Shri Gyan Kumar Agarwal [HUF] V. The Asst.Commissioner of Income Tax

ITTA/196/2012

AI Insights

The case involves multiple appeals filed by Shri Sunil Kumar Agarwal and Shri Gyan Kumar Agarwal against the orders of the Income Tax Appellate Tribunal, Hyderabad, which confirmed the additions made by the Assessing Officer regarding undisclosed income for the block period from 1997-98 to 2002-03. The appellants contended that the investments in shares were made in 1994 and thus outside the relevant block period. However, the authorities found that these investments were not disclosed in earlier assessment years and were part of the undisclosed income for the block period. The High Court, after considering the submissions and evidence, upheld the decisions of the lower authorities, dismissing the appeals.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 752675 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 23-12-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K CHOUDARY
• Assessee Lawyers: A V A KARTIKEYA
• Keywords: Appeal; Assessment Order; Block period; Income Tax; Income tax appellate tribunal; Search and seizure; Undisclosed income
• Section: 132; 68; 69; 69C; 69B; 69A; 158BC; 158BD; 260A; 158BB(2)

Judgement Text

"[ 34{8 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD MONDAY, THE TWENTY THIRD DAY OF DECEMBER TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE THE CHIEF JUSTICE ALOK ARADHE AND THE HONOURABLE SRI JUSTICE J SREENIVAS RAO INCOME TAX TRIBUNAL APPEAL NOS: 47 AND 48 OF 2008 188 AND 176 0F 2012 INCOME TAX TRIBUNAL APPEAL NO: 47 OF 20OB Appeal filed under Section 2604 of the Income Tax Act, 1961 against the Order dated 19-'10-2007 passed in l.T.(SS)A.No. 137tHydt200 for the Block period 1997-98 to 2002-03 & upto 21-01-2003 on the file of the lncome Tax Appellate Tribunal, Hyderabad Bench 'A', Hyderabad, preferred against the Order dated 22-08- 2005 passed in Appeal No. 0420, 0422 &0423tCC-1, Hyd/CtT(A)-llHYD/2004-05 on the file of the Commissioner of lncome Tax (Appeals)-|, 3'd Floor, Aayakar Bhavan, Basheerbagh, Hyderabad, preferred against the Assessment Order datgd 2841- 2005 passed in PAN/GIR No. AAHHS0826F on the file of the Assistant Commissionef of lncome Tax, Central Circle-|, Hyderabad. Between: Shri Suni Aganral (HUF), 15-9-480, Mahaboobgunj, Hyderabad ...Appellant AND The Assistant Commissioner of lncome Tax, Central Circle-1, Hyderabad ...ResIrondent INCOME TAX TRIBUNAL APPEAL NO: 48 OF 2008 Appeal filed'under Section 2604 of the lncome Tax Act, '1961 against the Order dated 19-10-2007 passed in l.T.(SS)A.No. 138/H{d/2005 for the Block Period 1997-98 to 2002-03 & upto 21-01-2003 on the file of the lncome Tax Appellate Tribunal, Hyderabad Bench 'A', Hyderabad, preferred against the Order dated 22-08- 2005 passed in Appeal No. 0420, 0422 & O423|CC-1 , Hyd/ClT(A)-llHYD/2004-05 on the file of the Commissioner of lncome Tax (Appeals)-|, 3'd Floor, Aayakar Bhavan, Basheerbagh, Hyderabad, preferred against the Assessment Order dated 31-01- 2005 passed in PAN/GIR No. ABGPA5781M on the file of the Assistant Commissioner of lncome Tax, Central Circle-1, Hyderabad. Between: Shri Suni Aganval (lndl), 15-9480, Mahaboobgunj, Hyderabad ...Appellant AND The Asst, Commissioner of lncome Tax, Central Circle-1, Hyderabad ...Respondent INCOME TAX TRIBUNAL APPEAL NO: {88 OF 2012 Appeal filed under Section 260A of the lncome Tax Act, 1961 against the Order dated 28-02-2006 passed in l.T.(SS)A.No. 151lHydl2005 for the Block Period 1997-98 to 2002-03 & upto 2'l-01-2003 on the file of the lncome Tax Appellate Tribunal, Hyderabad Bench 'B', Hyderabad, preferred against the Order dated 02-09- 2005 passed in Appeal No 0424lCC-1, Hyd/ClT(A)-llHYU2004-O5 on the file of the Commissioner of lncome Tax (Appeals)-|, 3d Floor, Aayakar Bhavan, Basheerbagh, Hyderabad, preferred against the Assessment Order dated 31-01-2005 passed in PAN/GIR No. ABGPASTB0L on the file of the Assistant Commissioner of lncome Tax, Central Circle-|, Hyderabad. Between: Shri Gyan Kumar Aganrval (lndl), 15-9-480, Mahaboobgunj, Hyderabad ...Appellant AND The Asst. Commissioner of lncome Tax, Central Circle-|, Hyderabad ...Respondent INCOME TAX TRIBUNAL APPEAL NO: 196 0F 2012 Appeal filed under Section 260A of the lncome Tax Act, 1961 against the Order dated 28-O2-20OO passd in l.T.