Kahan Udyog vs Commissioner Of Income Tax
2013 Latest Caselaw 3617 Del

$~R-24.
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
+                   INCOME TAX APPEAL NO. 56/2000


                                        Date of decision: 14th August, 2013
        KAHAN UDYOG
                                                             ..... Appellant
                              Through Mr. Prakash Kumar, Advocate.

                              versus

        COMMISSIONER OF INCOME TAX
                                                           ..... Respondent
                              Through Mr. Sanjeev Rajpal, Sr. Standing
                              Counsel.

        CORAM:
        HON'BLE MR. JUSTICE SANJIV KHANNA
        HON'BLE MR. JUSTICE SANJEEV SACHDEVA

SANJIV KHANNA, J. (ORAL):

        This appeal by the assessee-M/s Kahan Udyog relates to block

period 1st April, 1985 to 16th November, 1995 and arises out of the

order of the Income Tax Appellate Tribunal dated 31st December, 1999

in IT(SS) A. No. 32/Del/96. The appeal was admitted vide order dated

9th May, 2001 and the following substantial question of law was

framed:-

                  "Whether the Tribunal's conclusions as regards
                  the additions under Section 69C of the Income-
                  Tax Act, 1961 are sustainable?"



ITA No. 56/2000                                                    Page 1 of 4
 2.       On 16th November, 1995 search operations under Section 132 of

the Income Tax Act, 1961 (Act, for short) were conducted at business

premises of Mahavir Woolen Mills, including the present appellant.

Incriminating documents were found and seized. Relying upon the

incriminating documents, addition of Rs.7,63,055/- was made in the

block assessment order for unrecorded/unaccounted transactions under

Section 69C. The said addition was reduced to Rs.6,13,000/- by the

tribunal. The appellant claims that no addition is justified and same is

contrary to facts and law.

3.       In the block assessment order dated 29th November, 1996, the

Assessing Officer has referred to various seized papers in respect of

unaccounted sales and unaccounted expenditure.            These were

inventorised. It was found that these transactions were not reflected in

the regular books of accounts.      Before the Assessing Officer, the

appellant had submitted that the difference between the excess of

expenditure over receipts, should be brought to tax and treated as

undisclosed income and the two amounts should not be separately

taxed.      Assessing Officer in the present case did not tax the

unaccounted       sales      and   has   only    taxed     unaccounted

expenses/expenditure/withdrawals. Before the tribunal, similar plea

was raised, but was rejected after making reference to the order of the

tribunal in the case of Siddhartha Woolen Mills. We have dismissed

ITA No. 56/2000                                                Page 2 of 4
 the appeal of the assessee in the case of Siddhartha Woolen Mills in

ITA No. 59/2000. In the present case, we notice that the tribunal has

given relief to the extent of Rs.1,50,000/- and the Assessing Officer

has not made any separate addition on account of          profits from

unaccounted sales. It is recorded in our order dated 25th July, 2013 in

the case of Siddhartha Woolen Mills that the expenditure incurred was

on account of electricity, petrol, tea pool, etc. and the names of the

persons and details why the expenditure was incurred had not disclosed

and furnished. The appellant has not, in the present case, furnished

details or explained nature and purpose behind the "expenditure".

Some expenses have been incurred towards kabadi etc. Names of

persons do find mention but the nature of activities undertaken why

and for what purpose the payment was made, are not known. It was

for the appellant assessee to produce relevant material or produce the

said person to justify the payment and show and establish that the

expense was not personal in nature but related to or was pertaining to

unaccounted business. No one mentioned in the list had appeared

before the Assessing Officer to testify and explain the nature and

character of the said payments. The appellant has accepted that these

transactions      were    not      recorded      in     the     books.

The appellant ran and took the risk when he entered into these

transactions and, therefore, should face the consequences prescribed

ITA No. 56/2000                                               Page 3 of 4
 and mandated under Section 69C of the Act.

4.      In view of the aforesaid factual position, we do not think the

findings of fact recorded by the tribunal can be categorised as perverse

and justify inference or reversal in this appeal under Section 260A of

the Act. The question of law is accordingly answered against the

appellant assessee and in favour of the Revenue.         The appeal is

dismissed. No order as to costs.


                                      SANJIV KHANNA, J.

SANJEEV SACHDEVA, J. AUGUST 14, 2013 VKR