3§::r2§ ur§§§:' Saw ta examéne {ﬁe matter am __'°:§.:--3?§:&v:jz:*:'§.r§le=.§§:.§ 'géaagiien 33 is whether 9:" act the §SS€S$E€ §%.~3~ §'%é?r;:s§ej_ ;i a1 §,;3T§>< in $335.; Siﬁﬁfﬁ tag éﬁiififiﬁ cf ssmgga ﬁaeg " :19: a'r'§$a%s;

1:. The right <3? the asgegsee ie 5% ar: ggsgeai ahaiierxgfng the érder sf the assessing authority.ﬁaé-w.:j0t been denéed to him and on the contrary the entertained. Therefarei the prEnjC.i;3?_;e ef_-'é$t::§:;:é§""hV'a}sV :z(;f beer: held against the assesseey'-in ;'<'js'é'er'f;"Q"'~§::::*e\/§E1";. E1:Tm fmm fiﬁrig an apgeat.

12. Admi3siorV§...V:"h..ax;}; by Late Sr;

1-§.R.Basavaraj.A.,_ It namely, and go behind the adm _ R. Basava raj, They conteﬁci E0 gs behind the admissiens made §;g4_j%ss;§&g~%%;A§ 0f the aatharéty that they age;;':§i.e:~:%§§§'§&__éé %;a>}:, We are uname ta azgegi the 33% ;"f}§: '€3%2:€§§:;":.;4'A"«5fhe admissiizszs made gamma: ﬁe retracteé by ESQ?gg}..,v;je§%eéeniai%y&s 3? ihs gersan 253% maﬁa ihé aé§*5::%s$v;%.é:":;v-~'Er2 {ﬁe irzsiam: sage; tbs aﬁmisséem maae $2' S%E" .H:ﬁ;,§asaa:araj§ carmai Eg reirastaé by ézés ieggf ':ié]§§:ése:%:a%i:;$3 age ihe azaréezsg gmuacig ma: are Sﬁijghi 2% <:€£w-W Ea urged; 2:: VEEW Q? the admésaisng maﬁa, Eh: game became bindmgi It aéss birrﬁs the Sega! re;3reSc:>§j't«é_f;x{es. Even thcugh the admissions are gaught to he by the person who made representatives, it wouid stiti an*sA:(>un ii[%:»:: ahéd_§9t2§$s»§'%3~:':'é;.:jd wouid bind the iegaé repre§_én:.ativ'é$.._V ':;v59 the. Act pestuiates that tifje Iiabie ta pay such sums as ﬁe iiabie ta pay' That any proce :3.d'Eng before his death sh§!_{ taker: against the iegal centmued against the iegai stage at which it steed an the is: terms 9? S$C*C§(}I'3 :39 the iéggéi' '?§>;3r&§e§:?aa:§%éfes £33: éﬁto the shaeg 3% the éecgageég ._ ?§%'?$v;£__'&~%'é §§u::§ by 32% §§f3"%§S$%§ﬁ$ maﬁa T%1%s*'ef5:*e,. thég::;§%1.r:':::*:" ¥"'§t§"§C%: ihe §§I"E'":§SS§$f'fS maﬁa, _.,.,,,.,,.,. mm. -..

2;: the e:a§e sf ?ULL,£E\1GQDE RUBBER vsa s?§TE 3;:

KERALA repsrted in 9: ETR 18 {SC} the Hen§b:ej"~S{;<;qre;ne Czsurt hand as foﬁiows:-

