High Court Of Gujarat
DCIT vs. Radhe Developers India Ltd.
Section 158BB, 69C
D.A. Mehta & S.R. Brahmbhatt, JJ.
Tax Appeal No. 171 of 1999
1st April, 2009
Counsel Appeared :
M.R. Bhatt with Mrs. Mauna M. Bhatt., for the Appellant : S.N. Soparkar with Mrs. Swati Soparkar, Ms. Niti Sheth & Ms. Pouromi Sheth, for the Respondent
JUDGMENT
D.A. MEHTA, J. :
Originally the Appellant herein had preferred Special Civil Appln. No. 1708 of 1999 challenging order dt. 15th Jan., 1999 made by Tribunal, Ahmedabad Bench ‘B’ in IT(SS)A. No. 103/Ahd/1997 relatable to block period :
(i) 1st April, 1985 to 31st March, 1995 and, (ii) 1st April, 1995 to 14th March, 1996. The High Court, after hearing the parties, vide order dt. 28th April, 1999 came to the conclusion that the preliminary objection as to maintainability of the special civil application was required to be accepted and the petitioner was directed to avail of statutory remedy available under the provisions of s. 260A of the IT Act, 1961 (the Act). The petitioner was permitted to convert the petition into tax appeal and permission was also granted to propose substantial questions of law stated to be involved in the case.
2. Accordingly, the appellant herein, proposed 22 questions and the respondent herein also proposed two counter questions. Accordingly, vide order dt. 10th May, 1999 the appeal was admitted on following 22 substantial questions of law formulated by the High Court as framed by the appellant. The High Court also formulated two additional questions as suggested by the respondent by the same order :
“1. Whether the findings of the Tribunal that there was no material brought on record to show that the assessee would not have included the undisclosed income in the Return for regular assessment is perverse in as much as the assessee has itself admitted that such undisclosed income had not been recorded in the books of accounts and such income had also not been included in the accounts as reflected in the annual reports for the relevant financial years which had been produced by the assessee ?
Whether Chapter XIV-B of the Act prescribing special procedure for assessment of search cases contemplates setting off of losses incurred by an assessee in the part of the year after the block period, from the undisclosed income of the block period ?
Whether the report of the CIT to the Settlement Commission justified the conclusion of the Tribunal and could at all have been taken into account by the Tribunal for concluding that all the additions made were to be considered on the basis of unsustainable surmises and conjectures, particularly when the Settlement Commission had after considering the report and relevant matters concluded to the contrary ?
Whether in the facts of the case, the investment by the assessee for the purpose of owning the development rights of the subject land could be taxed only as unexplained expenditure under s. 69C of the Act as held by the Tribunal and not under s. 69B as unexplained investment ?
Whether the Tribunal was justified in law in permitting deduction of the undisclosed payment by the assessee for acquisition of development rights in the subject land from the undisclosed receipts by it on allotment of plots in the same land when the assessee had itself not treated that portion of the payments disclosed in its books as expenditure and nor had it sought to deduct the same from the disclosed receipts ?
Whether the assessee is entitled to a deduction under s. 37 of the Act of undisclosed payment of Rs. 12.80 crores paid in cash for acquiring development rights in the subject land from the undisclosed receipts from members for allotment of plots in the said land as held by the Tribunal ?
Whether undisclosed payment for acquisition of development rights in the subject land by the assessee when it had no unknown sources of income could be treated as having been explained for the purposes of s. 69B or s. 69C of the Act by subsequent undisclosed receipts on sale/allotment of plots in the said land ?
Whether the finding of the Tribunal that undisclosed payment by the assessee for acquiring development rights in the subject land was not Rs. 20,55,86,000 as found as a matter of fact by the AO on the basis of relevant documentary and oral evidence, but only Rs. 12,41,57,296 to be taken as Rs. 12,80,00,000 being the sum admitted to have been paid by the assessee, was a finding contrary to the evidence on record and, therefore, perverse ?
