Principal Commissioner Of Income ... vs Shri Kanti Prasad Kedia
2022 Latest Caselaw 480 Cal/2

Form No.(J2)

                         IN THE HIGH COURT AT CALCUTTA
                       SPECIAL JURISDICTION (INCOME TAX)
                                 ORIGINAL SIDE


Present :

THE HON'BLE JUSTICE T.S. SIVAGNANAM

                     A N D

THE HON'BLE JUSTICE HIRANMAY BHATTACHARYYA


                                    IA NO.GA/2/2018
                                 (Old No.GA/574/2018)
                                      ITAT/57/2018

               PRINCIPAL COMMISSIONER OF INCOME TAX-3, KOLKATA
                                     -Versus-
                            SHRI KANTI PRASAD KEDIA


For the Appellant:     Mr. Smarajit Roychowdhury, Adv.
                       Mr. Manabendranath Bandopadhyay, Adv.

For the Respondent: Mr.      Nageshwar Rao, Adv.

                    Mr.      Avra Majumdar, Adv.
                    Sk.      Md. Biswal Hossain, Adv.
                    Mr.      Shatnik Chakraborty, Adv.
                    Ms.      Viyushi Rawat, Adv.




Heard on : 15.02.2022

Judgment on : 15.02.2022

T. S. SIVAGANANAM, J. : This appeal by the revenue filed

under Section 260A of the Income Tax Act, 1961 (the 'Act' in

brevity) is directed against the order dated 31st March, 2017

passed by the Income Tax Appellate Tribunal, Kolkata "B" Bench

(the 'Tribunal' in short) in IT(SS)A No.104/Kol/2008 for the block

period 1.4.1988 to 12.03.1999.

The revenue has raised for the following substantial

questions of law for consideration:

"(a) Whether on the facts and the circumstances of the case, the Learned Tribunal has erred in law as well as on fact in deleting an amount of Rs.7.10 crores which was voluntarily disclosed by the assessee himself in his return of income for the block period from 1st April, 1988 to 12th March, 1999 ?

(b) Whether on the facts and the circumstances of the case, the Learned Tribunal has erred in law as well as on fact in confirming the decision of the CIT(A) regarding the deletion of the addition of Rs.73,04,75,000/- made by the assessing officer towards contribution of share capital by the assessee to 117 companies out of undisclosed income ?

(c) Whether on the facts and the circumstances of the case, the Learned Tribunal has erred in law as well as on fact in deleting the addition of Rs.10,29,45,776/- towards the cash deposited in various bank accounts of the proprietary concerns of the benamdar of the assessee for which the assessee could not substantiate the source of deposit and even the addition was confirmed by the CIT(Appeals) ?

(d) Whether on the facts and the circumstances of the case, the Learned Tribunal has erred in law as well as on fact in deleting the addition of

Rs.10,00,00,000/- towards income out of shares dealing for assessment year 1992-93 which was confirmed by CIT(A) and which was in fact stated by the assessee himself as his income during recording of his statement ?

(e) Whether on the facts and the circumstances of the case, the Learned Tribunal has erred in law as well as on fact in deleting Rs.7.10 crores which was in fact the returned income of the assessee in response to notice under Section 158BC (a)(ii) of the Income Tax Act, 1961 ?"

We have heard Mr. Smarajit Roychowdhury, learned counsel

assisted by Mr. Manabendranath Bandopadhyay, learned advocate for

the appellant/revenue and Mr. Nageshwar Rao, learned counsel

assisted by Mr. Avra Majumdar, learned Advocate for the

respondent/assessee.

First we take up the substantial questions of law (a) and

(e) together as suggested by the revenue. These pertain to

deletion of an amount of Rs.7.10 crores which was disclosed by the

assessee in the return of income filed pursuant to notice under

Section 158BC(a)(ii) of the Act. In fact, this issue was not

raised before the Commissioner of Income Tax (Appeals)-VI, Kolkata

(CIT(A) when the assessee challenged the order of assessment dated

28th March, 2001. However, the assessee was on an appeal before

the tribunal on the said issue. The tribunal considered the

contentions of either side and set aside the finding of the

assessing officer with regard to the addition of Rs.7.10 crores

and restored the matter back to the assessing officer to examine

the seized materials and re-compute the income of the assessee for

the block period. The learned counsel for the respondent/assessee

submits that the order passed by the tribunal has been given

effect to and the assessing officer has passed an order which is

adverse to the interest of the assessee and the assessee is

pursuing further remedies against the said order. Thus, in our

considered view, there is no substantial question of law arising

for consideration with regard to the questions suggested in (a)

and (e) above. Therefore, the same are rejected.

The other three substantial questions of law also pertain

to deletion of certain additions which have been made towards

contribution of share capital by the assessee to 117 companies;

deletion of addition of Rs.10,29,45,776/- towards cash deposits

and deletion of addition of Rs.10 crores towards income out of

shares. Theses issues have been dealt with by the tribunal as

mentioned below:

So far as substantial question of law (b) is concerned,

the discussion in the order passed by the tribunal is in paragraph

4. On reading of the said paragraph, we find that the tribunal

has re-appreciated the facts which were available on record while

affirming the order passed by the CIT(A). In fact, it has

rendered a finding that the assessing officer without bringing any

evidence to show that the companies which are legal entities and

assessed to tax every year have not disclosed the paid-up or less

paid-up capital, the amount of paid-up capital which have been

disclosed in its balance-sheet every year. There are other

findings of fact as well. Thus, we find that there is no

substantial question of law arising on the said issue.

Accordingly, the substantial question of law (b) as suggested

stands rejected.

With regard to substantial question of law (c) is

concerned, the discussion is in paragraph 6 of the order passed by

the tribunal. After analysing the facts, the tribunal concluded

that addition made by the assessing officer is not on the basis of

evidence or material to even remotely suggest that the cash

deposited in bank accounts belongs to the assessee and the

addition was totally contrary to the findings recorded at various

places in the assessment order and accordingly deleted the

addition. Here also we find that a thorough investigation of the

factual position has been done by the tribunal while granting

relief to the assessee and we do not find any substantial question

of law arising for consideration on the said issue.

The next issue concerns the deletion of addition of Rs.10

crores which is suggested as substantial question of law (d)

above. The tribunal has considered the same and once again re-

appreciated the factual position and that the assessing officer

himself has rendered a finding that the assessee is not a man of

means and he has also accepted that he has engaged only in the

name lending and providing accommodation entries for a small

commission. Further, factual analysis have also been made and it

has been held that addition based on statement alone which has

been recorded when the assessee was mentally disturbed cannot be

sustained. In this regard it will be beneficial to note the

circular issued by the CBDT dated 10th March, 2003 wherein the

Board has stated that confession during the course of search,

seizure and survey operations did not serve any useful purpose and

the assessing officers were advised that there should focus and

concentrate on collection of evidence of income which leads to

information on what has not been disclosed or is not likely to be

disclosed before the Income Tax Department. Further, it has been

mentioned that while recording statement during the course of

search and seizure operation, no attempt should be made to obtain

confession as to the undisclosed income. Thus, we are of the clear

view that no question of law as suggested in substantial question

of law (d) arises for consideration on the said issue as well.

In the result, we find that there is no question of law

much less substantial question of law arises for consideration in

this appeal. Accordingly, the appeal stands dismissed.

The connected application for stay being GA/2/2018 stands

dismissed.

(T.S. SIVAGNANAM, J.)

I agree.

(HIRANMAY BHATTACHARYYA, J.)

S.Das/A/s.