.1' piece of evidence but it ¢.§nn9t .E:é"Ts.é~;.g§ "th'at :.,;:_ is cencfusiveg It is>T.onpen4'{Q""the p§2r?:s~:2}f§"'$%;ht;§ . made the admissio*n.,:'L:"'~~t%Q sﬁ0..=A%""'§$ mcorrect," ' .' V5 Therefore if at ali theké aha: is sought to be retracted .vE:j§'a..r_: iﬁerson who made the admisgiaﬁV$22-dV*_V__:j'at_V;t)§;/"~~aVf1§%{béd-y. eise; Hence; the said Judgment. té"~th'é case on hand' "The§~~:Sé;é'{c%§4"":;_%jé:§ér $€€f§§ﬁ 132 of ihe Act was Ceﬁcéagted uéa-.VAA'5=i'2~.i:99:'?, Sré H,R.5a$§aza:*aj gays hés 'V."""3té::.:é}néié':%ﬂagfg 2592'-éiggs am é;~3---E§§8g ﬁe éiaﬁ Sr: §§iT€ §:"% éiﬁﬁasaszaraj wag 9? 31% very' $aé':2;_% §;§e2%§__.7~"'és itizgt 3%' his LRS with regaré :9 E326 "". "*--:3§2ﬁ%si§$.sé§ mwme aémiiieé 53: mm; he wezgid hgve %%&?§.'--:%a%:i.:§§ fram 5&3 §ia:es'§§r2t bgfsra his Géaﬂh §'§§WEi;'€'f' he » ,..,.An admission is an __extre;me§3}mi%%zA¢';;rfén'§»} V h3§ pastégégateﬁ Er: the gmcaeeééségg fm' aimast Bf; years am has even géven his statement, In the 5tatem_e{§?:'-ﬁg-w.if1as azeiuatéered that if an further scrutiny and sgszéiméfI'§.:§'-Qjfﬁ-.:_T§'E.9 any representatien is required by__fi1Hin_'1 he_.'2'§§"'w-é§!'§z*z§"i"%;5'.ma£f:é' » 1 these representations and gay enhaéicék;€f '*~--.:é;é:gs accordingiy. The tencr oi'i<&1_Ve stat_ément _§rx};§;g--!dm riiearigyf indicate that there was mm with regard to the c;u$:":.i§,;n:; _.<3€_ %§i'eV_'vv:..§m§i'sclosed income; Therefare he h.as staiizecivihtﬁat to accept any such Qﬁféféz Eikely ta be made by 'entire reading of the that he woukd henour the a3sess%§":'£?_{_its Jias:sessE:§g €:r§f§C€E'1, "E'herefsre he Cs;i:_f:§f2':.2.e§ it-3 '?:,4'a;a€:f:$ $33 {$28 aﬁmésgéms made as him, ' . £395: ;*a§%e3en:§'{§v§$ sf aha ﬁaeaseé E.-§:"§§~€;»>§£2-%é§;Va:.V.§B3}fg $5 3 $333? ané 52$: 3?: Esgdividuai, "ﬁe 'cmsi V ., *~i3.s::%_.§'%§ 5 §E§'"£€§§€§a§"";+' can iI?"§8i'Ef{}§"$~ dégguie 39$? 3% £3? 33 ihé "'V.:§;'*:a:'5d1§':":§i:%:§é §$€'€§%§'?i§ ara C§?'%CE¥'?'2€§ ané éarmaft cgniegi the m;2%,¢Wi 20 aémétieﬁ amgursts. Hewexgey they sag: stééé centezgé mat aver: 'chmsgh aﬁméssicrns have been made, _;i.h:}e-3{'T~..are centrary is Law. "Fhat in law, there is no iiabE!§_t§{ £0" Hewever that is mat the case. The;fgtra<:ti_;:r':'i'sv'a;:f_e,_é::§t§g.h1:.,_f0' made net an questions of law; Ezra: 0:)" faictgg._{3n:"faCLt»é'L~.:h1a3_r;e have been admissians byv':_f'h.<_V3 La't<3 '5.rfi. *§€I';F5%;..';'3<.a$Va.€izaraj;.f Statements an fact Cquid {ate Sri. HER: Basavaraj. it 's.»~.»;z§§zV i;'"z_<_~:'v best suited ts state on facts. The LR--s~:i:&hVe a Trust. It was therefere retract statements of facfzm:%1'a;i":<§.~ 1".;_§y Srig é-LR; Basavarajs Conséaquen£iAgk""--"'.:?«23:"'~%fécﬁé','vv..j__t--he {Rs cannot retract the admissiéas made 5';éA";.e*:3;'t't:'s._V$'ki§ i~%§Rg Easavasaj, A zetractiérz £a§:;§¥e maﬁa :;::,s}gm :25: ermr sf 5525:: and {mi (35% facis. §;§';}.,__' §§m§:;i:at§§a§ ?"E§3£€ been maﬁa bageé 9%': ii'2é'*=s;%;~.:%':c§2---é::é SE§Zi_§%"€w "keg: are :23: sﬁeiy §ase€§ 9%': ihé V "._ "'a:%r}'2§§S'§'G::s maﬁa "arse admisséaras maﬁa §":av& $333': '%:é'r':s{iz§e:*ed gm; 33 a aircmrzzgtaaae wﬁéie camgutiag Em %££W «.9» zmdiaiiased imiams, Umer iféese €§?'CL1é"TES'E3%"EC€ tbs reasarzirzg cf the Trébunaf ig unsustainabie, it E_:sV.V:§*e:§4:féTé::far3x is Eaw. Therefore, we have no hesétatiar:

Tr§b:.ena¥ was not justified inv_g:IeIeting""v't--§§ie a:dv'm»ittéd'~. " undisciesed income of the assessee.:1""ﬁ,¢'C0i'd_i'n.gI ,"L;i3L£*&s'tivQ'n Nos. 1 ':0 6, 12 and 13 4»=iVré:.._Vans%}v-a:=;f9ésci,V (Sf Revenue and against: the asse_$"see'»--.._» Reaardiﬁg Question "

