Delhi High Court
Cit vs Kalindee Rail Nirman (Engg.) Ltd. on 17 August, 2006
Bench: M B Lokur, V Sanghi
ORDER
1. This appeal is under Section 260A of the Income Tax Act, 1961 is directed against the order of the Income Tax Appellate Tribunal, Jaipur Bench B, Jaipur in respect of ITA No. 265/JP/2003 relevant for the assessment year 1989-90.
2. At the outset, learned Counsel has explained that since the jurisdiction in respect of the assessed has been transferred to Delhi, the appeal is maintainable in this Court. We need not go into this aspect of the matter because on merits we find that no substantial question of law has arisen in this appeal.
3. The first grievance of the revenue is with regard to the deletion of an addition of Rs. 3,30,000 made by the assessing officer on account of bogus share capital. The Commissioner (Appeals) upset the view taken by the assessing officer and this was upheld by the Tribunal.
4. It has been noted that some shares were discovered lying in the premises of the assessed, as a result of action taken by the revenue under Section 132 of the Act. The explanation given by the assessed was that the shares were in odd lots and that they were converted into marketable lots after cancellation. No fresh issue of shares was made during the year in question. There was no introduction of any money in the books of the assessed and, therefore, there was no question of any addition on account of investment made by the assessed.
5. The Tribunal noted that when the books of the assessed were closed, the share capital was Rs. 28,15,000 which had remained unchanged. The Tribunal noted that the assessing officer did not bring any material on record to show that there was any investment of any person within the company or any investment by the company in purchasing shares from different persons. There was no introduction of any money one way or the other and there was no material in this regard. Consequently, it was held that the assessing officer could not assume that the assessed had made any investment out of its books of account.
6. We find that in view of these facts, since the explanation of the assessed appears to be plausible, inasmuch as there was no change in the share capital, the Commissioner (Appeals) and the Tribunal were justified rejecting the view taken by the assessing officer. This concurrent finding does not raise any substantial question of law, warranting any consideration by us, being essentially a finding based on facts.
7. The second grievance of the revenue is that both the Commissioner (Appeals) and the Tribunal erred in deleting a trading addition of Rs. 9,16,000.
8. It appears that during the search some undated documents were found which showed certain calculations having being made. The assessed explained that apart from the fact that the documents were undated, they represented some estimates and budgeting that may have been done in respect of contracts entered into between the assessed and the Railways, the sole client of the assessed. It was submitted by the assessed that summons may be issued to the Railway authorities so that the facts could be verified from them. Unfortunately, the assessing officer did not issue any summons to the Railway authorities or make any enquiry from them.
9. On some ex-cathedra basis, the assessing officer deducted an amount of Rs. 42 lakhs from the total arrived at on the basis of these documents which was Rs. 168 lakhs and decided to add a sum of Rs. 86 lakhs. Apart from the fact that the arithmetical calculation is into correct, the Tribunal found as a matter of fact that there was no defect in the contract receipts declared in the books of account of the assessed which were duly audited. The explanation of the assessed that the documents represented certain calculations based on estimates and budgeting for the purposes of executing the contracts is a plausible explanation. There was no material on record to show that these documents represented certain works that may have been done by the assessed for the Railway authorities outside the books of account.
10. Again, we find this to be question of that that has been adjudicated upon by the Commissioner (Appeals) as well as by the Tribunal.
11. Learned Counsel for the revenue has relied upon the provisions of Section 132(4A) of the Act but we find that the provision does not come to the aid of the revenue at all. Section 132(4A) of the Act says that documents may be presumed to belong to the assessed, which is not disputed, the contents of the documents may be presumed to be true, which is also not disputed and that it may be presumed that the documents are in the handwriting of the assessed, which again is not disputed. None of these presumptions lead to the conclusion that the amounts represented in these documents refer to the turnover of the assessed or that the explanation given by the assessed that these estimates made for budgeting purposes are incorrect.
12. Learned Counsel for the revenue submits that the assessed has admitted that a sum of Rs. 80 lakhs should be added to the turnover but that the gross profit should not be 11 per cent but should be 8 per cent. We do not find any such material on record in this regard and, therefore, do not consider this submission to be of any consequence.
13. Learned Counsel for the revenue also submits that a similar question of law has been admitted by the Rajasthan High Court for the assessment year 1995-96 but again we do not find anything on record in this regard, nor do we have the facts of the Rajasthan case before us.
14. Since no substantial question of law has arisen, this appeal is dismissed.
