Kundan Lal Narain Dass V. Commissioner of Income Tax

ITC/65/1998

AI Insights

The case involves Kundan Lal Narain Dass, a commission agent, who faced additions to his income and penalties following a survey under Section 133-A of the Income Tax Act, 1961. Discrepancies between the records of the assessee and those of the Market Committee and Food and Supply Department were noted, leading to a questionnaire and subsequent additions to the assessee's income. The CIT(A) upheld these additions and made further enhancements, which were affirmed by the Tribunal. The assessee's request for a reference under Section 256(1) was declined, leading to the filing of the current petitions.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 808093 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 07-01-2011
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: T K JOSHI
• Assessee Lawyers: AKSHAY BHAN
• Keywords: Addition; Assessment; Discrepancy; Income Tax; Natural Justice; Penalty; Survey; Perversion of Justice
• Section: 256(1); 133-A; 256(2)

Judgement Text

"IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITC No.65 of 1998 (O&M) & other connected case being ITC No.66 of 1998(O&M) Date of decision: 7.1.2011 Kundan Lal Narain Dass. -----Applicant. Vs. Commissioner of Income Tax. -----Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE ALOK SINGH Present:- Mr. Akshay Bhan, Advocate for the petitioner. Mr. T.K. Joshi, Standing Counsel for the respondent. --- ADARSH KUMAR GOEL, J. 1. This order will dispose of I.T.C. No.65 and 66 of 1998, as both the petitions are stated to be inter-connected. 2. I.T.C. No.65 of 1998 has been preferred by the assessee under Section 256(2) of the Income Tax Act, 1961 (for short, “the Act”) seeking direction for referring for opinion of this Court following questions of law:- (i) Whether in the facts and circumstances of the case, the Income-Tax Appellate Tribunal was justified to uphold the addition made on assessment as also the enhancement made in the first appeal altogether ignoring the pleadings supported by paper-book filed explaining the disbursal of wheat bags received and noticed by the survey party? ITC No.65 of1998 (ii) Whether in the facts and circumstances of the case, the Income-Tax Appellate Tribunal was justified to adjudicate the appeal entirely relying on pleadings in first appeal altogether ignoring the facts/figures before it? (iii) Whether order passed by the Income Tax Appellate Tribunal ignoring unassailable evidence on record, constitutes violation of principles of natural justice? (iv) Whether in the facts and circumstances of the case, finding of the Tribunal could be termed as perverse and conclusion vitiated, having been arrived on the basis of both relevant and irrelevant material altogether ignoring vital material convassed during hearing proceedings? (v) (i) Whether in the facts and circumstances of the case, the conclusion arrived at by the Income Tax Appellate Tribunal could be rightly termed as perverse in as much as the Tribunal having made figures of wheat arrival as per A.D.E.S.C. register as the basis, failed to adopt figures for outgoings also as per that very register, resulting in vitiation of judgment?” 3. The assessee is a commission agent. During survey under Section 133-A of the Act on 23.6.1987, a comparison was made between entries in the record of the assessee and in the record of the Market Committee and Food and Supply Department. On account of discrepancies noticed, a questionnaire was issued and on consideration of the matter, additions were made to the income of the assessee and penalty was also levied. The CIT(A) not only upheld the additions but 2 ITC No.65 of1998 also made further addition after following due procedure. The Tribunal affirmed the order of the CIT(A). The petitioner, thereafter, sought reference under Section 256(1) of the Act, which has been declined. 4. We have heard learned counsel for the parties. 5. Learned counsel for the petitioner submits that enhancement of addition was not justified as discrepancies in record noticed by the survey party were duly explained. 6. Learned counsel for the revenue submits that no referable question of law arises in view of concurrent finding of facts recorded by the CIT(A) and the Tribunal. 7. After due consideration of rival submissions, we do not find any merit in these petitions. The CIT(A) held as under:- “2.7. I have considered the rival submissions. From the facts cited above, it is noted that the appellant had failed to explain the discrepancy in respect of wheat recorded in the register of ADFC and the Market Committee and that in the heap register. There may be some discrepancy in the weight when the same is recorded in the heap register, but the discrepancy in the present case is so huge that it cannot be explained away by merely relying upon an extract from the Punjab Market Committee. Bye laws in the absence of any positive evidence with the appellant. As regards the contention of ld. counsel that six farmers never unloaded their agril. produce at the shop of the appellant, it is noted that this plea was taken only after the enhancement notice was issued and on the last date of hearing i.e. 7.2.1991. Such a plea was never taken before Ld. ITO. Six Affidavits of such farmers are not entertained because these constitute additional evidence and has been created at belated stage to explain away the discrepancy. These six affidavits are self serving statements because it is not understood as to whom the goods of these farmers, which had allegedly been not unloaded, were entered by the Market Committee and 3 ITC No.65 of1998 the DFSO in their respective statutory registers. Further, if any such thing had happened, the same would have been noted by Ld. ITO because it is noteworthy that Ld. ITO gave credit for 900 bags, which were returned to the farmers. Accordingly, I hold that the additions made by the Ld. ITO is justified and further the income deserves to be enhanced by an amount of Rs.111020/-. This ground accordingly fails and further the income is enhanced by Rs.111020.” 8. The above observations have been reiterated by the Tribunal. The finding concurrently recorded by the CIT(A) and the Tribunal is based on appreciation of material on record and is not shown in any manner to be perverse. 9. Accordingly, no referable question of law arises. The petitions are dismissed. A photocopy of this order be placed on the file of other connected case. (ADARSH KUMAR GOEL) JUDGE January 07, 2011 (ALOK SINGH) ashwani JUDGE 4 "