Whether the Tribunal was justified in accepting the bare, unsupported assertion by the assessee of having undisclosed receipts of Rs. 12,80,000 wholly ignoring the finding of the AO based on relevant oral and documentary evidence that the assessee had received a sum of Rs. 19,00,000 as on-money for sale/allotment of 5,68,000 sq. yd. of land ?
Whether the finding of the Tribunal that the assessee had taken possession of only 7,50,000 sq. yd. of land and not 11,11,000 sq. yd. as determined in the assessment order, based solely on a photostat copy of an alleged development agreement dt. 16th March, 1995 which the assessee itself through Shri Ashish Patel, the managing director of assessee-company, admitted had not been executed in the statement dt. 14th March, 1996, was a finding based on inadmissible evidence and contrary to the oral and documentary evidence on record which indicated that the assessee had made payment for all the three sectors aggregating to 11,11,000 sq. yds. of land ?
Whether merely recording of receipts of Rs. 99,35,200 and Rs. 4,00,000 in the books of account of the assessee would necessarily exclude it from the purview of undisclosed income though such receipts could not be substantiated as regards person or amount as found by the AO who brought the said amount to tax as unexplained credit under s. 68 of the Act ?
Whether the Tribunal was justified in deleting unexplained investments which were established as a matter of fact by the AO from documents and papers seized from the assessee as well as by independent sources ?Whether block assessment cannot be made when regular assessment is due as held by the Tribunal ?
Whether the Tribunal was justified in law in adopting dual standards in dealing with the additions made by the AO to wit, deleting additions in paras 16.1 and 15.7 of the assessment order on the ground that the income would have been disclosed in the regular return while not applying this principle to the addition of Rs. 20.55 crores, granting deduction of payment of Rs. 12,80,00,000 to the assessee while deleting the same as not being proved in the assessment of the recipient ?
Whether the Tribunal was justified in law in concluding that the undisclosed income of the assessee in relation to the transaction of Shela land would be nil ?
Whether the Tribunal was justified in law to allow a further deduction of Rs. 12.80 crores from the net income of identical amount disclosed voluntarily as being the income of assessee-company by Shri Ashish Patel, the managing director of the assessee-company, in his statement under s. 132(4) of the Act recorded on oath on
1st May, 1996 in the course of search. Whether the Tribunal was justified in law in completely overlooking the said statement of dt. 1st May, 1996 and in effect allowing complete retraction thereof without any basis.
Whether the Tribunal was justified in law and on facts in allowing set-off of Rs. 12.80 crores as expenditure against receipts of equal amount in total disregard to the principles of accounting. Whether the Tribunal was justified in law in changing the nature of additions of Rs. 99.35 lakhs and Rs. 4 lakhs from the case of a 12 ‘fictitious booking’ to that of ‘deposit verification’. Whether the finding of the Tribunal holding the testimony of Shri Ashish Patel, the managing director of the company, in the context of allowing deduction of Rs. 12.80 crores to the assessee, as reliable, was not a finding contrary to Tribunal’s own decision in the context of same transaction in the case of Shri Manoj Vadodaria where the testimony of Shri Ashish Patel was held unreliable and therefore, perverse. Without prejudice to the above, whether the Tribunal has not committed a gross error in law in the allowance of deduction of payment of Rs. 12.80 crores made by the company in cash to an unidentifiable and unverifiable person in gross violation of the provisions of s. 40A(3). Whether the Tribunal was justified in deciding the issues respecting additions of Rs. 4.51 crores, Rs. 1.50 crores and Rs. 70 lakhs in the hands of the company without having first decided these issues in the hands of Shri Ashish Patel as these additions in the case of assessee-company were only of consequential nature.
” Following two additional questions have been suggested by learned counsel for the respondents :
“1. Whether the Tribunal is justified in not deciding the contention of t18he respondent that payment made for development rights acquired was not an investment made by the respondent nor an expenditure incurred by the respondent as the same was sourced from collection made from members and hence not income of the respondent. Whether payments made of Rs. 12.80 crores being expenditure incurred for development rights acquired and sourced from collection made from members ought to have been allowed as deduction under s. 28 of the IT Act?”
