B.K. JAIN V. COMMI. OF IT, LUDHIANA

ITA/363/2011

AI Insights

The case involves B.K. Jain, a Chartered Accountant, who appealed against the orders of the Income Tax Appellate Tribunal, Chandigarh, concerning the assessment year 2004-05. The primary issues revolved around the legality of the proceedings under Section 143(3) of the Income Tax Act, 1961, the sustainability of the Tribunal's order in confirming a GP rate of 0.5% of turnover, the calculation of turnover based on bank accounts not belonging to the assessee, and the treatment of certain transactions as unexplained investments. The Tribunal's decisions were challenged on the grounds of violation of natural justice and improper assessment of evidence.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 693616 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 21-05-2014
• Assessment Year: misc
• Other Referred Cases: ITA No.365 of 2011
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: SACHIN BHARDWAJ
• Keywords: Assessment; GP rate; Income Tax; Natural Justice; Turnover; Unexplained investment; Trading of Shares
• Section: 143(3); 133A; 260A

Judgement Text

"ITA No.363 of 2011 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.363 of 2011 (O&M) Date of decision:21.5.2014 B.K.Jain, 94-D, Bhai Randhir Singh Nagar, Ludhiana (Punjab) ……Appellant Vs. Commissioner of Income Tax, Ludhiana (Punjab) …..Respondent CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON’BLE MR. JUSTICE JASPAL SINGH Present: Mr. Sachin Bhardwaj, Advocate for the appellant. Ajay Kumar Mittal,J. 1. This order shall dispose of ITA Nos.363 of 2011 and 176 and 177 of 2012 as according to the learned counsel for the appellant, common questions of law are involved in all the appeals. However, the facts are being extracted from ITA No.363 of 2011. 2. ITA No.363 of 2011 has been preferred by the appellant- assessee under Section 260A of the Income Tax Act, 1961 (in short, “the Act”) against the order dated 29.4.2010, Annexure 13, passed by the Income Tax Appellate Tribunal, Chandigarh Bench (in short, “the Tribunal”) in ITA No.1096/DEL/2008, for the assessment year 2004-05, proposing to raise following substantial questions of law:- “i) Whether the proceedings concluded under Section 143(3) is sustainable in law since the addition was made by relying upon the statements of some share brokers, taken at the back of the Singh Gurbax 2014.06.13 10:54 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No.363 of 2011 (O&M) 2 assessee, qua which no opportunity of cross examination was granted to the assessee hence against the principles of natural justice? ii)Whether the order of the Tribunal is sustainable since overlooking the report of Income Tax Department officials and comparable case while confirming the GP rate of 0.5% of the turnover? iii)Whether the Tribunal is justified in calculating the turnover on the basis of bank accounts maintained by the parties which does not belong to the assessee? iv)Whether the Tribunal is justified in concurring with the order of the CIT(A) for transactions relatable to dealing in equity shares in his name and in the name of his mother and his son i.e. ` 74,04,024/- as unexplained investment and ` 14,82,124/- on account of profit of trading of shares of assessee rejecting assessee's submissions and evidences without referring any adverse finding on record?” 3. A few facts relevant for the decision of the controversy involved, as narrated in ITA No.363 of 2011, may be noticed. The appellant- assessee is a Chartered Accountant by profession and operating from his office cum residence at 94-D, Bhai Randhir Singh Nagar, Ludhiana. He is engaged in the job of giving accommodation/book entries to various persons making investments in long/short term capital gain/gifts/loans and in consideration charges commission from them. The cash received from different beneficiaries was deposited in various bank accounts of the assessee, his family members and other share brokers from where cheques were issued in favour of the clients for bogus capital gains/share profits/gifts etc. Survey operations were carried out under Section 133A of the Act at the office of the assessee on 15.6.2004. Return of income for an amount of `15,00,000/- was filed on 30.3.2005 alongwith surrender letter Singh Gurbax 2014.06.13 10:54 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No.363 of 2011 (O&M) 3 dated 1.3.2005 qua the Income of `15 lacs for the assessment year in question, `12 lacs for the assessment year 2005-06. Assessment was completed at income of `1,01,25,140/- vide order dated 29.12.2006, Annexure A.8 and certain additions were made. Aggrieved by the order, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 29.9.2008, Annexure A.10, the CIT(A) partly allowed the appeal. Feeling aggrieved, both the assessee and the revenue filed appeals before the Tribunal. Vide order dated 29.4.2010, Annexure A.13, the Tribunal partly allowed the assessee's appeal and dismissed the appeal of the revenue. Hence the present appeals by the appellant-assessee. 4. We have heard learned counsel for the appellant and perused the record. 5. All the questions in these appeals stand concluded by our order of even date in ITA No.365 of 2011 (B.K.Jain, 94-D, Bhai Randhir Singh Nagar, Ludhiana (Punjab) vs. Commission of Income tax, Ludhiana (Punjab) against the assessee. Consequently, all the appeals are hereby dismissed. (Ajay Kumar Mittal) Judge May 21, 2014 (Jaspal Singh) 'gs' Judge Singh Gurbax 2014.06.13 10:54 I attest to the accuracy and integrity of this document High Court Chandigarh "