Commissioner Of Income Tax vs P.S. Jain Company Ltd
2010 Latest Caselaw 750 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                  Judgment delivered on: 9th February, 2010
+      ITA 119/2010

COMMISSIONER OF INCOME TAX                                     ..... Appellant

                                       - versus -
P.S. JAIN COMPANY LTD                                       .....   Respondent

Advocates who appeared in this case:

For the Appellant           :     Ms Sonia Mathur
For the Respondent          :     Mr B.N. Goswami

CORAM:
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE SIDDHARTH MRIDUL

1. Whether reporters of local papers may be allowed to see the judgment?

2. To be referred to the Reporter or not?

       3.      Whether the judgment should be reported in
               the Digest?                                                  .

BADAR DURREZ AHMED, J (ORAL)

CM No. 1166 of 2010 (for Delay)

       The delay in filing the appeal is condoned.      The application stands

disposed of.

ITA No. 119 of 2010

1. This appeal is directed against the order of the Income Tax Appellate

Tribunal dated 5th December, 2008 in ITA No. 3804/DEL/2007 relating to

Assessment Year 2003-04. We find that the Tribunal has given findings on

three factual aspects of the matter. The first addition made by the Assessing

Officer was on account of disallowance of Rs 6,91,481/- on the ground that

there were no business activities carried out by the assessee during the

relevant period. The Tribunal has confirmed the deletion of the said amount

by the Commissioner of Income Tax (Appeals). The Tribunal came to the

conclusive finding of fact that the Assessee carried on business during the

Assessment Year 2003-04 as the Assessee did a computer programming job

for Fortis Financial Services for which payment had also been received by

the Assessee. It had also rendered financial consultancy services by

arranging a loan from CitiCorp for Oscar Investment Ltd and had received

commission. Consequently, the Tribunal held that the disallowance was

rightly deleted by the CIT(A).

2. The Assessing Officer has also made an addition on account of sale of

a shop which, according to the Assessing Officer, had an estimated value of

Rs 5,00,000/-. The shop in question was in the occupation of a tenant and

was a temporary structure known as a "khokha" and measured only about 30

sq. feet. The Assessee was receiving only a sum of Rs 47.50 per month by

way of rent in respect of the said shop.

3. It is true that the Assessee was not able to produce a sale deed in

respect of the said shop, however, the Tribunal noted that the Assessee has

produced sale deeds in respect of similar shops sold in March 1997 and

December, 1998 in the same locality. The factual position in respect of

those sale deeds in that those shops were sold for Rs 4,500/- and Rs 9,500/-.

Consequently, the Tribunal held that the sum of Rs 6,000/- indicated by the

Assessee as being the sale price of the said shop was acceptable. The

Tribunal also noted that the Assessee could not evict the tenant and as such

the Assessee decided to sell the structure to the tenant himself. The Tribunal

also came to the conclusion that there was no evidence of any additional

amount being received by the Assessee over and above the amount of Rs

6,000/- disclosed by the Assessee in his account.

4. Thus on the findings of fact, the Tribunal upheld the view taken by the

Commissioner of Income Tax (Appeals) and accepted the sale price as Rs

6,000/- and, therefore, deleted the addition made by the Assessing Officer.

5. The third addition made by the Assessing Officer was of Rs 5,000/-

on account of unexplained cash credit under Section 68 of the Income Tax

Act, 1961. The said cash credit was deleted by CIT(A) and the deletion was

confirmed by the Income Tax Appellate Tribunal. The Tribunal recorded

that there was no question with regard to the genuineness of the cash credit

and the only point raised by the Revenue was that the Commissioner of

Income Tax (Appeals) had admitted additional evidence introduced by the

Assessee at the stage of the appeal. The Income Tax Appellate Tribunal,

after referring to Rule 46A, concluded that the Commissioner of

Income Tax (Appeals) had exercised his discretion in allowing

the additional evidence and had also afforded an opportunity to

the Assessing Officer to examine the additional evidence.

The Tribunal held that since there was no challenge to the genuineness of the

cash credit, the finding of CIT(A) in deleting the said addition after

admitting additional evidence did not call for any interference.

6. We agree with the view taken by the Tribunal on this aspect of the

matter.

7. No perversity in the findings of the Tribunal has been pointed out by

the learned counsel for the Revenue. No substantial question of law arises

for our consideration. The appeal is therefore dismissed.

BADAR DURREZ AHMED,J

SIDDHARTH MRIDUL, J FEBRUARY 09, 2010 acm