On 14th March, 1996 search and seizure proceedings under s. 132 of the Act were initiated at the business premises of the respondent company along with residential premises of one Shri Ashish Patel, managing director of respondent company and one Shri Arun B. Shah, an employee of the respondent company. In response to notice under s. 158BC of the Act return of income declaring nil income for the block period was filed on 21st March, 1997. Respondent Company is engaged in business of land development and allied activities, having come into existence in the previous year relevant to asst. yr. 1995-96. After hearing and recording statement of Shri Ashish Patel and after analyzing the 18 seized documents as well as the seized books of accounts of respondent company, assessment was framed on a total undisclosed income of Rs. 28,30,21,200 comprised of : Rs. Investment of Shela land 20,55,86,000 Booking of plots in fictitious name 99,35,200 Under s. 68 of the Act
4,00,000 Unexplained investments. 118,50,00,000 Unexplained investments. 70,00,000 Unexplained investments. 4,51,00,000 The assessee carried the matter in appeal before the Tribunal and vide impugned order succeeded.
4. After hearing the learned counsel for the parties, the Court has found it necessary to reformulate the questions to bring out the correct controversy between the parties. Such reframed questions are :
Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in deleting the addition of Rs. 20.55 crores made as undisclosed investment for acquiring development rights ?
Whether, the Tribunal is right in law in holding that the transaction of acquiring the development rights can be taxed only under s. 69C of the IT Act, 1961 and not under s. 69B of the Act ?
Whether, the Tribunal is right in law in holding that the amount of undisclosed income taxed under s. 69C of the Act could be correspondingly deducted under s. 37 of the Act ?
Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in deleting addition of Rs. 99.50 lacs and Rs. 4.00 lacs made by the AO as unexplained credits under s. 68 of the Act ?
5. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in deleting additions of Rs. 1.5 crores, Rs. 70 lacs and Rs. 4.51 crores ? In relation to the first addition, it is the case of the AO, that the assessee company had made an unexplained investment for acquiring land located in Shela village and described as Radhe Acre 1 and Radhe Acre 2. That the assessee had entered into a transaction involving total land area to the tune of 11 lacs sq. yds. and this was on the basis of loose papers file ‘A-3’, more particularly page No. 103 of the said file, which was found from the residence of Shri Arun B. Shah, the employee of respondent company. According to the AO, the claim made by the assessee that in fact the transaction had taken place only as regards 7 lacs sq. yds. of land and not the entire 11 lacs sq.yds. of land, was not accepted because of seized documents. The AO also disbelieved the statement of Shri Ashish Patel wherein it was stated that only 7 lacs sq.yds. of land had been acquired by way of development rights and the balance land had not been made available to the assessee company as per the terms of the agreement with Shantinagar Shela Co-operative Housing Society. The AO held that the assessee having failed to bring any confirmation account from M/s Shantinagar Shela Co- operative Housing Society the assessee company was granted development rights only for 7 lacs sq. yds. an irresistible conclusion could be drawn that the assessee acquired development rights of total land admeasuring 11.11 lacs sq. yds. @ Rs. 226 per sq. yd. during the relevant period. The AO therefore worked out the investment at a sum of Rs. 25,10,80,000 as being unexplained investment and added the same under s. 69B of the Act. According to the AO the aforesaid amount would include a sum of Rs. 12,80,00,000 disclosed as receipt of on- money by Shri Ashish Patel as per statement dt. 1st May, 1996. Simultaneously, the claim made by the assessee that a sum of Rs. 12,80,00,000 was paid for acquiring development rights of 7 lacs sq. yds. of land was not believed by the AO and the claim of deduction denied.