(2') jugtiﬁed in deleting an ____ pg': ::!;x*é1§<;'2§::;'«.=3;:;*%resenting unexpiained _ isry fhe assesses in éfieV13£'$'é':9: ﬁ€iédV_:5'ef¢r5 the agsgssing suihgriéy in C(_}vi;1fSt€:**._v sf'. :_".:~:sses§::2er;: graseedings? And ;»vf?ei€*?;.ef tééé ?"';*;'§u.r2s;' 53 €{3s'"2"'8£'i' 55*: 53:22: :2; A' ¢%:§§éir?§ ii'E'£"Q{?"}€ an the gr§z,i:m' ﬁat if 335$ "2_: :*;%§2i'..[3:::::;t2sz'££"a:fe wsdisciegeﬂ iasame SQ as 53 5g V ' ;'%%;:i:':-§'é§ 5:; {#25 bias}: §3ses$:??s;2:? §%":..:?'i:"2§ {he marge §f the: grgggéééaggg zine aggassee T&~__"".{/€'ais"'as§<e§? ig fasfnigiz égtaéis ta gr: gxtgni %:Eg§€3;€:§Gj- %::":22£w* whiee were sﬁeem aseder the heee ether ieeneg .__:e the reeéy dated 22-13,»1999 the appeifent e§n':ii:tezj~eff;-.2;}:'-».:he §mpugned sum ef :z--f;:.5,<;3e;eo9/~ cauid and hence offered the same as :;nd,iscEos§:d"';'m.§en§eV the biack period, Subsequentiy, befeee tfie..»:aese§;'si§§'g was eentended that the s:i_i{§.._V.sun9E'-wuss.'__re§;ei?é{ee.V.,b§/ the-'I eppeiiani: by way of demand'__eEfef:;'s:_f1eq§ie'--«e::f;_g»V;:E%edited te the Bank Account. .aé-s_es§_see"'--3{ve':ieasked te furnish confirmation ieitters fremf the' §o» neie;s:". Hawever, the assesses yv.ale same. Since the Wham these ameunts were Shawn in the cemputer generat'e:'§_:be§ve':i€e""e§":ee%;-:...ee. emery sums; whereas éefeet iézege-;j"'eere m'e§:;ei?; reseeveeiee ef eeme eevencee eg' %ea;e'ee':ée:':%:S"féem the fems, The eeeessizzg effieer eeme ta '"'§:?:'e._ee?geEe.§~;_§e§§:"%§3ee the emeeee reeeieee' by way ef eeek §:'*e"fiﬂe;<if eeeeue wiéi ea: erexie eféhee tee éeeetiee 53? {fee 3 ._:§;:e.:,!_;e:* ef ihe ceeeeétgg is Eeee. iéeeee iheee eireereeieeeee, ﬁée' eeeeﬁese ceeie ea? fereéeh the eeteéie, Teerefere, éihe §s1_a\§§' arfméééz zésss iréaééé' as z.,:rzé'is?:§ss§é §:*:§er:";§*. I "éfirffsaa ':a;3§.:*&¥i»a'f.€L *ai.:_i':i'mri*:§,_% §:§_r1f%--r':*r2 eé' the --sf§Ii_j§.. f§In=§_¥n.§. 333$ ' the 'f'%i~bi3':za'¥' cams 3:9 :::3r§ci_£;ss__i_e1:3 «based eta' 'aznyéearch zfrzfateriiai_§a_r:.;§ ;j3%e::3¢e:.v'ifza%é&;?}§& V 'be'sustﬁi'r2:f , *me_réjiy :3--1j;'t%§a_e 't:>a$i.s b;;i:--_;a:i;<;s_ __o'f"a«:m;mt, 8"»; piacii§{j.«--..§e'¥ié'f¥§:% {--.3.--i§fatai_ :~«12:.gr; £?i:m--r:.'in1_«_t§éfe';..;_§::;§g' iﬁe Eegeé eeereseetatéves eeé no: by the éate Sr: H R. Sasaverej. tinder the previsiens ef Chapter eutherities are not computing er recomput:{7.§g:".th'e.'_vjie:»er:§'e_V as a result of the search buvtiwenly undfsciesed income that has been :1-'fe.L:;'n'&.._.§it.' jthe"3j:"ieme:1._e1ef "

eearch. The explanation <:r"1°'e*':<-ecf biz'-.tﬁ'e._ases eéSee_VVwas he-ti? Cerreboreted by the person§:V:4'L:§§§§.§{,i_enee' Hence! the assessing authefie?' it as undisclosed Encome. UndertheseHeifeuezgftee§¢?'éﬂéﬁ;;a} are Lmabie to support teeii the addition sf examination of the baiaﬁee ._ ef bieck assessment erecee;:i:'n§sr V' :.{§ie"4'e'ese$see Tree: has effefed the :;nc;?;§e'C§s:;see éegéme, 'the Trieeeei §i'GSS§§,! feﬁi Se errer in :% «s::éf:"g:§::§ii'j:e%e'z«eee:he edéstiee ef%1S,.QG,G§@f- $3 as a reem: ef :?:e%_ex'e§?_:§r3'e%§;§e'e ef the heiaeee eeeei. The '?§'§e:.,§ee§ feiiee te""eei:v=ee Eééeii See edméeeierz wee eet meﬁe ea; tee iete Sfi, '..,. ">H;,,.§eEeéeveregg, east ehe :R"e éhemeeeeesi ';??:e §ee'%e§ "'..%eiee%"eee my the Yeieueei is X?€§"tG§§§«" zmjeeé emf eeeeeee te f? 3 ihs maiefiai avaéiabie as yescsré. 1.55233? 3 '€h€§E gizcumstancesg we are Q? the consééereé arder af the Tribuna% is erreneeus and aside. Accordingly; the question:L>§§»»ansv\;ereﬁ§.::'i_;::

the Revenue and against the assé1sse_e:2.f5 A Reciardina Question N03 "{8} Whether thé' ~§'éf2"»faw in defer/'ng the U!7C7'v!.'SCI'OS€:i'£if'v .i§"!C§3fT.f(EIf_ sum of 318,41;:5Sgffrsﬁ-fesigiéfihg..:::}}§'c2'£s§}§3sed incame En respéc:i{:.L"::r1%"':j'éi{2§:>Sif;§,'.::?n._ iif;z§;ffa'V-Bank? And whether Vfhe. agsigjrﬁacfifz'---farE1e!e£ing the addition £5 Tgéasecf i:i;?: ,.«:m y= %t7éaVté::€;;vi?*T*~ ..¢9¥.i§"§{;i§.. S§$§*£§"3 7§:§.é%"at§G§'TS the maieriai mvéaieé j:§*§;--2%::, £é'%'=:'§%:'z_F§x€§ﬁégsaséts zvgrs maés by iha agsésgee amammg 3; ?83§3@§®@@/P $5': iﬁygya $3--::.ij;§%«:, v__§:1a'.§f ;z}%'§'{s7;§2§::::agar §§anc§x 'ﬁat an ﬁne maturity Q? ?E;:»:.:'j:§ Sggesits, £533 Qfﬁﬁﬁééﬁ éf '£§":€ Féxeﬁ Segasits " ?V--@?'i% {:?E§¥i%é is 33$? béﬁafééé gezgana. E: was hswever csntendecé éefsre the assessing Qfféces that the ﬁxed Sepasit 0? %'83,G§,G{}Of~-- Eakhg made Er: vygya BE':i':'."':~l.,(: "s<'.'s.«é':8E7£vv duly reflected in the fundg ﬂow statement . prmcépa% amount of ?18,4:,159!_fL,Aw§s "

