Karnataka High Court
The Commissioner Of Income Tax vs M/S Far East Agencies on 13 April, 2010
Bench: K.L.Manjunath, B.V.Nagarathna
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 137" DAY OF APRIL, 2010 ._
PRESENT
THE HONELE MR. JUSTICE K.L.MANJu:$iAT'iAT.' A.
AND
THE HON'BLE MRS. JUSTICE B._V.
mm. No.1Sg_/2005 C'/W. A
I.T.A.NOS.1562 "i-'vQ*~1565 or 2095 "
BETWEEN:
1. THE c0MMISS101§%EE--oE__
INCOME TAX " T '
2. *iHE1.ASS'1"'V.T.C3C§'1w1$/i'ISS£0I~JER OF
INCOME 21(1)
*-'.OR}?3_ F
. .. APPELLANTS
A 1' ARE COMMEN IN ALL CASES]
L {EP3y"Sr1:._M VSESHACHALA. ADV.)
Am
M /S EAST AGENCIES
f'JASM1;¢E"
~ 0109.,' COLACO HOSPITAL
' BEEXIDOREWELL
'MTANIPAL-575 002
... RESPONDENT
[RESPONDENT NAME IS COMMEN IN ALL CASES} (By Sri: S PARTI-LASARATETI, ADV.) y; I ITA 1561/2005 filed u/s 260 A of I.T.Act, 1961, arising out of Order dtd: 26--10--O4 passed in ITA No.l373/Bang/2003 for the Assessment Year 1996-97 praying that this Horrble Court may be pleased to:
i. Formulate the substantial questions of law stated ii. Allow the appeal and set~aside the order passcdl"oy*.e.th.e ITAT Bangalore Bench 'B' in lTA.No.1373/BaI1g.,?:20'03jda'ted"
26-10-2004 and confirm the order passed by the Assessing; Authority etc., in the interest of justiceand equityf . 0' ITA 1562/2005 filed u/s 7t2e0yATilof,i.T.A¢t;'[;=1.9e::1{ arising out of order dtd:_ 15~41»O¥0»§L pas_sed= '~in'=.4"lTA'--.Vp No.1371/B/O3 for the Assessment Year .l9'3v4~9'5-v...praying=.' that this I-Ion'ble Court may be "pleased to': "
i) Formulate the suebstantial qu"es.tions§ of law stated the1'??I1i ii] A scetlaside the order passed tttt tlie' {TAT Bangalore Bench in ITA _ -1\io;"13'*Zl/B/21003'dated 1540-2004 and confirm « the order..~by the Assessing Authority. V _ l'I'A C1503,/2005 filed under Section 260A of the Income Tax Act; .1961 arising out of order dated 15-10-2004 "v..passsedi..fin 'vi-lTA.No.V1'3'7'2/B/2003 for the assessment year » l995--l.,996vpraying that this Hon'ble Court may be pleased " 1) A ---for:-Inulate the substantial question of law stated ._ diherein
ii)' allow the appeal and set aside the order passed 0 by the of the Income Tax Appellate Tribunal, as prayed for therein.
ITA 1564/2005 Tiled u/s.260--A of I.'F.Act.1961, "arising out of order dtd:15-10-04 passed in ITA i\Eo.l374/B/03 for the assessment year 1997v~98, praying that this Horrbie Court may be pleased to: E ./1' W3-
i) Formulate the substantial questions of law stated therein.
ii) Allow the appeal and set aside the order passed by the ITAT Bangalore Bench 'B' in ITA No.1374/B/03 dtd:15--10--04. .
rm 1565/2005 filed under Section 2ee--A; Income Tax Act, 1961 arising out of order dated "I5.-.y1pO%2001i 4_ passed in I'I'A.No. 1375 /B/ 2003 for the _a~sse_ssIn'ent«. year = .. 0' l998~~1999 praying that this Hon'ble' Co.upr1';A miayllée pleased i] formulate the substantial epiestion law therein ' _ . 0' ._ ii] allow the appeal "set aside theforder passed by the of the Incomeffaxi..Appe1I'atef"Tribunal, as prayed for therein. 0 Theseg...:"iTAs::f:A: "coining gigs HEARING this day, Nagarkcithriri J. ,-"del_i'Vered _ the following 'V gfQJoneMENT These appeals Ahave.~'0'been preferred by the revenue by chali;engii7.g the"--'orc:i_eI dated 15.10.2004 passed by the » appellatey '<.ht:r_fibunal in ITA.Nos.1373/Bang/2003, H 137.1'/iéafig/2o'o3, 1372/Bang/2003, 1374/Bang/2003 and 2003 respectively by raising the following by substantial questions of law:
i) 'Whether the First Appellate Authority and tribunal were correct in ignoring the evidence tendered by the assessee under Section 131 of 4;»:
iii)
iv) VIVVVV 4 VVVIIV the Income Tax Act and can the said evidence be overlooked or ignored?
Whether the evidence tendered by an assessee under Section 131 of the Income Tax Act.is- equivalent to Section 58 of the _ Act, 1872'?
Whether tribunal was correct innotAhol'ding_'_th,at provisions of Section and:
is attracted to the theac-a Whether First:.'yAA}5._peVllate Authority and Tribunal W(§V1'V(_3.7' the factual atvmbvy the Assessing Officer «contra'ry~to the records?
Theusep la.ppea1s.. pertain to the assessment years A the respondent and durmg the course 199qi}s5e't.o iséstso. .
