RAJAN DHIR V. PRINCIPAL COMMISSIONER OF INCOME TAX

ITA/65/2016

AI Insights

The case involves two appeals by the appellant, Rajan Dhir, against the orders of the Income Tax Appellate Tribunal, Chandigarh, concerning the assessment years 2007-08 and 2008-09. The appeals were related to the additions made to the appellant's income following a search and seizure operation under Section 132 of the Income Tax Act, 1961, conducted on the Dhir Group in 2006. The primary issues in the appeals were the treatment of certain peak credits in the appellant's bank accounts and the interpretation of cash expenditures claimed by the appellant. The Tribunal had accepted the appellant's plea to consider only the peak credits for the additions, which was contested by the Department. Additionally, the appellant's claims regarding construction expenditures and the treatment of jewelry found during the search were not accepted by the Tribunal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 761609 (HC-HIMACHAL_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 02-08-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: VINAY KUTHIALA; VANDANA KUTHIALA
• Assessee Lawyers: VISHAL MOHAN; RAJEEV KUMAR
• Keywords: Concealment of income; Income tax appeal; Incriminating documents; Peak credit; Search and seizure
• Section: 132; 68; 132(4); 260-A

Judgement Text

"IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA ITA No. 64 of 2016 a/w ITA No.65 of 2016 Decided on 2nd August, 2023 ITA No. 64 of 2016 Rajan Dhir …Appellant Vs. Principal Commissioner of Income Tax Shimla …Respondent ITA No.65 of 2016 Rajan Dhir …Appellant Vs. Principal Commissioner of Income Tax Shimla …Respondent Coram Hon’ble Mr. Justice M.S. Ramachandra Rao, Chief Justice Hon’ble Mr. Justice Ajay Mohan Goel, Judge Whether approved for reporting? For the appellant: Mr. Vishal Mohan, Senior Advocate, with Mr. Rajeev Kumar, Advocate, for the appellant, in both the appeals. For the respondent: Mr. Vinay Kuthiala, Senior Advocate, with Ms. Vandana Kuthiala, Advocate, for the respondent, in both the appeals. M.S. Ramachandra Rao, Chief Justice (Oral) In these two appeals, the assessee has invoked the provisions of Section 260-A of the Income Tax Act, 1961, challenging the orders passed by the Income Tax Appellate Tribunal Division Bench 2 Chandigarh in Income Tax Appeal No. 1152/Chd./2012, dt. 06.06.2016 and Income Tax Appeal No.1153/Chd./2013, dt. 06.06.2016. 2) Income Tax Appeal No.64 of 2016, relates to the assessment year 2007-08 and Income Tax Appeal No.65 of 2016, relates to the assessment year 2008-09. 3) The assessee had previously filed a return of income for the assessment year 2008 declaring total income of Rs.1,58,02,980/-. 4) The admitted facts are that there were search and seizure operations under Section 132 of the Income Tax Act, 1961 on Dhir Group of which appellant is a member on 10.8.2006 by the Investigation wing of the Income Tax Department. 5) The statement of the assessee under Section 132(4) of the Income Tax Act was recorded by the investigation wing of the Income Tax Department. 6) During the search, incriminating documents were found and seized from the residence and business premises of the assessee, which were then confronted to him. The assessee could not offer proper reply in support of genuineness of entries recorded on those documents and he made a surrender of Rs. 2,58,41,912/- for the financial year 2006-07 and 2007-08. 3 7) The issue arising in the ITA No.64 of 2016 is with regard to the certain peak credits, which were reflected in the bank pass book of the assessee. 8) The Assessing Officer concluded that the assessee had willfully concealed the true particulars of his taxable income and made certain additions to the income from the other sources. 9) This was questioned in appeal by the assessee before the Commissioner of Income Tax (Central), Gurgaon (the 1st Appellate Authority). 10) It was contended by the assessee before the 1st Appellate Authority that there were deposits and withdrawals in the respective bank accounts and cash deposited previously had been withdrawn and re-deposited again. 11) The 1st Appellate Authority rejected the stand of the assessee holding that the assessee had to provide evidence to examine and determine as regards the peak credit, and that the bank accounts reflect withdrawals as well as cash deposits during the year. However, it partly held in favour of the assessee by directing the Assessing Officer to determine the peak credit for the bank accounts of the assessee. 4 12) This was challenged by both the assessee as well as the Department before the Income Tax Appellate Tribunal (ITAT). 13) Before the ITAT, the assessee contended that as there were certain deposits in bank account, which were un-disclosed, so additions were made by the Assessing Officer and in the circumstances, only addition to the extent of peak credit in such bank account should be sustained. This plea of the assessee was accepted and the appeal of the revenue to tax the entire cash deposits was not accepted. 14) In this appeal, the contention is advanced by the assessee that each and every entry qua the deposits of cash has been explained and the Tribunal was not right in upholding the direction given by the CIT (Appeals) that addition of peak credit be made in respect of the deposits made in the bank, since bank pass books are not ‘books of account’ and the provisions of Section 68 of the Act are not applicable. 15) Since the assessee did not provide evidence in the nature of cash flow statement or otherwise to explain the cash deposits and withdrawals; and even then, only peak credits were directed to be taken into account; and since the assessee himself in the appeal filed by the Department had accepted that addition to the extent of peak credit in the bank account should be sustained, we find no substantial question of 5 law arising for consideration in this appeal and the same is accordingly dismissed. 16) In the other appeal i.e. ITA No. 65 of 2016, also the similar contentions regarding the addition of peak credit in bank account are raised and so the reasoning given by us in ITA No.64 of 2016 would apply to the same as well. 17) Apart from this contention in ITA No. 65 of 2016, there is another contention advanced by the assessee in this appeal. i.e., that the assessee had recorded a statement under Section 131 in regard to the assessment year 2008-09 that he had spent Rs. 60,44,000/- for construction of building and Rs. 58,37,500/- on account of investment made in cash, and these two are actually one and the same thing and this was not appreciated by the Tribunal. 18) This contention was not accepted by the Primary Authority, Appellate Authority as well as the Tribunal. 19) We agree with the findings of the learned Tribunal that the amount spent for construction of building and amount of investment, cannot be the same thing as is sought/projected by the assessee. 20) In any event, this is a pure question of fact and this question cannot be gone into in appeal of this nature. 6 21) The last contention of the assessee is with regard to certain additions on account of jewellary found at the time of search, on the basis of certain invoices discovered at that time which the assesse has disowned. 22) This also is a question of fact, which also cannot be gone into in appeal of this nature. 23) Therefore, we find no merit in these appeals and the same are accordingly dismissed. (M.S. Ramachandra Rao) Chief Justice (Ajay Mohan Goel) Judge August 02, 2023 (Vinod) "