the ﬁnanciai year 1992-93 wh:ik.:'h financiai year i§§3v94 Elheé a§3essee was having more cash baiance with him _.g3a§ir;;c§4§:3é3'Vi:--..§mQunt has beam invested from i;E1.e_ said""baE-airgcye should not have beerj period. 0n the otﬁef:fzva.Vf§:§;:_;i;:§}% that the source af a-inexptained and therefore has is §eV«.%:r&:~atef?d 3:'S E§§"§f5§.;iC:§GS€d éncgma. jj., -ﬁgW. ?§'§§V V'V'T'§"§'§Li%"§§§ deieieif tééa sum 9% ;s'::§.aause the same was 32:5: 9*' the prgceeés é:",_§I*%e ::3;a:i;é§§§y G?' the Fixeﬁ §E§GS§'ES Eféé $23? a gasm $5 %$3;§'€} _{§~3§j- éakﬁs 239$ §'&§?%&r:?:eé £52 iéze 5:336 f§Q§:i?. Ea Jjkw' m.mvnmvmw«w>.x'«wn»V4lh@)»ﬂ\%K 2?' far as the amass: es?' Erzterést <3? %'2;8?,86Z,r'_-_=. E3 sencemed the additésn was Confirmed.

18. We find no errer committed ":57 'V ;

coming to the said concfusion. 35: 1:53" :35': the?"

Revenue that the additior;'V__f2;.V..baééd u;)Qr;. 'aﬁy*sp'§ecif§c"'I Search materiai in rgjspecftAAQf':A'éd§1'~i.:§'on..':;*as'h5:::h_.§}vere not disciosed in the booiés. .§f}f_.Aa'a:_$:c;.;1AVf;§f§"'Ffgfftieer the assessee was in possessions? Therefore;

an extent Q?' So far as the the addition was Confirri'1;V_ed.._ .A.i;j'r§}:iZ.:,=§<.If§:E*:§Sé_&:.:Ci~é;§:'nstaaces; the Trébuna§ was jgzstifieﬁ é'::_:z§€iéi§-mg" :E:é"'_.»:§5dit§c2n ssf %:s,4:;3;59/*~= whife cs;:f§§;fs"%°:'isg iZ?1EV'?é"'{';_§f§:§V§§<3é'}: af the énierest §€3f"£%Qi'% to as exieaé .%CC§§'d§ﬁ§§'§,r' qggesiéea %0.8 is asiswereé in §3 15§§;.§. 5:" 'E'%'sva_'aé;'§'éssee 552$ againsi ééae Sievemga, a%é§~sji_A':.V uegtéaﬁ Pégﬁ QWM ('K "{9} iéfﬁeiﬁer 9:? 5538 faség $525? c§r5::;?3si5r;5e§ §f 552$ €359, we gm? E3 js:1s:'§§€§ 5:2 a'sfe:i;§g%'j gﬁditim af €60 fakhs raaresenfing ::;7e:<g3;{3.%}fzéjc{;V"

gayments by the §SS€.'SSé€ 5:: Sr? Bevaféj M Shae?/'<32' fer acquiring fhehj,p{fQQ€'!'{:}»;Wi?Vf'%?3f;'?V V'3£{;;:f3 positian is evidenced from the se%',.2fiecui'~.syééxfé-rfa:",:;.>.:7ci:_ AA whether the deletion sgf FT?é%Ci€ b.§»f' the}»',.iz'Z<f}f.';'1L1}?ai:§: H based upon relevant ¢o.::§iderafEc;.*:' éag"';21é'£f§:5%ié!'t0 sastain said: defetian? ' 1 19; (a) materiai it was netécs:édi §i§!?§.;3t made a tetaé payment V Sri Devaraj and Sr; .G:'f:';.VIV;:;;xVri<>us maperties under the sa:%'m§5 Pfgiiééég:"'~_é#é'¥':'f;';8I'Et$ Q? %*§£3';3§§,QG§,f- and %5a,<:9.,ax9a,?%-i v%::::a§e "::=::2a»«5w:§95 §;z<:§ 9:": 2:»--§~§5 ."-res';2':é:tt%*%;f:a:*E»3§;A.__%:<> éwé §€f"§Gf3S was meaiiansé, ;%::{§é%1E'§ts Ea yeapect sf s:;s::f': §8'}*'%'"%'°§€%'Ei$ were ::e;'t'---..£§:§r:v§:a~E's§v _é~?;* Es'; 329 seézeé materéaég The asgessmg ""«__ "'e';>.§f§§e%..c«a§%*r:a is the vésw ma: whffe grgﬁagérzg the C§§§'% _ Qlw. _.:%::aiem&§':a She 3$S€$§EE 575$ fgéﬁéféﬁ ihese iwa /:3 f Q;/gif"

m/xxzxxzx////////,m,,m~.« 2% aaymaata an {ha gsaana that {ha ?'ECé§§iS =a:a:'a___:":a:

