DY. CIT V. PLASMETIQ INDUSTRIES

TAXAP/896/2006

AI Insights

The case revolves around an appeal by the Deputy Commissioner of Income Tax (DY. CIT) against Plasmetiq Industries concerning a decision made by the Income Tax Appellate Tribunal (ITAT) in Ahmedabad. The ITAT had allowed the assessee's appeal for telescoping benefit, which the revenue challenged. The main legal issue was whether the ITAT was correct in law and in facts in holding that the assessee is entitled to telescoping benefit disregarding the facts that addition was made on the basis of admitted facts regarding unaccounted sales. The Gujarat High Court, after reviewing the matter and the decisions in similar cases, concurred with the ITAT's reasoning and dismissed the appeal, thereby confirming the ITAT's decision.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 720478 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 11-12-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SWATI SOPARKAR
• Assessee Lawyers: K M PARIKH
• Keywords: Assessing Officer; Income tax appellate tribunal; Telescoping benefit; Unaccounted sale
• Section: ITA No.579/Ahd/1999

Judgement Text

"O/TAXAP/896/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 896 of 2006 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 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 ? ================================================================ DY. CIT....Appellant(s) Versus PLASMETIQ INDUSTRIES....Opponent(s) ================================================================ Appearance: MR KM PARIKH, ADVOCATE for the Appellant(s) No. 1 MRS SWATI SOPARKAR, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Date : 11/12/2014 Page 1 of 5 O/TAXAP/896/2006 JUDGMENT ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. By way of this appeal, the appellant- revenue has challenged the judgment and order dated 27.09.2005 passed by the Income Tax Appellate Tribunal, Ahmedabad in ITA No.579/Ahd/1999, whereby the appeal preferred by the assessee was allowed for statical purposes. 2. It has come to the notice of the Court that this matter along with other three appeals i.e. Tax appeal No.897 of 2006 to 899 of 2006 came up for admission on 26.12.2006. Those three appeals came to be dismissed by this Court. However, this appeal came to be admitted and the following substantial question of law was formulated :- “ Whether ITAT was right in law and in facts in holding that the assessee is entitled to telescoping benefit disregarding facts that addition was made on the basis of admitted facts regarding unaccounted sale ?” 3. This Court while dismissing the other appeals namely Tax Appeal No.897 of 2006 to 899 of 2006 has held as under:- Page 2 of 5 O/TAXAP/896/2006 JUDGMENT “ While disposing the appeal, the Tribunal has remitted the matter back to the Assessing Officer with direction to decide the matter after providing reasonable opportunity of hearing to the assessee and considering the assessee's claim of benefit of telescoping. Relevant part of the discussion reads as under : “We have heard the learned representatives of the parties and perused the record and gone through the orders of lower authorities as well as the order of ITAT(Supra). After considering the facts of the case we find that certain facts and figures are required to examine and verify from the records in light of the above decision of ITAT (supra). Under the circumstances, we set aside the orders of lower authorities and send back the matter to the file of the Assessing Officer. The Assessing Officer is directed to decide the matter in accordance with the decision of ITAT considering the assessee's claim of benefit of telescoping. The Assessing Officer will decide the matter after providing reasonable opportunity of hearing to the assessee.” What should be addition and on what basis, the Tribunal has directed to add on the basis of the telescoping i.e. after seeing the entire record, the highest entry that made during that period, that be taxed as income from the undisclosed income of the assessee for addition purposes. The matter has been sent back to the Page 3 of 5 O/TAXAP/896/2006 JUDGMENT Assessing Officer with some directions, especially, considering the case of the assessee regarding the addition on the basis of the telescoping that does not appear unreasonable. In many cases, when so many entries are found, this principle of telescoping is applied for addition. No case is made out for interference. As such, no substantial question of law does arise in these appeals.” 4. We concur with the reasonings adopted by the earlier bench. Since the issue is already concluded, no elaborate reasons are required to be assigned for disposing this appeal. Accordingly, we answer the question raised this appeal in affirmative i.e. in favour of the assessee and against the revenue. We hold that the Tribunal was right in holding that the assessee is entitled to telescoping benefit disregarding fact that addition was made on the basis of admitted facts regarding unaccounted sale. The appeal is dismissed. The judgment and order of the Tribunal is hereby confirmed. (K.S.JHAVERI, J.) (K.J.THAKER, J) Page 4 of 5 O/TAXAP/896/2006 JUDGMENT pawan Page 5 of 5 "