The assessee carried the matter in appeal before the Tribunal. The Tribunal for the reasons stated in its impugned order, came to the conclusion that the addition for undisclosed receipt had to be sustained only to the extent of Rs. 12,80,00,000 as accepted by the assessee and there was no basis for making addition to the tune of Rs. 20,55,86,000 as the assessee had acquired development rights only in relation to 7 lacs sq. yds. of land and not 11.11 lacs sq.yds. of land. At the same time, the Tribunal also recorded that amount of Rs. 12,80,00,000 paid by the assessee for acquisition of development rights had to be treated as allowable deduction under s. 37 of the Act.
The learned senior standing counsel appearing on behalf of appellant-Revenue assailed the aforesaid order of the Tribunal, principally on the ground that the impugned order suffers from vice of perversity, the Tribunal having ignored various pieces of evidence and made factually contradictory statements. That the Tribunal had wrongly relied on the report of CIT filed before Settlement Commission. In relation to certain observations made by the Tribunal various submissions were made, including relying upon audited accounts, to submit that the Tribunal had proceeded on an erroneous presumption and thus the order was vitiated. On merits it was submitted that the AO had given cogent reasons for working out the addition of undisclosed receipt at a sum of Rs. 20,00,00,000 and odd but the Tribunal had restricted the same to a figure of Rs. 12,80,00,000 without assigning any reasons for reducing the said figure. It was further pointed out that the Tribunal had taken note of the statement made by Shri Ashish Patel but not correctly appreciated the same in as much as it was an accepted position that payment of rupees eight crores and rupees seven and half crores for sector No. 1 and sector No. 2 were respectively made for acquiring development rights but the Tribunal had restricted the said figure at a sum of Rs. 12,80,00,000 and thus the order of Tribunal was not only bad in law but perverse as being divorced from facts.
7.1 In relation to the addition made and sustained by the Tribunal under s. 69C of the Act, it was contended that the case of Revenue was only under provisions of s. 69B of the Act and there was no question of any unexplained expenditure having been incurred which was to be added back. The Tribunal had failed to appreciate the basis of the addition made by the AO and thus had wrongly converted the said basis by invoking and applying the provisions of s. 69C of the Act. In support of the submission made, reliance was placed on decision of this Court as reported in case of Fakir Mohmed Haji Hasan vs. CIT (2001) 165 CTR (Guj) 111 : (2001) 247 ITR 290 (Guj), to submit that any addition made under provisions of ss. 69, 69A, 69B and 69C of the Act would not permit the corresponding deduction under any other provisions of the Act as the said group of ss. dealing with deemed income do not fall under any of the heads of income enumerated in s. 14 of the Act. According to the learned counsel, therefore, the Tribunal had erred in granting corresponding deduction of Rs. 12,80,00,000.
7.2 In relation to the second addition of Rs. 99,35,200, it was submitted that the AO had found that allotment letters had been issued to various allottees but addresses of the alleged allottees were not available as could be seen from loose papers found in the file Annex. A/29 and A/30 seized from the office premises of the assessee company. That after making inquiries, it was found that one Shri Naresh Patel had booked only four plots, as against that documents revealed that 11 plots were allotted to Shri Naresh Patel and therefore, the AO had arrived at a conclusion that the persons enumerated in para No. 15.6 of the assessment order were fictitious persons and allotment money/booking amount stated to have been received from such persons, was to be added under s. 68 of the Act as unexplained credit in the books of account of the assessee company.
7.3 Similarly insofar as addition of Rs. 4,00,000 is concerned, as recorded by the AO, though the amount had been shown to have been received in cash towards booking of plots, the amount had been returned to the said party by cheque and hence, same was rightly added as unexplained credit brought in the Books of Account through cash under s. 68 of the Act. It was submitted that the Tribunal had wrongly deleted the addition in question because it was always open to the AO to make addition on the basis of inquiries made after the search.