' ' .3. - facts leac'i'ing to the filing of these appeals are that the: is a partnership firm dealing in on wholesale basis. On 7.1.1998, a survey 1'._V'WaS coziducted by the Department in the business premises of survey, the 3».
following amounts were found to be credited in the names of various creditors in the books of the respondents:
Assessment Year Amoanitiv p 1994-95 7 1995~96 '>.,_Rs 5,4:3;3;o9..., 'T; if 1996-97 R§.5,i2,o98:
1997298 13,240
4. The by issuing notice the Assessment Year 1994-95" order on 11.3.2002 by makingzan' of Rs.17,79,051/-- on account of unexp1aineds_fcas1i' credits. Aggrieved by the said order, the " V"=.assessee=.pre.ferredand appeal before the Commissioner of r_t_ine;onie::TaX"L/flppeals] which was aiiowed by order dated f revenue challenged the said order before the "i.,ptribunaiyL'hich by its order dated 15.10.2004 dismissed the of the revenue. Being aggrieved by the said order, thiese appeals have been preferred by the revenue by raising the aforesaid substantiai questions of law. a _ 5 _
5. We have heard the iearned counsel for the appeiiant and the learned counsel for the respondents and perused the material on record.
6. It is submitted on behalf of the appellant that the respondent--assessee has sought to explain the seQurce._V_of funds to an extent of Rs. 16.00 lakh as being credited" .
name of the mother of one Gerard D'souza{"~.vby..V:name; it l\/Irs.Dorothy D'souza and that a.fte1i Mrs. Dorothy D'souza, the said4__fund's._h'ad in the name of Gerard D's0uz'a*and._in oi} the said fact étbeenfiled b'3V}VVGerard D'souza.
7. However, it .i's..tthev4c'on"tenltion of the learned counsel for the appellant that contents of the affidavit are contrary to the recordsuandvtherefore, there has been no explanation the cvasheredits and hence, the tribunal was not justified the appeal preferred by the revenue by placing"~-Vreliance on the affidavit of Gerard D'souza by the rcspondlent-assessee. He therefore, submits that on a G of the records of the respondent~assessee, the same "do not tally with what has been mentioned in the affidavit fie».
and hence, the tribunai without considering these aspects could not have dismissed the appeal filed by the revenue.
8. On behalf of the respondent--assessee it that late 1V£rs.Dorothy D'souza had made names of several persons in the~'re'spnnd'ent:assesse'e[firm and that she had stated that afterltttrertdieathii should be credited in the nVamié~..Vpf her .son_VG..f3rard"'Dsouza" V and that the said fact is evide-ntjfrorfz~..§he aftida.vi.t'§of Gerard D'souza which has been rightly Vibythe tribunal and the said ordertdoes §nVot"_"1'o:r1-.a11Vy «tzinterference in this appeal. QQQQ U 1. -
9. E~1aV'ing heard4'the't'qoVunsel for the parties, the question that arises for V'Qur..Con}eideration is, as to whether the resga«ondent--ass'e.ssee «has effectively explained the cash . Credits rnade"~-in the name of various persons in the assessee aperusal of the affidavit of Gerard D'souza, no 'doubtdit is apparent that his mother had made certain "investments in the respondent~assessee firm, but the actual V' " "extent of investment and also the names of the persons in respect of whom the investments had been made are not apparent in the said affidavit. All that it states is deponent 1.e., Gerard D'souza was entitled Rs.l6.00 lakh after the death of hi.s..mrotherillV'E*iojweverrth.e'Ait details as to whether the investmentfoi"
made at one instance or at several points (if time as'to inn ' whose names the 1nvestments__vv'ere -1nade.'1s_not clear from the perusal of the records. _ A isgbep noted that if the investments hadto be D'souza in the names of several Epersoris, :'then_ there isho material from the records of the5a;ssesisee.4as.lto how the investment made in the names of several persohsdlwere consolidated in the name of Gerafd D'sld1L1'5é' to'."an".eX'tent of Rs.16.00 lakh. No letters " _iss'ued 3;.)-32* Mrs.Dorotl1"y'VD'souza in this regard to the assessee or::a;§y..£e.s:§:;--j4t1on passed by the said firm are not placed on record ,' l " ti, "ii " 1_1V.l" "~_.The tribunal however, without going into these aspects ' the matter has merely recorded that the source of cash credits have been properly explained by the assessee in the form of affidavit from the creditor which is a known source of income. The tribunal has presumed that these creditors /3 were all coffee planters who had substantial income and they had invested the same in the name of respondent--assessee's firm. We find that in the absence of consistency between the records that have this court and the contents of the"affidavit,the._trib--unalp could not have presumed that the by of the affidavit Gerard D'soulza.'Vp:leiiplains the or"
investments made in the respondent.--fir-in.
12. Under the Vcircuniystaiicesi proper to set aside remand the matter to the tribnnalmentire issue in the light of the records tiiatare relvevantllto the assessment years and in the =._ligl'Z|':fi5":'0l;:--.'lVl1< hasbeen stated in the affidavit of Gerard ptD'so'i;1za=.anfl"thereafter come to a conclusion as to whether lathe cash credits have been explained by the respo1i.der;1t¥assessee. Hence, the substantial questions of V' v»}.aWt'ra1sed in this appeal need not be answered. Accordingly, the' 'appeal allowed and the matter is remanded to the hlvflssessing Officer to reconsider the entire issue after giving fix Wlgw an opportunity to both sides and pass an order;»ifi~. '~. accordance with law.
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