aazaiiabﬁa aaa thaa task éata account the iatai aa:a§aa.§aa'a_ af ?i,88g€}G,%QQ/'~ as agaénst acaardinglyg. {he Assessing OfficafA»Vp__race_a'd"a':;§:§a_ }'naka an additiaa af' €6G;Q0,00Gf~ amaaa: aaia ta Sf'? Devarajw'a'mjz :4 VA {3} The :30 payments an 2a~5~:a95 anﬂ a2:»s-;,aaa§ jagé;+§§g%£§Lr:§.a:J'§%%a'a,00,000/~ have been madaéiaa ﬁaaiaering the materiai, the agate fauna during the coursa sf af the aaia amount sf €'a@€,G9;A S::;§.§2=«{ Qaaaszfta af the asaasaaa as waééégaa Efiaa auia.a%aa af zaa aaarah aaaraaaaa Ea {ha ztasa af V:':$:f'.§_ N§%'f=;§'&A§f§§"xa._1f"§§ $3 aaataaa asaaraia bath af iaara hava ?~ia'a§»ag aaiaéaaa a sam af %:§,.88;G§;:3G8,r'~ aaa maﬁa» avaziraagf %2;a8;S§£}Q§fa, the 'maaaaé aaa that {ha ..,.::'aAa.aa_:%aa"':maﬁa av taa aaaasaéaa afféaar aaa caaféaaaa' aa iiﬁa' 'iiamgraéaaiaaaa af Eacaaaa '%"a§< aapaa§a is; waaiia aa as"

a2,4aa,?;f§agaaaiaag ~ Bi) suspiciarz anﬁ gtsange 2:3 the facts as yecem'. Aceéﬁiéngiy the aéﬁitéon 0? %5a,a0,o00,/» iakhg an thfs a:::§'g3:;§"§?s:.:§:%;:1s therefore deleted by the Trfbunaé, (C) The materiai on recorgi wéuid '<':=i[ea._';*l'y. shgw'"i:!j1.a1:

Sm' Sevraj area Sri Bhatka! have aﬂmifiied i:Q 'h~?::.§éé"§*eC€§i§}ed "-- a sum sf %1,88,oo,,ooo/~., F:;§r:£?:-er, §c'E91":=~,=.V""S'e3--,'§ec.f':Emateréag ghows that the assesséeg of %2,,48,eafooe;--, fr-ler3<:e,4"i:Vf'e§.§V:"-",'s"1':f:rV:1' has been rightiy added§.,;*;;$: _f§he confirmed in Appeai, an the seized mater;§:s;"~ §% c5c:i§V':.sced fer %50,ao,ooo/«, 'fine reééfgséffég' 'in dsietmg the adéitéea af ?5Q<,GQ',,QQQ:;'}3-"-.GE"§ %f?}§':; é*::C§:;:}%t is wfzofiy' :;r:5e;sta%:2ab§e. "%""§'ze

-'W._se§z:é:§*~n'§aA:£2iia§ ciéézfyéégciases ihe same. "'%"%2e§ef$:*e,, we "--,a;'a éfv.:?:e:_ ::$%§:§€§§reé xziexsai ﬁve: ﬁgs ééaiéan; made $32 251% TrEi:»:;%§é§ §$;.§é;'%é;:.A§'§y arraszeegjsk Atcaréésgéyf §i§€Si§§§'"§ 323%.? is "=..A_'_44"~a;§:s:;%zgrl$£§'t.§;': fazxm? 8? She rezséséue and against ﬁe L ';'%s~::.$é§'£%§.

JQQW ,QLi3Si:'iC3:? Nsim 10} "W/7etf2er on the facts arm' circu;¢';=<;§§;éi?é§%$--iéz'-'. . the case the [TAT is correct in fem: in addition of .3 sum Of é39§,53;357/;':¢ r¢p£e:,:e;§:;*;§g unexplained cash credit on fare 77{ not represent undisclaagd i;§(:a::f%:--'~:s_ 5:2: be % subjected to taxation ih»b/oaks:-:éés$imé;?t?"