7.4 In relation to the remaining three additions of Rs. 1,50,00,000, Rs. 70,00,000 and Rs. 4,51,00,000 it was submitted that loose paper file Annex. A1 which was seized from residence of Shri Ashish Patel contained parallel balance-sheet as could be seen from page Nos. 1 and 18 of the said file and the said pages contained following three references : (a) Manoj—1,50,000.00 (b) Shikhar—70,000.00 (c) 154—4,51,000.00 That the aforesaid amounts had been added by the AO after recording statement of Shri Ashish Patel and thus was required to be retained, the Tribunal having wrongly deleted the same.
8. The learned senior advocate appearing on behalf of the respondent-assessee at the outset submitted that all the issues raised in the appeal were based on facts and appreciation of evidence on record and the impugned order of Tribunal did not give rise to any substantial questions of law. It was submitted that insofar as the principal addition is concerned, the Tribunal has found as a matter of fact that the assessee company had received booking amount of Rs. 12,80,00,000 which was accepted by Shri Ashish Patel in his statement and offered for taxation. That there was no basis to enhance the said figure in absence of any corelation with the seized material to indicate any such enhanced receipts. It was submitted that the agreement between the parties had been noticed by the Tribunal and thereafter the Tribunal had found as a matter of fact, that possession of sector No. 3 was never handed over to the assessee. As such possession had to be handed over only after possession of sector Nos. 1 and 2 and procedure thereof was complete. That taking totality of the circumstances, the Tribunal had found that the amount of payment as well as area of land for which development rights had been acquired, had not been correctly determined by the AO. The Tribunal had rightly come to the conclusion that the addition was required to be made only under s. 69C of the Act and consequently reduction under s. 37 of the Act was rightly granted to the assessee.
8.1 It was also submitted that in fact provisions of ss. 69B or 69C of the Act would not be attracted in the facts of the case because once undisclosed receipts were known and quantified the only question that survived was whether a corresponding deduction was available to the assessee considering the business of the assessee and the payment made for acquiring development rights. In other words, it was submitted that this was not a case where source of income or expenditure was not known and, therefore, no addition under any of the deeming provisions could have been made. Referring to decision of this Court in the case of Fakir Mohmed Haji Hasan (supra) which was relied upon by the learned counsel for the Appellant, it was submitted that in a later decision in the case of Krishna Textiles vs. CIT (2008) 220 CTR (Guj) 568 : (2008) 11 DTR (Guj) 217 : (2009) 310 ITR 227 (Guj), this Court had categorically found that the observations made therein were obiter in relation to provisions of ss. 69A, 69B and 69C of the Act, as the dispute was only in relations to provisions of s. 69 of the Act. It was also submitted that as laid down by the Supreme Court of India in the case of CIT vs. D.P. Sandu Bros. Chembur (P) Ltd. (2005) 193 CTR (SC) 578 : (2005) 273 ITR 1 (SC), ss. 14 and 56 of the Act constitute a complete Code for the purpose of determining under which head a particular income would be taxed and, therefore, once an income is included under any one of the heads, it could not be brought to tax under the residuary provisions of s. 56 of the Act.
8.2 In relation to two additions of Rs. 99,00,000 and Rs. 4,00,000, it was submitted that Tribunal had found as a matter of fact that the same were based on entries recorded in regular books of account and thus were outside the scope of special provisions for assessment of block period and had to be considered only in regular assessment as held by this High Court in the case of N.R. Paper & Board Ltd. & Ors. vs. Dy. CIT (1998) 146 CTR (Guj) 612 : (1998) 234 ITR 733 (Guj).
8.3 Similarly, in relation to the remaining three additions of Rs. 1,50,00,000, Rs. 70,00,000 and Rs.51,00,00,000, it was submitted that Tribunal had found, after appreciation of evidence on record, that the explanation of the assessee that these were mere projected budgetary figures and were not reflecting actual transactions and thus no addition was warranted. That this was a pure finding of fact and was not required to be interfered with.