(SS)A.No. 139tHydt2OO5 for the Block Period 1997-98 to 2002-03 & upto 21-01-2003 on the file of the lncome Tax Appellate Tribunal, Hyderabad Bench 'B', Hyderabad, preferred against the Order dated 22-08- 2005 passed in Appeal No. 0420, 0422 & 0423lCC-1, Hyd/ClT(A)-llHYD/04-05 on the file. of the Commissioner of Income Tax (Appeals)-I, 3'd Floor, Aayakar Bhavan, Basheerbagh, Hyderabad, preferred against the Assessment Order dated 31-01- 2005 passed in PAN/GIR No. AABHG9783M on the file of the Assistant Commissioner of lncome Tax, Central Circle-|, Hyderabad- Between: Shri Gyan KumarAgarwal [HUF], 15-9-480, Mahaboobgunj, Hyderabad ...Appellant AND The Asst. Commissioner of lncome Tax, Central Circle - '1, Hyderabad ...Respondent Counsel for the Appellant in All the Appeals MrAVASivaKartikeya Counsel for the Respondent in All the Appeals Ms K Mamata Choudary Senior Standing Counsel for lncome Tax Department The Court delivered the following Common Judgment : 1. THE HON'BLE THE CHIEF JUSTICE ALOK ARADHE AND THE HON'BLE SRIJUSTICE J.SREENIVAS RAO l.T.T.A.Nos.47 AND 48 OF 2008 188 AND 196 0F 2012 COMMON JUDGMENT: (Per the Hon'ble Sri Jusfrbe J. Sreenivas Rao) Mr. A.V.A.Siva Kartikeya, learned counsel for the appellants. Ms. K.[Vlamata Choudary, Iearned Senior Standing Counsel for lncome Tax Department appears for the respondent. 2. |.T.T.A. Nc,.47 of 2008 and |.T.T.A. No.4B of 2008 are filed against the common order dated 19.10.2007 passed by the lncome Tax Appellate Tribunal, Hyderabad Bench 'A' in I.T. (S..S.) A.No. 1 37lHyd 12005 and l.r. (S. S. ) A. No. 1 3B/Hyd/2005. 3. |.T.T.A. No.18B of 2012 and t.T.T.A..No.196 of 20iZ are filed against the common order dated 28.02.2000 passed by the Income Tax Appellate lribunal, Hyderabad Bench 'B' in l.T (S.S.) A. No.'1 5 1 /Hyd/2005 and l.T. (S.S. ) A. t Jo.'t 39/Hyd/2005. 4. These appeals filed under Section 2604 of the lncome Tax Act, 1961 (hereinafter referred to as 'the Act') were admitted on the following substantial question of law: 2 \"Whether on the facts and circumstances of the case, the Tribunal erred in holding that the assessee had not discharged the burden of proof and rebutted the presumption available to the revenue under Section '132(44) of the lncome Tax Act, 1961 while confirming the addition made by the Assessing Officer?\" 5. A common substantial question of law arises for consideration in these appeals. Therefore, these appeals were heard analogously and are being decided by this common judgment. For the facility of reference, facts from l.T.T.A.No.47 of 2008 are being referred to infra. 6. On 21.01.2003, search and seizure operations under Section 132 of the Act were conducted at the residential premises of assessee namely Mr. Sunil Kumar Agarwal, his brother Mr. Gyan Kumar Agarwal and other members of his family. ln the said Search and seizure operation, photo copies of share certificates of M/s. Jivika Leasing and Finance Limited were noticed. The said share certificates are in the name of the assessee, Mr. Gyan Kumar Agarwal and members of his family. ln order to verify the source of genuineness for investing in the shares, notice under Sectionl5S BD of the Act, dated 04.07.2003 was issued. ln response, the assessee filed return of income for the block period of Assessment Years from 1997-98 to 2002-03 and for the period from 01 .04.2002 lo 21.01.2003 in Form No.2B on 04.08.2003 declaring undisclosed income as 'NlL'. The / - 3 assessee and his family members stated before the Assessing officer that entire investment for ailotment of shares on the non-existing persons was a sham transaction and further submitted that the investment was made in the year .1994 only. Therefore, investment made by the assessee in the year'rgg3-94 does not fail within the block period and there cannot be any addition with regard to the investment made in the shares. 7. The Assistant Commissioner of lncome Tax after due verification of the records and after considering the reply submitted by the assessee, passed assessment order on 2g.01 .2OOS holding that the assessee's urrdisclosed income for the block period is Rs.6,54,200A and after deducting the tax, the assessee is liable to pay balance tax for an amount of Rs.4,.12,.158/_ and penalty under Section 158 BC and 158 BD of the Act. Aggrieved by the said order, the assessee fired appear before the commissioner of rncome Tax (Appeals)-|, Hyderabad and the appelrate authority dismissed the appeal by its common order dated Z2.OI.ZOOS. Thereupon, the assessee fited appeal vide l.T. (SS) A.No.137tHydl2OOS before the lncome Tax Appeilate Tribunar, Hyderabad Bench ,A, and the same was dismissed on 19.10.2007. ln the above said factual backdrop, the assessee has?pproached this Court by filing this appeal. 4 8. Learned counsel for the assessees submitted that the assessee himself admitted that the purchase of shares in M/s. Jivika Leasing and Finance Limited in fictitious names and the entries were recorded in the books of accounts of the Company for the assestment year '1995-96 and the transaction fell outside purview of the block period. lt is further submitted that in the absence of any evidence, the Assessing Officer came to conclusion that the undisclosed income is for the block period i.e., 1997-98 to 2002-03 and for the period 01.04.2002 to 21 .01 .2003 is perverse. lt is contended that the Commissioner of lncome Tax (Appeals)-1, Hyderabad and Tribunal affirmed the order of Assessing Officer without properly considering the grounds of the appeal. 