In the course:§'ss:€*é?1sr1;i§§é't_»..:. p;joceedings the assessing offi.;§=.f ' éjas assesses was a partner in with few others. The assesses... "§:ve--"% received a sum of ?39,6&:;..35?5... éum sf 2"1?;18;3S?;'~ being the ameu§§§4..'$ ta:'ﬁi§3g ':§ '%:u%"3s credit as an :~«4»=-1§9§ and the ée§§3i::rs'§;e;:';¥;.§f i?2'SA,.§3.G_,¥3€3ﬁ,f~ advarzgeé 'as; the firm 229 the £}$}S€.':S}Sg8€ 'a:3f:'éf'~i§:§-§.9§*2,5 Sr: canséderéng {he materiaé {£23 $$sJé'§»3§;":2.§g' cmsiéereé ihe amezmi $2? €3§,é8,3S?,/~ 35 '[3 §as'%:..£V%€2.é§V§ arm hmasghi E2323 sgme 'ze {ax anger 'ms bégak V' "..ja§$'éS«§Ame§i, '?h€ §§S€$S§€ amiasﬁg aha: we aﬁﬁéiim wag = C'r:§%,: 535923 3:': matggéaf SE": gémré §§:;:'3§ §i§f'§%'E§ the €GL§i'S§ 3%' V geéréhv. fizaé '£53 amauai reps'as*'e;"':_ts ac': i:xz§_§gﬁ a:1i3ta:'2§iI.%2g_ Manse mi: alga that we f:.::ft§3e%::{i":é'» £:}:sa 'giver: b'y¢z:%1eq::e is duéyrefiezztéé in the §os?s::i*«a§. and has ibeerz cenfirfhed by --£hfe*_§3a:rt§;es. a ' c9r:si--derin'g the same deieted th'aE"§3d.iE'§ft§i>°;m 28, The assgssirsg' AA_.aVi;'ih§:<i.§y .ﬁe%--d.........»§hat ' i-;'f?--§=s.:5g.:*::e5s;f§ gmﬁuni sf 'z"3§;_»S8;,3v$§.Tff_j.f--"'Sii%:=2:ﬁ:i1s:V'€ré.ti'ited as dates $35; % v4f?§e _-- 9 %::f %%%§«z/f§3+1%Maw:%5 'mat in * §¥ie;';::e,,, fag the Same: as caéh c %§%::5e1a::%;=e;::=:e;:<; _" i:fTi"i;% v§§::§§;~i§:':'§-T:g%.§§ihs€;r§t}' fat ihait ttée a.p;se§:: sues ';}a'r*:'::*:.s.;:*:t§;r;§,,.A.,4.5.q'%'V' ES: :3 ?3§i,68,,3S?;'~ is his §'a::aur En the "Ledger aacmsnts sf the.-.§_'firma Agcoréirzgfy ihe cenfirmatioﬁ fetter frcsm mntmuing partners that of Sr: NgChandr.;-ﬁt submitted. On further enqu§ries_,.t.h.e_ found that the alleged partnerE":.dehfie:3 made, He aiong with ano:H_ér...partriE3V:% have stated that they are me{e.L:§'a.pe'r,V§,3arfn"er£.....a.n£! did not invest any capita! nor: fmm the said firm at any point, Q1' tfm"e;~. . :';.;5:%£§"c.:nus to prgve that cash on the assessee, since the?' has denéed the same. was cf the azéew that iize s:%0:2éy*V».d_ :§;e yin the fgrm of cash and debt has remameé ég'%§;':ré%;*§é3', éférsgsgf the sgme wag treatéé as :.:§"2e><;3§a§;':e§ Sacifan 58 a? i:%':& Eat. The aggeifaté V '_5:.5:§1§';<§:ys.:¢r;v§"%meé 32$ saéé firming; '%'°?2e "%":"§b:;€%a§ was 3? 25%;»? 553% {Ewe aﬁéééim gamma: be gazsgfamgé sings {@953 " ::%:'as '§::;"mai§r:a§ §i.,§?§f'i§ $23 €SL§£"'SE sf ggamh is Eméiaaie ﬁéiw that the emeutzt received from M;'stHRB Syeéicate is eat genuine and that the tmdisciosed income ;_s..VV_:t0ft~.._be eemputed on the basis ef the materiaf foundl'_:t§':jEét:j§: search. Even atherwisef the ledge;jNaC::ou.;'2't"1:5-eeriﬁ/'».shQv§;s that these are the transactione with HR;f;3..§".S3I':t";..c_i.'ir:..ei:'e' éEj'c?..&t'i1e: payment ef ioan is by way efthaeheqtret 2 Tha'C1flA"1A$<'73lfQV.§:SiOFt -. ' of Section 68 are wheily inapp_i_4i:ta,hiet_Vsinee net a case 91' cash credit, ThaVt*--«the' 'ed«:i_i'tViuciz'2.':v§§=;§;,:re!y based on suspicion and .VaccordiVn~g§y:'~ the<__ deleted the addition, _ .\;t't?'e'v--"Ve«.:fe'.ir';.ﬁ'::v0__r1*:mete agreement with the ﬁndings hhteeetrdeci Veg' the-ftébeeei. The entire meterieé reitetgfeeee .t,h5eV'eeeeeeing efticer is net eaeee ee the éneeteréef §e:..§e'::§._Veeréeg the eeeree ef search' It Se e reeuit ef t?t%':_e'-t'e,:<e':"eE'eet%ehw"eee §t5?t§1€§" enqtettee eaeee ey him ezetch eeteiet the-te'fete term em: easée et eiég §'~'§SE'€G't!§%', the ,_§€<?"§§.€§' eéjeetsete eéeerty eheeze that the ;3'5'§§F?%€ﬁ§ ts ey see? €:>"§he' tfheeee etewe en: a eeiie eemt: end the teeeeeetteee éiw ' MM are that 9:' §v'i;'s.%-ER8 Synéicate, fhe gash creﬁéi E:a§ hem expiainedg Unéer these circumstances, ta <:oncfu§§e::":.E§a~tv it is an unexpiaéned cash credit is wheﬂy The erder passed by the Tribuna:E_.is__jus*;.'éh'::.'.::;;r§'p£§h.V»Vam¢i'A"

does not call for any interferencé, tHé:¥ "L3a'%:%::%;> is answered against the réverjue and' in T'faA\£:§'u--v:.VVVo-*5 thew." assesses;

Reaarding Question E\Jv<3';ff;_ "{1}; gfafrect in faw in de/e£'i}§g':,.L"'*:f§"e"' ":indi§.C'%5s5§§' 'i'.f.icoh7e sf .9 sum of 1;, «mas'::/>e._ biock assessment :'f:'z«§3"':::§;'::--§!z'a§2t'is berzami investment in £!§'&:._;3é::;fs:!?<3~;Sé~--L :3 ;' if; 5&9 :25me $5 $55 i-i,;*vi,Jasf2i _§,s?é :£»':z~;'?éz!:a;ef. E53 '§?*§b;;:§ai"§ apgamacih £1? deleting i"§:é_§sf .;z;?a'i§°c:§:,:§fs{f i}'?C'Q!?'3S is $5365.? azgm maéeriaf .4 ££>fez/gr}? caagééeraéies? :9 §e:;s*€"ai;7 the grem the saézeé matasiai She asgessigeg §§fi§$r " '_;:«£:;:_§%*:'f:*:§ was ihg Eamis a§§@%::§§:g fvizsﬁgmémi ﬁgiiéigréss €é/'W were gurshageé $52 ihe name af Sr: §°H'»'E.§$3§"ai whg' was warkirzg in ihe graup Cameras af the assesseeﬁi%;-- i»&:a%;s contended that the impugned investments wgfé 9f the berrowings of %'6,8Q,OO€_)_,Z:.,_g§ve:{"Efj':'.'§s2Ef:' ﬁght; Mfsﬁemini Distiiieries and the rerv*aairé§:'ng'TV bé':a'_§§c.<é; own sources. The materiaf'km-.._'feco?d__;5@gI:i:.,sh~c§'w' w5a!i§:~1t a " ' sum 9%' €6;.8C!gQQO/~ ways ﬁéﬁi-§.n__i'»I;:*5st§!Ieries behween 2a~5-1993 an$722§:5:§§§;[ §ve¢ pﬁer u3the date ef barrowingf parchased =1 Inns of£aadf§ﬁ§3§~1;;§9§} 3igi}§é9é, 17w5~1993 and 18--5--1993_§u:$§£gg§:gaf{$u5§§mét a Cost Qf %82,QOO/3 %38,GOG%3_ %i5;Qﬁ&;* éng% %9o,500;~ respecﬁveha "§hereaftef"V~.,_:ﬁe: "s*2rEs3%:%:EVé'g7. 333255; were wrshased er:

