Uttam Chand Sethai V. The Asst. Commissioner of Income Tax, Central Circle 5, Sakkar Bhavan, Hyderabad

ITTA/403/2006

AI Insights

The case involves Uttam Chand Sethai, the appellant, contesting the orders of the Income Tax Appellate Tribunal and the Commissioner of Income Tax (Appeals), which pertained to the assessment of undisclosed income for the block period from 1991-92 to 2001-02. The primary issues revolved around the method used for calculating profit and income, the appropriateness of the profit rate applied by the assessing officer, and the treatment of certain cash amounts found during searches. The Tribunal had adopted a profit rate of 15%, which the appellant argued was arbitrary and not based on comparable cases. The High Court, after reviewing the submissions and the Tribunal's findings, dismissed the appeal, agreeing with the Tribunal's assessment and findings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 684950 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 07-06-2023
• Assessment Year: misc
• Other Referred Cases: P. Koteshwar Rao case, 123 ITR 457 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K CHOUDARY
• Assessee Lawyers: CHALLA GUNARANJAN
• Keywords: Appellate Tribunal; Block period; Income Tax; Profit Rate; Telescoping; Undisclosed income
• Section: 260; 2(60A)

Judgement Text

"t 3311 I IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD WEDNESDAY THE SEVENTH DAY OF JUNE TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI tNcOME TAX TRIB UNAL APPEAL NO: 403 OF 2006 (lncome Tax Tribunal Appeal Under Section 260 of the lncome Tax Act, against the order of the lncome Tax Appellate Tribunal, Hyderabad Bench ' B ', Hyderabad in lT(S.S.) A.No., 109Hyderabadl2003, Block period 1991-92 to 2001-02, dated 27 -02:2006, preferred against the Order of the Commissioner of lncome Tax(Appeals) - I Hyderabad, Appeal No.0412lCC-5, Hyd. C|T(A)-1102-03, dated 30-06-2003, preferred against the order of the Assistant commissioner of lncome Tax Central Circle-S, Hyderabad, PAN/GlR No.K-704ICC-5 , dated 22-02-2022) Between: Uttam Chand Sethai, S/o Jawarilal Sethai Rl/o Plot no.63, Temple Rock Enclave, Tadbund, Secunderabad. ...APPELLANT AND The Asst. Commissioner of lncome Tax ,, The Asst. Commissioner of lncome Tax, Central Circle 5, Sakkar Bhavan, Hyderabad. ...RESPONDENT Counsel for the Appellant: Mr. CHALLA GUNARANJAN Counsel for the Respondent: Ms. K. MAMATA CiOUOlny The Court made the following: THtr IoN'BLE THE CHIEF IUSTICE UIIAL }iI]UY_AN AND ,FtE HON'BLE SRI IUSTICE N.TLKAR.ANII I.T.T.A.No.403 of 2006 JUDGVENT ti tt,' t t)n'blc lhe t.hi,1 [loti;c ttlo/Bhryan1 lle rrd r. Challa Gr.uraranjan, leamed counsel':, rr t1e appellant and N4s. K.N rrnata Choudary, leamed Senior Star dirLg Cbunsel, Inconre Thx D rpartment lror the respondent. 2. This aop :al has been preferred by the assesser rs the appellant under Se<:tion 2(,0A of the Income Tax Act, t961 i:riefly the Act' hereinafter) :rqr irsr the order darcd27.02.2006 passe: ry rhe Income Ta-x Appellatc' 'ribunal, Hyderabad Bench'B', I{yderrbad (brietly the Tribtural' her-ei rafter) rn I.T.(S.S.)ANo.109/H1d,/20 ):' for the block period t9tlt- 1!) t2 ,,, 2aal2aa2. 3. 