(O&M) M/S KULDIP SOOD ENTERPRISES V. COMMISSIONER OF INCOME TAX LUDHIANA

ITA/128/2001

AI Insights

The case involves M/s. Kuldip Sood Enterprises, the appellant, contesting an order by the Income Tax Appellate Tribunal which sustained an addition of Rs. 4,84,450 to their income for the assessment year 1988-89. The addition was based on the failure of M/s Globe Engineering Works to respond to queries from the Income Tax Department, and suspicions regarding the legitimacy of the transactions. The Assessing Officer had noted irregularities in the bank accounts of the proprietors of M/s Globe Engineering Works, including cash withdrawals and connections to a relative of the appellant employed at the bank. The High Court found that the Tribunal's decision was based on factual findings and not on a perverse reading of evidence, leading to the dismissal of the appeal.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 769435 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 10-02-2020
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: SANDEEP GOYAL
• Assessee Lawyers: ALOK MITTAL
• Keywords: Appeal; Disallowances; Income Tax; Presumptions and Conjectures; Second-hand machinery
• Section: 260A

Judgement Text

"ITA-128-2001 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA-128-2001 (O&M) Date of Decision : 10.2.2020 M/s. Kuldip Sood Enterprises ......Appellant Versus The Commissioner of Income Tax, Ludhiana ...... Respondent CORAM : HON'BLE MR.JUSTICE AJAY TEWARI : HON'BLE MR.jUSTICE AVNEESH JHINGAN *** Present : Mr. Alok Mittal, Advocate for the appellant. Mr. Sandeep Goyal, Sr. Standing counsel for the respondents. *** AJAY TEWARI, J. (Oral) 1. This appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 against the order dated 17.10.2000 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A' Chandigarh (for short 'the Tribunal') passed in Income Tax Appeal No. 999/Chandi/1993 for A.Y. 1988-89 claiming the following questions of law:- (a) Whether in the facts and circumstances of the case, order Annexure P-1 and P-3 are legally unsustainable ? (b) Whether in the facts and circumstances of the case, the order of the Ld. Appellate Tribunal in sustaining an addition of Rs. 4,84,450/- on account of M/s Globe Engineering Works not responding to the queries of the Income Tax Department is legally unsustainble ? (c) Whether in the facts and circumstances of the case, the ANURADHA 2020.02.12 17:37 I attest to the accuracy and integrity of this document ITA-128-2001 (O&M) 2 order passed by the Appellate Tribunal in sustaining an addition of Rs. 4,84,450/- in the case of the assessee- appellant on account of the some third party enquiries is legally sustainable ? (d) Whether in the facts and circumstances of the case, the addition of Rs. 4,84,450/- is legally sustainable as the said addition being based on mere presumptions and conjectures which cannot form the basis for adjudication ? 2. This appeal relates to the disallowances of certain amounts which as per the assess were paid to his supplier but which was doubted by the authorities below. 3. Brief facts are that the payment in question as per the assessee was made to M/s. Globe Engineering Works, New Delhi for certain second hand machinery supplied in the financial year 1987-88. The Assessing Officer found that at one stage, one Mr. Gulshan Kumar had opened an account in the capacity of proprietor of M/s. Globe Engineering Works, Near Manju Cinema, G.T.Road, Ludhiana who withdrew the amount by cash and similarly, another person called Rajesh Kumar opened another account as proprietor of M/s. Globe Engineering Works with the address of Industrial Area, AT Ludhiana (67B), which was also withdrawn in cash. It was further found that both the accounts holder were introduced by a relative of the appellant-assessee who was employed in that very branch of that bank. On the basis of this documentation, the authorities below came to the conclusion that the appellant had not been able to satisfactorily prove that the payments made to these persons were related to the purchase of second hand machinery. 4. In our considered opinion, the finding is a pure finding of fact and learned counsel has not been able to show us that it is based on a ANURADHA 2020.02.12 17:37 I attest to the accuracy and integrity of this document ITA-128-2001 (O&M) 3 perverse reading of the evidence. 5. Accordingly, no substantial question of law proposed arises. Consequently, the appeal stands dismissed. 6. Since the main case has been dismissed, the pending application, if any, also stands disposed of. (AJAY TEWARI) JUDGE (AVNEESH JHINGAN) JUDGE 10.2.2020 anuradha Whether speaking/reasoned - Yes/No Whether reportable - Yes/No ANURADHA 2020.02.12 17:37 I attest to the accuracy and integrity of this document "