9. In rejoinder, learned senior standing counsel for Appellant-Revenue referred to a decision of this Court in the case of Gautam Harilal Gotecha vs. Dy. CIT (2006) 200 CTR (Guj) 139 : (2006) 281 ITR 283 (Guj), to submit that the Tribunal being final fact finding authority the impugned order had to be reasoned and speaking order and if there were apparent contradictions the same would be a perverse order entitling the High Court to interfere. It was further submitted that it was always open to the AO to make further inquiries in light of provisions of s. 158BB of the Act and make appropriate additions thereafter as held by this Court in the case of Cargo Clearing Agency (Gujarat) vs. Jt. CIT (2008) 218 CTR (Guj) 541 : (2008) 307 ITR 1 (Guj). Lastly, it was submitted that as there was apparent conflict between two judgments of this Court rendered by Co-ordinate Benches as in the case of Fakir Mohmed Haji Hasan (supra) and in the case of Krishna Textiles (supra) on the issue of interpretation of provisions of s. 69C of the Act, the matter was required to be referred to Larger Bench.
10. The facts are not in dispute. In fact, when one reads the orders made by the AO and the Tribunal in entirety, the only dispute is in relation to the same set of facts being read and interpreted differently by the two authorities. Thus, in effect, it can be stated that the AO has arrived at one conclusion on the basis of same set of facts and evidence on record, whereas the Tribunal has recorded a different conclusion. Nonetheless the issue is only factual and based on appreciation of evidence only. It is not possible to accept the contention that any issue of law, much less a substantial question of law is involved in the present proceedings. The only issue of law, if one can term it to be so, is as to whether the impugned order of Tribunal suffers from vice of perversity.
11. In relation to the first addition, when one goes through the entire assessment order and the impugned order of Tribunal, it becomes apparent that neither the AO nor the Tribunal disagree on the issue, namely, disclosure of receipt of on money to the tune of Rs. 12,80,00,000 having been received by the assessee company towards booking amount for plots in the Scheme known as Radhe Acre 1 and Radhe Acre 2. The only point of diversion between the two is, as to whether the assessee has received anything over and above Rs. 12,80,00,000 as disclosed by the assessee. In this context, the reasoning adopted by the AO is based on the documents seized from the residential premises of Shri Arun Shah, employee of the assessee Company, which is recorded in Gujarati and has been reproduced in para No. 12.3 of the assessment order as under : Shelani tamam 11,11,000 vaar jaminno bhav rupaya dho so chhabis choras vaarno raheshe. Koyie bhav vadharo nahi. On a plain reading of the aforesaid extract, the only thing that transpires is that, the entire 11,11,000 sq.yds. of Shela land is contracted to be transacted @ Rs. 226 per sq. yd. and nobody will be entitled to raise the price. Thereafter, as recorded by the AO, other terms and conditions of the agreement between the parties have been recorded. It is not in dispute that the agreement contemplates handing over the possession of land falling in sector 3 only after the transaction relatable to land falling in sector Nos. 1 and 2 is complete. It is not even case of the Revenue that there is any evidence to disprove the statement made by Shri Ashish Patel and the assessee company that possession of land falling in sector No. 3 was not handed over. The only basis of the AO to compute the price is the entry made in regular books of account regarding payment to M/s Shantinagar Shela Co-operative Housing Society @ Rs. 40 per sq.yd. and the inference drawn by the AO by adopting said rate as multiplier in relation to the entire parcel of land admeasuring 11.11 lacs sq. yds. after deducting amount of Rs. 1,55,00,000 as recorded in the books, the AO has made addition to the tune of Rs. 20,55,86,000. In this context, the Tribunal has recorded, after appreciating the same set of evidence in the form of documents viz. seized material, that Annex. A3 seized from residence of Shri Arun Shah only contains the payment schedule and no amount was actually paid. The Tribunal has therefore, after taking totality of circumstances into consideration recorded that both, as regards the area as well as amount of payment and the point of payment, the Department has not been correct in discarding the version putforth by the assessee as supported by documentary evidence. Therefore, the only issue is, as to whether such a finding can be termed to be perverse. For determining as to whether a particular order suffers from vice of perversity or not, the well settled parameters may be applied to the facts of the case. This is not a case where relevant evidence has been ignored and irrelevant evidence has been taken into consideration. The only test that is thereafter required to be applied is: whether on facts found and the state of evidence on record the conclusion arrived at by the Tribunal is one which could have been arrived at by a reasonable person properly informed in law. Applying the aforesaid test, it cannot be said that the decision recorded by the Tribunal is one which could not have been arrived at by a reasonable person properly informed in law considering the state of evidence on record. Hence, insofar as the addition to the extent of Rs. 12,80,00,000 being upheld by the Tribunal is concerned, no interference is warranted and Revenue cannot succeed on this count.