'fhc,ug:r hs eppeal was admimed on 13.1C.2005. no substantial questions oi h' ,.rere framed. However, we find that i:r tle memo of appeal, appell,rr t has proposed the following questio::; as substantial questi()ns lf ar': 1. Xhether r n the facts and in the circumstan,:es of tlre t:ase, the 'methoc ;rco1 reJ ior arriving the profit and income lr uot )erverse and u.'huns ic: I i 1 : 2. Xthether on the facu and in the circumstances of the case, the order of the Income Tax Appellate Tribunal is pervene, \"bi'oty, without any basis, illegal and a prejudicial one ? 3. lXihether on the facts and in the circumstances of the case, when comparable cases disclosing a profit rate of 5olo and even Iess are relied by the appellant before the xsessing officer and more panicularly the case of P.Koteshwar Rao in similar illegal trade, the Appellate Tribunal trnoring them could hold artitmrilyand without any basis that the profit rate adopted bythe assessing o{ficer at l5'/o is fair and right and whether such a finding, not based on any material or comparable cases' could be justified and not pervene ? 4. X4rether on the facts and in the circumstances of the case, the finding of the Appellate Tribunal that the asssessing officer was not only considerate but also conservarive in estimating the profit at 15olo is based on any material evidence or comparable cases when assessing officer himself does not rely on any comparable cases to esrirrDte profit at 15olo and r+rether such finding is illegal, artrfurary without any basis and unjust ? 5. flhetier on the fafis and in the circumstances of the case, the finding of the Tribunal that telescoping could not be allowed as claimed by the appellant in respect of Rs'4,05,125l- is perverse' illegal without any basis and unjust as cash seized is very much related to ttle undisclosed income eamed by the appellant during this rrear which was available in cash and in view of the decision of ,/ fi Suprr^, C-ourt in l23ITR457 (Sg it is very much real income / available and as such no addition of it could be made ? 6. Whether on the facts and in the circumstances of the case, the Tribunal was nght in reiecting the claim of t}le appellant for a :l 3 exclusi,)n o[ R;.5,46,000 being cash found at the tim: >f s earc].r as fon-ninq [,:rr of the income from trading in the rlrs,:nc,: of the fin,ling rn r c, p,:ct of arl, other solrrce of income ? lmpus113 i rrder of the Tribunal dated 27.02.2C0,. is a common order passed i r I.T.(S.S.)ANos.1O8, 109, 112, a:nd lL3/H,d/2a$. By a seDant( older passed today, this (ilun lras dismissed I.T.T.I .No.4C. r:f 2006 filed by one Vijay Raj Sethia a 3airst the said common,rrder drted 27.A2.20A6 passed bythe Iriburrrl ir, respect of I.T.(S.S.)A..No a)/Hyd/2aa3 for the block pe;ir:d l99l-1992 rc 24c1.-2)0; The qr.restions of law raised in borh tht:se appeals being simLlar, t lc prcsent appeal can also be dismis;e 1c,n the very same rcaso ns. 5. . cc.rrcin ;l'i rhis appeal is dismissed. No costs closed s rr :;e < u,:1, miscel.laneous peritions, pendin u if any, stand /' Sd/,K SRINIVASA RAO \"'()IN T REGISTRAR /iTRUE COPY// ex) SEC]'ION OFFICER To, 1. Tlre lnr;or .ttr Tax Appellate Tribunal' Hyde^': cacl Bench 'B\" Hyderat,at The Cornr is,sioner of lncome Tax(Ap peals) - lllyJerabad' The Assil tant Hyderatra, , One CC to Mr. Commissioner of lncome Tar rlentral Circle-5' One (lC [o Vlr; 'fwo ('l) (' rPi DI, 4 2 a 4 6 CHALLA GUNARANJAN, Advocate [r-tl:'1\":] K. IUAIVATA CHOUDARY' Advocittt [oPUC] CS M, HIGH COURT DATED:07/06/20:23 ORDER ITTA.ltlo.403 of 200r DISMISSIN(I 'IIIE , P 'I A1- /. ,4 :.., \" ').' \"-\"' 1 1il l lt 2t8 7-l rt tl .:.' /a- _-'- Nt 1 ,'t.a ? ')-'2 ri- .... -a -a'- -' I "