ANWAR HUSSAIN IBRAHIM ALI and P V. COMMISSIONER OF I T and ORS

ITA/106/2005

AI Insights

The case involves Anwar Hussain Ibrahim Ali & P, the appellant, who challenged the judgment and order of the Tribunal that had allowed the appeal of the Department concerning an income tax assessment. The primary contention was the addition of Rs. 5,00,000 to the appellant's income, which the appellant argued was made without any basis or material evidence. The High Court, referencing a decision in a similar case (CIT Vs. Ram Singh), found that the Tribunal's decision lacked proper reasoning and did not substantiate the addition made to the appellant's income. Consequently, the matter was remanded back to the Tribunal for a fresh decision.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 691515 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 17-01-2017
• Assessment Year: misc
• Other Referred Cases: CIT Vs. Ram Singh
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ANUROOP SINGHI
• Assessee Lawyers: P K KASLIWAL
• Keywords: Addition; Assessment; Best Judgment Assessment; Estimation; Income Tax
• Section: 145

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 106 / 2005 Anwar Hussain Ibrahim Ali & P ----Appellant Versus Commissioner Of I T & Ors ----Respondent _____________________________________________________ For Appellant(s) : Mr. P.K. Kasliwal For Respondent(s) : Mr. Anuroop Singhi _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VINIT KUMAR MATHUR Judgment 17/01/2017 1. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has allowed the appeal of the Department. 2. Following questions were framed at the time of admission of the appeal: 1. Whether the Tribunal had any material to hold the addition of Rs. 5,00,000/- against the appellant as made by the Assessing Officer that too without any basis, such addition is legally sustainable? 2. Whether, on the facts and circumstances of the case, the Tribunal was justified in sustaining the addition of Rs. 5,00,000/- in absence of any material evidence on record and whether, such addition is in absence of any material is sustainable? 3. Whether, addition made by the Tribunal of Rs. 5,00,000/- against the appellant on estimation basis, is not arbitrary and excessive?” 3. Only one reason has been given in paragraph 3 which reads (2 of 3) [ITA-106/2005] as under: “With this background, we heard both the parties and perused the material available on record. In the instant case, the addition is pertaining to IMFL and Beer which is mostly used in the urban area. It may be mentioned that in this trade the locality of the shop, surrounding society, time, quantity, quality etc. are the important factors. Keeping in mind these factors, we uphold the application of section 145 for the reasons mentioned in the order of the AO. However, the addition is looking on higher side due to peculiar facts and circumstance of the case. At the same time, the relief given by CIT (A) is also looking on excessive side. Therefore, we modify both the orders of the lower authorities and restrict the addition to Rs. 5,00,000-(Rs. Five lakhs). Thus, the assessee will get the relief of Rs. 14,46,000/- from the order of the AO. This ground is partly allowed in favour of the department.” 4. In view of the decision of this Court in Income Tax Appeal No. 117/2014 (CIT Vs. Ram Singh), decided on 21.1.2014, more particularly para 24 and 46 which reads as under: “24. We have carefully considered the arguments advanced and have perused the impugned orders and material on record. As regards rejection of books of accounts, cogent reasons have been assigned by all the three Income-tax Authorities and we see no reason to take a different view. It is well settled that in a best judgment assessment there is always a certain degree of guess work. The authorities concerned should make a honest and fair estimate of the income even in a best judgment assessment and should not act arbitrarily. It is equally true that assessee is himself to be blamed as he did not submit proper accounts. 46. Resultantly, in our considered view, all the impugned orders passed by the ITAT, wherein appeals (Schedule-A) have been filed either by the revenue or by the assessees cannot be sustained in the eyes of law and are hereby quashed & set aside to be decided afresh and de-novo in accordance with law. The Cross Objection No.100/2011 filed in DB ITA No.372/2005 also stands disposed of in the above terms. We also direct the ITAT to decide all the matters expeditiously but in no case later than six months from the date parties are called upon to put their appearance before the ITAT. However, it is (3 of 3) [ITA-106/2005] made clear that the ITAT may not be influenced/inhibited by any of the observations, referred to herein above and may decide independently on merits in accordance with law. Parties are directed to appear before the ITAT on 10/03/2014. No costs.“ 5. In our view, the reasoning of the Tribunal is not proper. 6. The order of the Tribunal is quashed. The matter is remanded back to the Tribunal. 7. Therefore, the question is required to be answered in favour of assessee. The appeal stands disposed of. (VINIT KUMAR MATHUR)J. (K.S. JHAVERI)J. /bmg 22 "