Insofar as the connected issue regarding deduction of the amount paid for acquiring development rights is concerned, suffice it to state that initially, onus was on Revenue to point out that such payment had not been made or that the amount of payment differed from the aforesaid figure of Rs. 12,80,00,000. Neither from the seized material nor from any other evidence recovered during the search proceedings has the Revenue been in a position to point out any such difference viz. either there being no payment, or the payment being at variance with the amount claimed by the assessee. The Revenue does not dispute the fact of acquisition of development rights. It is not the case of the Revenue that the said development rights were gifted by the Co-operative Society to the assessee. In the circumstances, if the Tribunal has stated that the amount of payment towards acquisition of development rights has to be deducted even if provisions of s. 69C of the Act are attracted, no infirmity can be found in the order of the Tribunal. Admittedly, Proviso inserted below s. 69C of the Act has been made effective from 1st April, 1999 as inserted by the Finance (No. 2) Act, 1998.
The decisions of this Court in the case of Fakir Mohmed Haji Hasan (supra) and Krishna Textiles (supra) are neither relevant nor germane to the issue considering the fact that in none of the decisions the legislative scheme emanating from conjoint reading of provisions of ss. 14 and 56 of the Act have been considered. The apex Court in the case of D.P. Sandu Bros. Chembur (P) Ltd. (supra) has dealt with this very issue while deciding the treatment to be given to a transaction of surrender of tenancy right. The earlier decisions of the apex Court commencing from case of United Commercial Bank Ltd. vs. CIT (1957) 32 ITR 688 (SC) have been considered by the apex Court and, hence, it is not necessary to repeat the same. Suffice it to state that the Act does not envisage taxing any income under any head not specified in s. 14 of the Act. In the circumstances, there is no question of trying to read any conflict in the two judgments of this Court as submitted by the learned counsel for the Revenue.
Insofar as additions of Rs. 99,00,000 and odd and Rs. 4,00,000 are concerned, admittedly the amounts were found having been entered in the regular books of account. Therefore, inquiry, if any, was permissible in the course of regular assessment proceedings and the finding of the Tribunal in this regard being in consonance with the ratio of judgment of this Court in the case of N.R. Paper & Board Ltd. & Ors. (supra), no interference is warranted.
Insofar as the remaining three additions of Rs. 1,50,00,000, Rs. 70,00,000 and Rs. 4,51,00,000 are concerned, the Tribunal has after appreciating evidence on record found that the said figures were projected budgetary estimates and no actual transactions had taken place. There is no evidence on record to indicate the contrary. In the circumstances, it is not necessary to make any further discussion in this regard.
In the result, all the questions are answered accordingly in affirmative. The Appeal stands dismissed in light of what is stated hereinbefore with no order as to costs.
Before parting, it is necessary to record that during course of hearing reference was made to historical background of proceedings before Settlement Commission and even questions in this regard have been proposed as noted hereinbefore by appellant Revenue. However, the said proceedings before Settlement Commission having been found to be not maintainable by Settlement Commission by rejecting application moved by the assessee, the Court has not found it necessary to enter into any discussion in this regard as the said contentions have no bearing on the correctness or otherwise of the impugned order of Tribunal in the facts and circumstances of the case.
[Citation : 329 ITR 1]
