DCIT, Bangalore V. M/s Elind Computers P. Ltd., Bangalore

ITA 862/BANG/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1577 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-01-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 01-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B ARULAPPA
• Assessee Lawyers: H N KHINCHA
• Keywords: Income from undisclosed sources; Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.862(BANG)/2010 (ASSESSMENT YEAR: 1998-99) DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-11(3), BANGALORE. APPELLANT VS. M/S.ELIND COMPUTERS P LTD. 5C, DEAUVILLE APARTMENTS, 19 CHURCH STREET, BANGALORE-560 001. RESPONDENT APPELLANT BY: SHRI B.ARULAPPA. RESPONDENT BY : SHRI H.N. KHINCHA. O R D E R PER SMT. P. MADHAVI DEVI, JM : THIS IS AN APPEAL BY THE REVENUE AND IS DIRECTED A GAINST THE ORDER OF THE CIT(A)-I, BANGALORE, DATED 27-4-20 10 FOR THE ASSESSMENT YEAR 1998-99. THE DEPARTMENT IS AGGRIEVE D BY THE RELIEF GIVEN BY THE CIT(A) TO THE ASSESSEE BY DELET ING THE DISALLOWANCE AND THE CONSEQUENTIAL ADDITION OF RS.7 ,85,000/- MADE BY THE AO AS INCOME FROM UNDISCLOSED SOURCES. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A COMPANY DEALING IN COMPUTER SPARES AND SERVICES. I T FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 1998-99 ON ITA NO.862(BANG)/2010 PAGE 2 OF 4 30-11-1998 BEFORE THE ASST. COMMISSIONER OF INCOME- TAX, COMPANY CIRCLE-I, COIMBATORE, DECLARING AN INCOME O F RS.13,17,340/-. IN THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO A S 'THE ACT'], THE AO DETERMINED THE TOTAL INCOME AT RS.35,06,420/ -. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO GRANTED PARTIAL RELIEF DELETING THE ADDITION MA DE ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES. 3. THE DEPARTMENT FILED AN APPEAL BEFORE THE ITAT AND THE TRIBUNAL; IN ITS ORDER DATED 3-11-2006 DISMISSE D THE APPEAL FILED BY THE DEPARTMENT HOLDING THAT THE TAX EFFECT IS LOW. THEREAFTER, THE DEPARTMENT FILED A M.P. SEEKING REC ALL OF THE ORDER AND THE ORDER WAS RECALLED AND THE MATTER WAS REMANDED TO THE AO FOR DECIDING THE ISSUE AFRESH IN ACCORDAN CE WITH LAW. PURSUANT TO THE SAME, THE AO ISSUED NOTICES TO THE ASSESSEE AND AFTER CONSIDERING THE ASSESSEES SUBMISSIONS HE LD THAT THE ASSESSEES EXPLANATION IS NOT ACCEPTABLE AS EVIDENC ES IN RESPECT OF SOURCES OF SHRI N.R.SHETTY OR SMT. SUPTA SHETTY HAVE NOT BEEN PRODUCED. HE, THEREFORE, MADE THE ADDITION OF RS.7,85,000/- U/S 68 OF THE ACT. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE CIT(A) WHO GRANTED RELIEF BY HOLDING THAT THE C IT(A), COIMBATORE HAD GIVEN COHERENT REASONS, AFTER EXAMIN ING ALL THE MATERIALS BEFORE HIM, TO DISALLOW THE SUM OF RS.1 L AKH OUT OF INVESTMENT OF RS.2 LAKH IN THE CASE OF SMT. SUPTA SHETTY AND RS.6,85,000/- OUT OF INVESTMENT OF RS.13,70,000/- B Y DR. ITA NO.862(BANG)/2010 PAGE 3 OF 4 N.R.SHETTY AND AFTER PERUSING THE COPIES OF THE RET URNS FILED FOR THE ASSESSMENT YEARS 1998-99 AND 1999-00 DATED 25-1 -2001, SHOWING AGRICULTURAL INCOME AT RS.8,97,300/- AND RS .7,30,000/- HE CAME TO THE CONCLUSION THAT DR. N.R.SHETTY W AS OWNER OF AGRICULTURAL LAND AND DOING AGRICULTURAL OPERATIONS NOT ONLY ON OWN LAND BUT ALSO ON GOVERNMENT LAND ENCROACHED BY HIM FOR WHICH HE HAS ALSO BEEN PENALIZED. HE, THEREFORE, D ELETED THE ADDITION OF RS.7,85,000/- U/S 68 OF THE ACT. AGGRI EVED BY THE SAME, THE REVENUE IS IN APPEAL BEFORE US. 5. SHRI B.ARULAPPA, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE AO WHILE SHRI H.N.KHINCHA, THE LEARNED COUNSEL FOR THE ASSESSEE S UPPORTED THE ORDER OF THE CIT(A). 6. HAVING CONSIDERED THE MATTER, WE ARE OF THE OPIN ION THAT THE CIT(A)S DECISION IS BASED ON COGENT MATER IAL AND THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT BEEN AB LE TO REBUT THIS FINDING OF THE CIT(A), WE DO NOT SEE ANY REASON TO INTERFERE WITH THE SAME. 6. IN THE RESULT, THE REVENUES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE PRESIDENT (SMT. P.MADHAVI DEVI) JUDICIAL MEMBER EKS ITA NO.862(BANG)/2010 PAGE 4 OF 4 COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE