COMMISSIONER OF INCOME-TAX V. GUAJRAT TEA DEPOT CO.

ITR/93/1995

AI Insights

The case revolves around the Income Tax Department's attempt to make additions to the income of Gujarat Tea Depot Co. for the Assessment Year 1982-83, alleging suppression of sales based on incriminating materials seized during a search. The initial additions made by the Assessing Officer were set aside by the Commissioner of Income-tax (Appeals), who ordered a de novo assessment. However, the Tribunal later reversed this decision, leading to the current reference by the Commissioner of Income-tax to the High Court. The core legal issues pertained to the justification for the additions made and the consequent deletion of interest charges under sections 215 and 217(1) of the Income Tax Act, 1961.

• Counselvise Citation: [2006] 140 COUNSELVISE.COM (IT) 674160 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 19-01-2006
• Assessment Year: misc
• Other Referred Cases: Assessment Year 1981-82
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J P SHAH; MANISH SHAH
• Assessee Lawyers: TANVISH BHATT
• Keywords: Appeal; Assessment; Income Tax; Interest charged; Suppression of sales; Tribunal; Assessment Year 1982-83
• Section: 215; 256(1); 217(1)

Judgement Text

"ITR/93/1995 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No.93 of 1995 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA Sd/- HONOURABLE MS.JUSTICE H.N.DEVANI Sd/- ===================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ===================================================== COMMISSIONER OF INCOME-TAX - Applicant(s) Versus GUAJRAT TEA DEPOT CO. - Respondent(s) ===================================================== Appearance : MR TANVISH U BHATT for Applicant(s) : 1, MR JP SHAH for Respondent(s) : 1, MR MANISH J SHAH for Respondent(s) : 1, ===================================================== CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 19/01/2006 ORAL JUDGMENT (Per : HONOURABLE MS.JUSTICE H.N.DEVANI) 1. The Income Tax Appellate Tribunal, Ahmedabad Bench 'A', has referred the following three questions under Section 256(1) of the Income-tax ITR/93/1995 2/4 JUDGMENT Act, 1961 (the Act) at the instance of Commissioner of Income-tax: 1. “Whether, in law and on facts, the Appellate Tribunal is right in setting aside the order made by the Commissioner of Income-tax (Appeals) restoring the assessment to the IAC (Asstt.) ?” 2. “Whether, there were justifying circumstances for deletion of the addition of Rs.3,78,000/- on account of suppression of sales ?” 3. “Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in consequently deleting the interest charged u/s. 215 and 217(1) of the I.T. Act, 1961 ?“ 2. The Assessment Year is 1982-83 and the corresponding accounting period is Samvant Year 2037. 3. Heard Mr.Tanvish U. Bhatt, learned Standing Counsel on behalf of the applicant-revenue, and Mr.J.P.Shah, learned advocate for the respondent-assessee. 4. The assessee, is a Registered Partnership Firm. Search proceedings were taken at the premises of the assessee on 22nd November, 1983 and certain incriminating materials were seized. The Assessing Officer made additions on account of ITR/93/1995 3/4 JUDGMENT suppressed sales on the basis that the assessee had received certain cash of small amounts, on the ground that though the sales were accounted for, there was scope for additions on account of suppression of sales. 5. In assessee's appeal, the Commissioner of Income-tax (Appeals) vide order dated 10th September, 1985 set aside the assessment and directed de novo assessment. 6. The assessee carried the matter in appeal before the Tribunal. The Tribunal vide its order dated 28th July, 1987 set aside order of the CIT (Appeals) and allowed the appeal. 7. As can be seen from the order of the Tribunal, the Tribunal has found that on similar grounds the Commissioner of Income-tax (Appeals) had deleted the additions made in relation to Assessment Year 1981-82 on the ground that the seized books were in respect of altogether different years and, therefore, there was no case for any addition. The Tribunal, accordingly, on the basis of the earlier decision of the appellate authority held that there was no case for addition as the situation in the present case was similar to that for Assessment Year 1981-82. The learned counsel for the applicant gracefully accepted the fact that ITR/93/1995 4/4 JUDGMENT the aforesaid decision for Assessment Year 1981- 82 had attained finality. 8. Considering the aforesaid findings of fact recorded by the Tribunal, it cannot be said that there is any infirmity in the impugned order of the Tribunal. In the circumstances, the questions referred are answered in the affirmative i.e. in favour of the assessee and against the Revenue. 9. The reference stands disposed of accordingly, with no order as to costs. Sd/- [ D.A. MEHTA, J ] Sd/- [ H.N. DEVANI, J ] *** Bhavesh* "