COMMISSIONER OF INCOME TAX V. PATEL PRINTING PRESS

ITA/172/1998

AI Insights

The case involves the Commissioner of Income Tax as the petitioner and Patel Printing Press as the respondent, concerning the interpretation and application of Section 263 of the Income Tax Act, 1961. The core issue was whether the Income Tax Appellate Tribunal was correct in cancelling the order passed by the Commissioner under Section 263, which pertained to the assessment of income and the alleged benami transactions involving M/s. Duphant & Company. The Tribunal's decision, which was challenged by the Revenue, held that the original assessment was valid and not erroneous, as it was based on a thorough examination of the books and transactions at market rates, without any evidence to support the claim of benami ownership.

• Counselvise Citation: [1998] 140 COUNSELVISE.COM (IT) 731552 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 29-08-1998
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: PRANAV DESAI
• Assessee Lawyers: MANISH BHATT
• Keywords: Appellate Tribunal; Assessment; Benami concern; Erroneous order; Income Tax
• Section: 143(3); 263; 256(2)

Judgement Text

" IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX APPLICATION No 172 of 1998 For Approval and Signature: Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE A.R.DAVE ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements? 2. To be referred to the Reporter or not? 3. Whether Their Lordships wish to see the fair copy of the judgement? 4. Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? -------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus PATEL PRINTING PRESS -------------------------------------------------------------- Appearance: MR MANISH R BHATT for Petitioner MR PRANAV G. DESAI for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE A.R.DAVE Date of decision: 29/08/98 ORAL JUDGEMENT ( Per R.K.Abichandani, J.) The Revenue has suggested the following two questions seeking a direction on the Income Tax Appellate Tribunal to forward statement of case in respect thereof under Section 256 (2) of the Income Tax Act, 1961: \"1. Whether, the Appellate Tribunal is right in law and on facts in cancelling the order passed by the Commissioner of Income Tax under Section 263 of the Act ? 2. Whether, the Appellate Tribunal is right in law and on facts in not appreciating the fact that in the case of the sister concern, namely, M/s. Duphant & Company the concerned Assessing Officer had come to a specific finding that the income assessed therein in fact belonged to the present assessee ?\" 2. The two questions are suggested virtually to converge on the same aspect as to whether the firm in question was a benami concern. The Tribunal in its order dated 27th February, 1997 allowed the appeal against the order of the C.I.T. made under Section 263 of the Act. After taking into account the rival submissions of the parties, the Tribunal found that the Dy.CIT (Assessment) completed the assessment under Section 143 (3) on 31st March, 1989 after going through the books of accounts and after taking note of the purchases of ink, paper etc. made from M/s. Duphant & Company and after applying his mind. It was held that such an order cannot be called erroneous one as the same was passed in accordance with law. This obviously was a valid reason for interfering with the order made under Section 263 of the Act. The Tribunal itself also noted that M/s. Duphant & Company was in existence ever since 1983-84 and never in the past the income of M/s. Duphant & Company was clubbed with that of the assessee firm. It was observed that, simply because the assessee firm, as in the past, also purchased ink and paper from M/s. Duphant & Company, that too at the prevailing market rates, it will not make M/s. Duphant & Company a firm belonging to the assessee firm or, for that matter, benami of the assessee firm. The question whether the firm M/s. Duphant & Company was benami of the assessee firm is purely a question of fact and the decision of the Tribunal, therefore, does not raise any question of law. Rule is, therefore, discharged with no order as to costs. (KMG Thilake) ********* "