INCOME TAX DEPARTMENT V. MS SHANKAR CO.

CR.A/526/2003

AI Insights

The case involves an appeal by the Income Tax Department against the acquittal of M/S Shankar Dass Balram Kumar & others by the Chief Judicial Magistrate, Una. The respondents were accused of not recording all purchases and sales in their business accounts, which was discovered during an inspection by the Sales Tax Department in 1982. The Assessing Officer and subsequent appellate authorities had made additions to the respondents' income based on unrecorded transactions. However, the trial court found insufficient evidence to substantiate the charges, leading to the acquittal of the respondents. The High Court, after reviewing the evidence and the trial court's findings, dismissed the appeal, agreeing with the trial court's conclusion that the prosecution had failed to prove its case.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 735133 (HC-HIMACHAL_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 02-07-2010
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Code of Criminal Procedure
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SHIVANK PANTA; PARESH SHARMA
• Assessee Lawyers: VINAY KUTHIALA
• Keywords: Acquittal; Books of account; Income Tax; Inspection; Penalty; Sales Tax
• Section: 132; 271(i)(c); 276 C; 378(4)

Judgement Text

"IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA Cr. Appeal No. 526 of 2003 Date of decision: 2.7.2010 ------------------------------------------------------------------------------------------------- Income Tax Department ... Appellant Versus M/S Shankar Dass Balram Kumar & others …. Respondents Coram The Hon’ble Mr. Justice V.K. Ahuja, J. Whether approved for reporting1? For the appellant: Mr. Vnay Kuthiala, Advocate. For the respondents: Mr. Shivank Panta and Mr. Paresh Sharma, Advocates. V.K.Ahuja, J (Oral): This is an appeal filed by the appellant/Income Tax Department under Section 378(4) of the Code of Criminal Procedure against the judgment of the Court of learned Chief Judicial Magistrate, Una dated 2.5.2003 whereby the respondents have been acquitted in a complaint filed against them under Section 276(C) of the Income Tax Act, 1961. 2. Briefly stated, the facts of the case as alleged, are that the respondents are partners of firm M/S Shankar Dass, Balram Kumar, Jhalars, District Una and are running a Karyana Shop in the village Jhalars. On 2.8.1982, the Enforcement Wing of the Sales Tax Department conducted an inspection of the business premises of the respondents and impounded the books of accounts and loose Whether the reporters of Local Papers may be allowed to see the Judgment? Yes. 2 documents. These were thereafter were impounded by the Assessing Officer under Section 132 of the Income Tax Act. On close examination of the seized records, the Assessing Officer found that the respondent was recording all the purchases and some of which were taken to the regular books of accounts and some of which were not recorded in the regular books of accounts. The Assessing Officer tallied the purchases as per the said purchase book “Bahi” and as per the regular books of accounts for the period from 1.4.1982 to 2.8.1982, he found that the purchases to the extent of Rs.2,48,499/- were not recorded in the regular books of account. The total sales as per the sale book were Rs.43,34,401/- and out of which sale of Rs.23,94,826/- had been recorded in the regular books of account and the balance sales of Rs.19,39,575/- had not been recorded in the regular books of accounts. Various receipts of payments received from different parties were not recorded in the regular book of accounts. The Assessing Officer estimated the sales for the period from 1.4.1982 to 2.8.1982 at Rs.47,50,000/- as against the sale of Rs.23,94,826/-. The Assessing Officer applied gross profit rate and worked out the addition of Rs.51,813/-. 3. On appeal, the Commissioner, Income Tax reduced the estimate of sale from Rs.47,50,000/- to Rs,40,0000/- and upheld the addition to the extent of Rs.33,710/-. The Income Tax Appellate Tribunal upheld the order passed by the Commissioner Income Tax. The Assessing Officer thereafter after affording afforded an opportunity to the respondent, imposed a penalty of Rs.22,248/- under Section 271-(I)(C) of the Income Tax Act. 4. I have heard the learned counsel for the parties and have gone through the record. 3 5. On appraisal of the evidence produced by the complainant, it is clear that there is no evidence on record as to who were the partners of the firm. The confession made by one Balram Kumar was relied upon but there is no evidence to show that he was a partner of the firm or an authorized representative. Therefore, there is nothing on record to show in what capacity he was working on behalf of the firm. The complainant also did not produce the original bills of sales, receipt books, roznamcha, loose papers, kuchi Rokar, order book, book containing entries of purchase etc. to show that the transactions which had taken place were not reflected in the regular nooks of accounts, therefore, no conclusion could be drawn that there was suppression of purchases to the extent of over Rs.20,000/-. Needless to say that the original bills and the statement of accounts were not produced before the Court. There is nothing on record to show that goods worth Rs.4,13,146.10 were found in eight godowns of the firms at the time of inspection, which fact had to be proved by examining the witnesses in which the complainant had failed. The learned trial Court had referred to the evidence in detail and has concluded that the complainant had failed to prove the charges against the respondents and the findings so recorded do not suffer from any infirmity and cannot be said to be perverse and calls for no interference from this Court. In view of the above discussion, we accordingly hold that there is no merit in the appeal filed by the appellant, which is dismissed. Bail bonds furnished by the respondents shall stand discharged forthwith. July 2, 2010 ( V.K. Ahuja ) (SDS) Judge 4 "