::~§;;§§3, 25«?{i§93; 2§~?~:g93, iG~i»:9§4 ané . %;§r::§€r ":T§'}€S€ Cﬁrcgzmgiaaces it $3 gear ihai a 3%.:§§€*;g:7%:§;>2§"";'2:§'i:é§*2%".Q'? Ehé isms were §a;%'€?:a$eé ﬁy §'*'§%23GS?"!§ "_.§u*: éf»;%:~§.§ §*s;é§:2 fsmﬁs 552:3? gﬁéy 3 gar: 0? §%: ﬁvzém ihe :7 *--%§é':rr§}.;é;§:i§'§.fmm Gémirzi ﬁistiiierieg, ?'§2e invésimeaz in tééa '_'_ :iég¢':f.iQci:;%%'?tfé.;:'a§ éarzég §'1"§§€§é by SQ %~§¢§'*~*%.3$s%:§ fram iéme E3 iéme wxiwwﬁ «W em: ef his own fumes Cannot be eeestreed te be f"tei_d_ that these feeds were systematicaify purchased by the --:e'Se.e-seee in the name ef Sr? H,M.3oshE. On considering _§'?%~e "

the addition was therefore defet_e.d..__ .é;§ro':~...A V' committed in arriving at this questéon N011 is answered "fe.yourA'e_f'th_e['a:ss'ee'see"end against the revenue' Reaardina Question No.14' 1:4,) is.;jestirié'¢jf'V;n deleting the income'. to tax in the income admitted by assesse'e':Viee:}ff2»e ?e%z3;fe ﬁiea' after the due date ef ef tf%e_feV§ee§"'_;3f inceme and afse efter {fie sfeegﬁch e'eeief::e*:ed £?y five ee;::>e;*tmem'?"

2~3;"--.,_:;%e'e'§.§e:?t§Cei eeestiee Came age fer eeeeéeereﬁee in §'§;e"'s*§e.:;é§8e§f§fii§$S weigh ieede es feffe:e'e:~ emerge: see egeeeeg is' gegiseee 5;; See:

A' ;e.e§e?§e§ éézei fee ieeeeze eezeieiee' by See "ie;e}ee!§e:?€ fr; See {egeier refem fer {fie egge gssessmerzt year 1Q93~94 fa z996=§? E3 is $5 assesses)' as uncfisciased énwme fer {he period under the facts and sircumstansegoif. Case ?

2. xxx .... ,, This Court by its <::rdez* da§ed 5'»é?2Q1U' $f?é.$2«!eV:je.§i the-- = substantiai questions gf law 0f».'ti=:§§g:éA§§§€ssee and against the revenue. : i§iéi\p;~;»g.A:'g;»'!r:ere a return has been filed, the same :§--r:*c§nfe~eV;:.aAﬁ:j{§:£'v;t§§'.':;.ﬁ'5nsidered as an undisclosegg _ iéésessmentg Both Counéglg:'w§;j::;:€%"ii1;¢§§5"jb' sf iaw has since been dated S--4--201O passed in Fm 53$4:':'8%ﬂ*§}i/jig}.€}.'§ .:!l§§~C£C'C.,%€§%f"3§53!' this auestiera :3? $325: is an§§:;e"re§ ﬁr: éf the Judgment ﬁateé §5.@452G1G V_§a§§§éV;>'A.::A:§.:"%.V»'§TA NQ.284G,/2818 gm sazzseqaenééy the '"';:§_:;:'é.§%§>.%§':°;f";;f_ §a§'"§5 arzsweseﬁ in faazauy sf tag agsessee and aga3'%'=:'§§té3--.é§9'a& *~"%'es;e:'::,: e. K 3% 39 Reaaréing Question Noe.:S is 19 "(:59 Whether the 27,47 is right' in..b e1j!af§r2:_§:j:'t;'7'a.§ the capita! gains in the assc§é§§e'e'L:~* &ca&se.;a}fsS!;gVVo:it ' ef the safe of shares elf i{'c::f;%3.:f;e1f:72*: §,f';,_gA Pfantation Limited, Ke}fe«!e, b}eu§j;'?.t £ev:»__'f§\;;X,e,.iz7wV z*.}2e% block assessment cehné: _ be "cekieidefed as undisciesea' income? "

(16) Whether jg .z7:4_f;f_',s' :"';¢;5'¢i;}szon in its a;:»pelfefe &:;T:de.r. ﬁe £€{7e'xe5'eet"--é?/7et~i'he capitai gains broué'<jh1i'_:.e"{"::f" tee: 9E)?-.f3*:f§'e--egeesseee case under the ;'.2!9c!<_ "~é§§&:e:§s;7se.ﬁ2.{r._" :'a:;2--.no:"' be considered as 'sgndis'r:.?gj§'eeT_'f;*2z:é:we-[Es supportable in iaw being ee'3;e'<:ie.r2 e%}?;%':{efi€3f"f'ei[e'se;2, evidence eed meéeriaf _ _wfze%%-.'%he. .esses.sif;g,'%V eefieeriiy as we?! as eepefieie i1'em;??is.S§ene;%__é§:eve eeséefnee' the §€f€ff??§§§€i§ﬁ ' e¥;f_f.?}e«.._Vceei:ef gems en fee eeeée ef f'€§S'i.!§i?i"

;%e§e%:e'§'.e~fe1::zei greeeee eee' meéezief ee referees ﬁe ' 6;: :}?e.:_reseee:;ive erﬁere?

