Sri P. Ramachandra Gupta V.

RC/50/1999

AI Insights

The case revolves around a search conducted by the Income Tax Department at the residence of the assessee, Sri P. Ramachandra Gupta, on 31.10.1988, where 136 tulas of gold were discovered. The subsequent legal proceedings involved determining the ownership and the taxability of 55 tulas of gold, which remained unexplained after partial relief was granted in various appeals. The primary legal question was whether the Tribunal was correct in law to hold that the remaining gold was unexplained and thus taxable under section 69 of the Income-tax Act, 1961. The court found that the issues presented were factual in nature and did not involve substantial questions of law, leading to the dismissal of the assessee's arguments.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 805084 (HC-HYDERABAD)
• Appeal Type: Others
• Pronouncement Date: 11-06-2014
• Assessment Year: misc
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Respondent
• Court: HIGH COURT
• Keywords: Assessment; Gold; Jewellery; Search; Unexplained investment
• Section: 69

Judgement Text

" THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE T.SUNIL CHOWDARY R.C.No.50 of 1999 ORDER: (Per the Hon’ble Sri Justice L.Narasimha Reddy) The Income Tax Appellate Tribunal, Hyderabad Bench, referred the following two questions to this Court, at the instance of the assessee, by name, Sri P.Ramachandra Gupta: 1. “Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that jewellery to the extent of 55 tulas of gold seen at the time of the search on 31.10.1988 in the premises of the assessee was assessable in the hands of the assessee as unexplained u/s. 69 of the Income-tax Act, 1961, and that too in their entirety for the assessment year 1989-90. 2. Whether on the facts and in the circumstances of the case the finding of fact that jewellery to the extent of 55 tulas of gold is assessable in the hands of the assessee as unexplained is vitiated by non-consideration of all the relevant facts and materials.” The facts, in brief, that gave rise to the reference are that the house of the assessee was searched by the officials of the Income Tax Department, on 31.10.1988, and in addition to various items, 136 tulas of gold in different forms, was found. The gold and other recovered articles were dealt with in the returns for the assessment year 1989-1990. The assessee submitted the details of ownership of the gold items. After consideration of the evidence before him, the Assessing Authority passed order, dated 04.12.1992, granting the relief to the extent of 30 tulas of gold and the remaining 106 tulas of gold has been treated as ‘unexplained investment’ in the hands of the assessee. In the appeal preferred before the Appellate Authority, the assessee got the relief to the extent of 36 tulas of gold. In the further appeal preferred by the assessee before the Tribunal, the relief to the extent of another 15 tulas was granted. Thus, remained 55 tulas of gold as ‘unexplained investment’. It is in relation to the same, that the reference was made. Learned counsel for the applicant advanced extensive arguments, which are almost repetition of the arguments that were advanced before the Tribunal. He submits that the Assessing Authority as well as Appellate Authority and the Tribunal did not take into account, the fact that 15 tulas of gold was held by the sister-in- law of the assessee and was given for remaking of the items, the assessee himself owned about 15 tulas of gold for himself, his two daughters and a son, in all, owned 10 tulas, and 20 tulas was held by late M.V.Subbamma, grandmother of the assessee. He contends that in the nature of things, it would be difficult to prove ownership, that too in favour of the members of the family. Learned Senior Standing Counsel for the Income Tax Department, on the other hand, submits that the Tribunal ought not to have referred the questions, since they are totally factual in nature and hardly there exists any element of law in them. We have perused the orders passed by the Assessing Authority, Appellate Authority and the Tribunal. Even from a perusal of the questions referred to this Court, it is evident that hardly there is any element of law in them. The question as to whether 55 tulas of gold that has been seized during the search can be treated as assessable in the hands of the assessee, does not warrant any answer by this Court. Once the Assessing Authority did not accept the contention and treated the said quantity of the gold as ‘unexplained investment’ and the finding has assumed finality with the orders passed by the Appellate Authority and the Tribunal, it is not possible for this Court to reopen it and act as a further Appellate Authority. It is not even mixed question of fact and law. The questions of fact can also be the subject matter of reference, albeit rarely this is not such a case. Learned counsel for the assessee is not able to point out any provision of law or decided case, which enables his client to take away the quantity of the gold, referred to above, from the purview of the assessment. We, therefore, answer the questions against the assessee. The reference is accordingly answered. ____________________ L.NARASIMHA REDDY, J. ___________________ T.SUNIL CHOWDARY, J. Date:11.06.2014 KDL/GJ "