9. lt is contended that the assessee invested in the shares in the year 1994 in the name of fictitious persons who are not in existence, therefore, it falls beyond the block period. lt is submitted that the assessee discharged his initial burden to prove the factum that the undisclosed income not pertaining to the above said block period. ln spite of the same, the Tribunal erred in holding that the assessee has not discharged the burden, is contrary to the evidence on record. 5 .,.r,-' 10. Per contra, learned Senior Standing Counsel for lncome Tax Department submitted that the Assessing Officer after due verification of the records passed the order on 28.01 .2005 by giving cogent findings and the said order was confirmed by the Commissioner of lncome Tax (Appeals)-1, Hyderabad and further the appellate Tribunal also dismissed the appeal and confirmed the orders of the Commissioner of lncome Tax (Appeals)-|, Hyderabad. lt is also argued that the findings of fact recorded by the Assessing Officer of lncome Tax as well as the Tribunal do not suffer from any infirmity warranting interference of this Court in these appeals under Section 2604 of the Act. 11. We have considered the rival submissions made by both sides and have perused the record. The main grievance of the assessee is that he invested in the shares in the 'year '1994 in the name of fictitious persons who are not in existence and the same falls beyond the block period concerned. The Tribunal while dismissing the appeal specifically held that the investment made by the assessee had not been disclosed to the lncome Tax Department even in the eadier assessment years. lt was further held that as per Section 1SB BB(2), in computing the undisclosed income of the block period, the provisions of Sections 68, 69, 694, 698 and 69C of the Act will apply 6 and the reference to the financial year in those Sections shall be construed as reference to the relevant previous year falling in the block period including the previous year ending with the date of search or requisition. The Tribunal after considering the provisions of Section 698 of the Act held that the assessee was found to be the owner of the valuable article and the amount of investment on such valuable article shall be deemed to be the income of the assessee in the financial year in which such valuable article was found' 12. Admittedly, the search operation took place on 21 01 2003 and the revenue authorities found the share certificates and the assessee was the owner of the valuable article i.e., share certificates' The record discloses that the assessee has not placed any iota of evidence to establish that the investment was made in the year 1994' It is trite law that the initial burden lies upon the assessee to prove the claim that the investment was made in the year 1994 and the same is notpertainingtotheblockperiod.Thefindingsoffactrecordedbythe authorities under the Act are based on meticulous appreciation of evidence on record. 13. The appellate Tribunal while dismissing the appeal, confirmed the order of the Commissioner of lncome Tax (Appeals)-|, Hyderabad J 7 as well as the order of the Assessment Officer, by giving cogent reasons taking into account of the provisions of the Act. 14. This Court in an appeal under Section 2604 of the Act cannot interfere with the findings of fact until and unless the same are shown to be perverse or based on no evidence. The findings of fact recorded by the authorities cannot be termed as perverse 15. ln view of the preceding analysis, the substantial question of law is answered against the assessees and in favour of revenue. 16. ln the result, we do not find any merit in these appeals. The same fails and are hereby dismissed. No costs. Miscellaneous petitions, pending if any, shall stand closed. /ffRUE COPY// Sd,- K. SRINIVASA RAO JorNT REGISTRAR ') SECTION OFFICER To, 1. The lncome Tax Appellate Tribunal, Hyderabad Bench 'A\" Hyderabad 2. The lncome Tax Appellate Tribunal, Hyderabad Bench 'B', Hyderabad 3. The Commissioner'of lncome Tax (Appeals)-;, 3'd Floor, Aayakar Bhavan' Basheerbagh, HYderabad 4.TheAssistantCommissioneroflncomeTax,CentralCircle-l,Hyderabad 5. one CC to Ms K Mamata Choudary, Senior Standing Counsel for lncome Tax Department [OPUC] 6. One CC to Mr A / A Siva Kartikeya, Advocate IOPUC] 7. Two CD Copies Vtugh % I HIGH COURT DATED:2311212024 COMMON JUDGMENT lTTA.Nos.47 & 48 of 2008, 188 & 19G ot 2012 DISMISSING ALL THE APPEALS ,{ W "