COMMISSIONER OF INCOME TAX-I V. HAKAM SINGH

ITA/400/2008

AI Insights

The case revolves around an appeal by the Commissioner of Income Tax-I, Ludhiana against the order of the Income Tax Appellate Tribunal, which had invalidated the proceedings under Section 158BD concerning the respondent, Sh. Hakam Singh. The dispute originated from a search operation at M/S S.S. Property Dealer, where an agreement and a statement by Bikar Singh, the seller of the land, were pivotal. The Income Tax Department contended that this statement, along with the seized documents, justified the proceedings under Section 158BD. However, the Tribunal found the evidence insufficient, leading to the dismissal of the Department's appeal, which was subsequently upheld by the High Court.

• Counselvise Citation: [2008] 140 COUNSELVISE.COM (IT) 682842 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 23-09-2008
• Assessment Year: misc
• Other Referred Cases: Amity Hotels Pvt Ltd v. Commissioner of Income Tax and others, 272 ITR 75
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: RAJESH SETHI
• Keywords: Assessment; Benami transaction; Block period; Income Tax; Search operation; Tribunal; Undisclosed income
• Section: 158BD; 260A

Judgement Text

"I.T.A No. 400 of 2008 ::1:: IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.A No. 400 of 2008 Date of decision : September 23, 2008 Commissioner of Income Tax-I, Ludhiana ...... Appellant through Mr.Rajesh Sethi, Advocate v. Sh. Hakam Singh ...... Respondent CORAM : HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY TEWARI *** 1. Whether Reporters of Local Newspapers may be allowed to see the judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest ? *** AJAY TEWARI, J The appeal proposes the following substantial questions of law :- “ i) Whether, on facts, as well as in law, the learned Income Tax Appellate Tribunal was right in holding that the proceedings u/s 158 BD were invalid, ignoring the fact that the statement of Shri Bikar Singh, seller of the land, recorded on 28.8.1998, was the basis of satisfaction of the A.O ? ii) Whether the learned Income Tax Appellate Tribunal was right in law in ignoring the fact that the undisclosed income was proposed to be worked out on I.T.A No. 400 of 2008 ::2:: the basis of agreement found during search in the case of M/S S.S Property Dealers ?” The revenue has filed the present appeal under Section 260A of the Income Tax Act, 1961 (for short “the Act”) against the order dated 10.8.2007 passed by the Income Tax Appellate Tribunal, Chandigarh for the block period 1.4.1988 to 15.7.1998. On a search operation conducted in the business premises of one M/S S.S.Property Dealer on 15.7.1988, an original agreement dated 5.12.1996 was seized from the proprietor which disclosed that the owners of the land Bikar Singh and others sold half of 8 acres of land to Sukhjinder Singh and Jarnail Singh. The statement of Bikar Singh dated 28.8.1998 revealed that half of the said land was sold to the respondent in benami names of Sukhjinder Singh and Jarnail Singh for a consideration of Rs.72,82,500/-. On the basis thereof, the Assessing Officer served a notice under Section 158BD of the Act to the respondent and proceeded to frame the assessment by order dated 27.1.2004. The appeal preferred by the assessee was dismissed by the Commissioner of Income Tax(A) by order dated 12.3.2004. In second appeal, the Tribunal held that the solitary statement of Bikar Singh remained uncorroborated and unsubstantiated. It further held that the satisfaction recorded under Section 158BD of the Act can be arrived at on the basis of positive material. In Amity Hotels Pvt Ltd v. Commissioner of Income Tax and others, 272 ITR 75, the Delhi High Court held as follows :- “The satisfaction is required to be preceded by the investigation and not that the investigation is required to I.T.A No. 400 of 2008 ::3:: be preceded by the satisfaction......” We find no infirmity in the reasoning of the Tribunal and, being in respectful agreement with the above mentioned judgment of the Delhi High Court, we hold that the questions proposed cannot be held to be substantial questions of law. The appeal is dismissed. ( AJAY TEWARI ) JUDGE ( ADARSH KUMAR GOEL ) JUDGE September 23, 2008 'kk' "