' 3?) Weetﬁer en me feeie eee' eireemseeeeee ef gee szreee {see ?}"§§£i§?§f 55 eeereee 5;? £33.22: 5:: eeieiee tee éraeefer ef seeres re ee we aeeeéée fee 5 ;W~* gesftim {hat the shgreg have beer: érsasferfsd ﬂaring She ﬁzsancfaf year :§95~9?' and §xvhe;;2':',_:°',?;g. Saara' 32' Erectors of five sampany "

ratiﬁed the transfer of shares and such.=:§'%ansfé;g\,:;:: . "'t "

recorded in the registers cf §!»:g=,%»§:a:'s3g:2£3!7;«*-?f "

(18) Whether the Tribuna/ifs :::_<§rreCf.::_:'_::A'iavxeg holding that the transfésfewf shéémg'"ﬁgs-:L:n'i:§f"'fakén piece during financiaf y ¢;-é3=..:1'9.Q6~§.? basis of unsubstantiagii kgsf _ the a»§sessee that the transféfﬂkza/:35; :"Von fzjgryijffgavention of memOra '?ﬁ5'3_? 's'£}??*?¢5'I;?9:«"V:'Vand that EEC?

£onse{2éi.,ha£§"'f:eer§ «given f5v.?j--the ifénsfer of shares? ;j"f§} ﬁf7eéVV.:"Trf1§z;;}ééf V is iorrect in Jaw in }?§!<§i1?g"V 2f!7;«;é'f'-:f{§eT.:f}*¢2T{}§f¢:""of shares is 30 be treated gglwygiaf a§€'f:2 é' .éssé:.§ée has 51:35 §'fV€:'? Eris €§:'?S€f3€'

1. 'fi':'{" 33% £:éja?k*:§fer."':2f..S'f2are§ and azyzézgiimr S§..f€£"? View , 5'assft§§;%xéI§Ea::*'*'"what; 5&5 zfraﬂgfer is acfzjafiy aff&:::ie;§v 35$ eviﬁsai frem ifze rafiﬁgaéiai? af 5,529 {he Swmf Q5 §§F§CiT§!"S' am' 3535:':

A' f:a::§§é%Ebei;2§ {"§§QE"{3"§£3' fr; we camgaayﬁg regigiérg D5535? ?'€€'Sf'§S ?"

%;5::;W-

4:

' _ _ "¥"h§§e q:.1_=e';s'4:§:3z':s gsériiayirz ta §?a§3i%§a'i _g:a'%~:é$ 3:3 ' Eisﬁiés ._'s;afse as-i.s%n»g'. £3122: '_z::»f" i:i';g__ :g:§;'_1g-- _§'3f ¥*?¥/sgii:_ .¥;§t;:h§5&=rma§:§2 #33 tm Lsmitm, if :1? ii'%r% "'~*:'-Qf¥73:5.:{"."5€"¥":a"'¥'.§':0*:!":3 % r"e'f_Er'e n=£:é. to' tha x?§3$*§f's7am'e »'>/;> %%

3. Ezéffzsffrer, as the facts and s!r<:ur??sfsnCes___ ef the C333, that since transfer sf sharss ifszss-__ I._ ssmpfezfscf during the financiaf year :9§~5.e':???__'_ '' gseiez/ant for the assessment year ,2 997~9i§_fso * - H 53 be assessable in the e2ssesfs.:::.f's;__::as:3," 'f5e=s'.I§a.1:%; sf €20 /akhs was net liable be-..»s%x}:iu£1afé'd' 7fr:jf2éj-~s..__ AA she Cemputation of sud; Ca,¢%ita'!"-..gains,..1;€r:tfife black sssessmeni*?"

This Caurt by its answered the substantiai questions assesses and against the fwsﬁtsmitted that these Vs:é:§Vn::%§answered by the saicf order daéftea km rm Neizewzoae and Csnnssted 'matters; }5a.%;<;<>V:;&;§.»§:2:g§32 these qazestécms sf éaw are a2*:s:a;e;:*e*:§s..%r2 Vté';~.:é;}_fscf:t?:e Egségmerst dated 33,314,233:

3Gi§,f2QG5 ass gezmesied matters 52% £'i<;:s%f;'s¥$§_:i§3's"z:1'é'§%:--%_'_':::§§es:§ss féssséﬁ is 3% are asswsrss is _P _§sa;G:s'ir. i0§v=.:?%eva7'sssssee 352:3 agaésst Essa zsvssage, w%%w 23; §%-ﬁg" 25$ 8§Gf'ES8§§ rsasarésf Q§fES§iQf'1 N93. 1 :5:

ii 9, :2 and 3.3 are answered in favgur 3%' the RSVe§":L§e €:§::f'§_§;_ against the assessee. Question N93. 8, :8; 11 is 19 are answered in favour at' the assessee " the Revenue, . :: 4%'\\\\\\ Rsk/»~

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Karnataka High Court

The Commissioner Of Income Tax vs Late Sri H R Basavaraj on 15 July, 2011

Bench: V.G.Sabhahit, Ravi Malimath