J.D. Leasing Limited V. Deputy Commissioner of Income Tax, Hyderabad

ITTA/605/2012

AI Insights

The case involves J.D. Leasing Limited, the appellant, contesting a decision by the Deputy Commissioner of Income Tax, Hyderabad, the respondent, regarding a block assessment for the period 1989-90. The appellant challenged the addition of Rs.2,42,168 to their income, arguing that the addition was made without any evidence from the seized material and violated principles of natural justice. The Tribunal had found that the addition was based on seized material and statements from the company's directors, which the appellant claimed were not properly considered. The High Court dismissed the appeal, agreeing with the Tribunal's findings.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 796387 (HC-HYDERABAD)
• Appeal Type: Others
• Pronouncement Date: 19-07-2013
• Assessment Year: misc
• Result in Favour of: Revenue
• Court: HIGH COURT
• Keywords: Block assessment; Natural Justice; Seized Material; Un-disclosed income
• Section: 132(4)

Judgement Text

"THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE Ms. JUSTICE G. ROHINI I.T.T.A.No.605 of 2012 DATED: 19.7.2013 Between: J.D. Leasing Limited … Appellant And Deputy Commissioner of Income Tax, Hyderabad. …. Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE Ms. JUSTICE G. ROHINI I.T.T.A.No.605 OF 2012 Judgment: (per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is directed against the judgment and order of the learned Tribunal dated 27.4.2007 in relation to the block assessment period 1989-90 and is sought to be admitted on the following suggested questions of law. 1) Whether on the facts and in the circumstances of the case, the ITAT was correct in upholding the addition of Rs.2,42,168/- in spite of the fact that the respondent had failed to show any evidence of the seized material based upon which the above addition was made ? 2) Whether on the facts and in the circumstances of the case, the ITAT was correct in upholding the addition of Rs. Rs.2,42,168/- in spite of the fact that the respondent had violated principles of natural justice by not making the seized material on the basis of which the addition was made available to the appellant ? 3) Whether on the facts and in the circumstances of the case, the ITAT was correct in upholding the addition of Rs.2,42,168/- in spite of the fact that Mr. Vikas Sethia, a director of the appellant, had clearly stated that the amount of Rs.40,55,802/- that was disclosed by him should be set off against the amount of Rs.50,00,000/- that was disclosed by Mr. Dharamchand Sethia ? We have seen all the grounds taken in this memorandum of appeal and the aforesaid suggested questions of law. We have heard the learned counsel for the appellant and we have considered his contentions. It is contended that all the authorities below failed to take notice of the material relied on and passed orders. It was further contended that all the authorities have relied on materials which were not collected during the search and seizure operations. Therefore, the whole question is whether the authorities below assessed the un-disclosed income on the basis of any extraneous material which could not be found at the time of search and seizure. To examine this contention, we have examined the fact finding of the learned Tribunal. The Tribunal came to the fact finding that the addition was made on the basis of the seized material marked as annexure-‘S’, pages 1 to 11 and the statements of Sri P.C. Sethia and Vikas Sethia. The learned Tribunal has recorded a detailed finding as follows: “From the combined reading of the statements of Shri D.C. Sethia, Shri Prakashchand Sethia, Shri Vikas Sethia we find that the impugned addition was made on the basis of the statements of Shri P.C. Sethia confirmed by Shri Vikas Sethia which was recorded on 5.11.93 disclosing a sum of Rs.88,76,305.05 as income after considering the seized material marked as Annexure-S pages 1 to 11 found at the time of search at Ahmedabad. As regards the set off of disclosure of Rs.50 lakhs, made by Shri D.C. Sethia, father of Shri Vikas Sethia and Chairman of the company, we find that there is no material on record to show that while disclosing a sum of Rs.50 lakhs, Shri D.C. Sethia has referred or included the income recorded in the said seized material, i.e., annexure-S pages 1 to 11 found at the time of search at Hyderabad. Even in his statement there is no reference about the assessee company and the income recorded in the said search material marked as annexure-S and annexed as pages 1 to 11. In the order passed by the CIT, dated 21/26.7.1994, accepting the bifurcation of the income declared by Shri D.C. Sethia amounting to Rs.50 lakhs, there is no reference of the assessee-company except that the income declared u/s. 132(4) got generated in the name of six partnership concerns, viz., J.D. Electronics assessed at Hyderabad, Poona, Ahmedabad, Madras, Visakhapatnam and Calcutta.” In view of the aforesaid fact finding, it is difficult for us to decide otherwise as there is no challenge to the above said fact finding on the ground of perversity. Under such circumstances, we dismiss this appeal. ___________________ K.J. SENGUPTA, CJ _________________ G. ROHINI, J 19.7.2013 pnb "