Om Commodity Brokers V. Commissioner of Income Tax, Gurgaon and another

ITA/154/2016

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The case revolves around the tax assessment of a cash amount of \\u20b93,79,070 found during a search at the residence of Raj Kumar Jallan, a partner in M/s Om Commodity Brokers. The Income Tax Department conducted search and seizure operations, leading to the discovery of the cash, which Jallan claimed was related to his personal business and had been duly declared in his individual tax returns. However, the Assessing Officer and subsequent appellate authorities, including the CIT (Appeals) and the ITAT, concluded that the cash belonged to the partnership firm and not to Jallan personally, leading to its inclusion in the firm's taxable income. The High Court, upon reviewing the matter, agreed with the lower authorities and dismissed the appeal, stating that the issue was one of fact appreciation and not of law.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 804581 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 12-07-2016
• Assessment Year: misc
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: M R SHARMA
• Keywords: Assessment Order; Cash found; Income Tax; Search and seizure; Partner's Admission

Judgement Text

"IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA-154-2016 (O&M) Date of decision:- 12.07.2016 M/s Om Commodity Brokers ...Appellant Versus Commissioner of Income Tax, Gurgaon and another ...Respondents CORAM: HON'BLE MR. JUSTICE S.J. VAZIFDAR, ACTING CHIEF JUSTICE HON’BLE MR. JUSTICE DEEPAK SIBAL Present:- Mr. M.R. Sharma, Advocate, for the appellant. * * * * S.J. VAZIFDAR, A.C.J. (ORAL) This is an appeal against the order of the Income Tax Appellate Tribunal dismissing the appellant/assesse’s appeal against the order of the CIT (Appeals) which in turn had dismissed the appellant’s appeal against the assessment order in so far as an amount of ` 3,79,070/- was treated as a part of the appellant’s income. 2. The appellant seeks to raise the following substantial question of law:- “Whether on the facts and circumstances of the case the ITAT erred in upholding the addition of ` 3,79,070/- being the amount of cash found during search operations with Shri Raj Kumar Jallan partner of the appellant partnership firm more so when the same has been offered by him in his individual capacity to tax through the surrender made by him which has been accepted?” 3. In our view, a substantial question of law does not arise. The matter only involves the appreciation of facts. AMODH SHARMA 2016.07.14 16:52 I attest to the accuracy and authenticity of this document chandigarh ITA-154-2016 (O&M) 2 4. The search and seizure operations were conducted at the residential premises of one Raj Kumar Jallan who is one of the partners of the appellant. The said Raj Kumar Jallan also carries on business in the firm name and style of M/s D.P. Stock Brokers as the sole proprietor thereof. During the search operations, an amount of ` 3,79,070/- was found in cash of which ` 3,50,000/- was seized. The said Raj Kumar Jallan contended that the same pertains to his share in the firm’s business and the withdrawals were made by him. The Assessing Officer, however, found that no documentary evidence was produced during the course of search operations. The Assessing Officer also found a difference of ` 3,60,357/- in the books of the said Raj Kumar Jallan. The said Raj Kumar Jallan admitted the difference in the books and stated that the cash found during the operations belonged to the assessee firm. As the said Raj Kumar Jallan being a partner of the assessee firm admitted the same, the difference in the books was added back in the hands of the said Raj Kumar Jallan and the cash found at his residence was assessed in the hands of the appellant/assessee. 5. The appellant contends that the said Raj Kumar Jallan had already been subject to tax in respect even of the cash and that the same could not be brought to tax in the hands of the assessee. 6. The CIT (Appeals) and the Tribunal found as a matter of fact to the contrary. The assessment order of the said Raj Kumar Jallan for the assessment year 2008-2009 was examined and it was held that whereas the difference in the books was brought to tax in the said Raj Kumar Jallan’s hands, the cash was assessed in the case of the firm. The partner having admitted that the amount belonged to the firm the authorities AMODH SHARMA 2016.07.14 16:52 I attest to the accuracy and authenticity of this document chandigarh ITA-154-2016 (O&M) 3 were justified in treating the same as belonging to the appellant. 7. The appeal is, therefore, dismissed. (S.J. VAZIFDAR) ACTING CHIEF JUSTICE (DEEPAK SIBAL) JUDGE 12.07.2016 Amodh AMODH SHARMA 2016.07.14 16:52 I attest to the accuracy and authenticity of this document chandigarh "