Madras High Court
Principal Commissioner Of Income ... vs B. Sumathi on 4 August, 2022
TCA.Nos.278, 254, 255 and 222 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 04.08.2022
CORAM
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
and
THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ
T.C.A.Nos. 222, 254, 255 & 278, of 2019
Principal Commissioner of Income Tax,
Central 2,
No.108, Mahatma Gandhi Road,
Chennai. .. Appellant in all appeals
Versus
B. Sumathi .. Respondent in TCA.No.222 of 2019
Shri.V.Dhivaharan .. Respondent in TCA.Nos.254, 255
and 278 of 2019
Prayer in TCA.Nos.222 and 278 of 2019: Tax Case Appeals filed under
Section 260 A of the Income Tax Act, 1961 against the order of the Income Tax
Appellate Tribunal Madras “D” Bench, dated 28.4.2017 passed in
ITA.Nos.38/Mds/2007 and 61/Mds/2002.
Prayer in TCA.Nos.254 and 255 of 2019: Tax Case Appeals filed under
Section 27A of the Wealth Tax Act, against the order of the Income Tax
Appellate Tribunal Madras “D” Bench, dated 28.4.2017 passed in
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TCA.Nos.278, 254, 255 and 222 of 2019
WTA.Nos.60 and 61/Mds/2005.
For Appellant in all appeals : Mr.S.Rajesh for
Mr.Karthik Ranganathan
Standing Counsel
For Respondents in all appeals: Mr. R. Janakiraman
COMMON JUDGMENT
(Judgment of the Court was delivered by R. MAHADEVAN, J.)
These Tax Case Appeals have been filed by the appellant / revenue,
questioning the correctness of the order dated 28.4.2017 passed by the Income
Tax Appellate Tribunal Madras “D” Bench, in respective ITA.No.38/ Mds/
2007, ITA.No.61/Mds/2002, WTA.Nos.60 and 61/Mds/2005 for the
respective assessment years 1987-88 to 1997-98, 1996-97, 1997-98, 1987-88
to 1997-98 on the following substantial questions of law;
TCA.No.222 of 2019:
' 1. Whether the Appellate Tribunal is correct in law in
deleting the additions made by the Assessing Officer for the
block period on the ground that no addition towards
undisclosed income can be made without seized
incriminating material to support such addition, when the
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TCA.Nos.278, 254, 255 and 222 of 2019
assessee never filed Return of Income?
2. Whether the Tribunal is correct in law deleting the
addition made towards unexplained investment in jewellery
of 4307 grams and diamonds of 48.61 carats, valued of
Rs.43,47,000/- found in the locker No.133 of City union
Bank, Mannargudi, while holding in the case of
Sri.V.Divakaran, wherein this amount was taxed on
substantive basis, that this amount is taxable in the case of
Smt. Sumathy only?
3. Whether the Tribunal is correct in law deleting the
addition made towards unexplained investment in jewellery
of 4307 grams and diamonds of 48.61 Carats, valued of
Rs.43,47,000/- found in the locker No.133 of City Union
Bank, Mannargudi both in the case of this assessee,
wherein the amount was taxed on protective basis and in
the case of Sri.V.Divakaran, in whose case the same amount
was taxed on substantive basis and thereby excluding the
unexplained investment from the taxation purview of
chapter XIV-B of the Income Tax Act, 1961?
4. Whether the Tribunal is correct in law in holding
that the addition is not sustainable in the case of
Smt.B.Sumathi on the ground that satisfaction cannot be
recorded by the assessing officer while initiating
proceedings u/s.158BD against the assessee as the
assessing officer himself is satisfied C.No.422/20/PCIT(C)-
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TCA.Nos.278, 254, 255 and 222 of 2019
2/2017-18 that the jewellery belongs to Shri.V.Dhivakaran,
whereas the Hon'ble ITAT, the last fact finding authority,
itself upheld in the order No.IT(SS)A No.61/Mds/2002, that
the jewellery belongs to Smt.B.Sumathi and is to be taxable
in the hands of Smt.B.Sumathi only and as such should have
upheld the addition made in the case of Smt.B.Sumathi?”
TCA.No.254 & 255 of 2019:
“Whether the Appellate Tribunal is correct in law in
setting aside wealth tax assessment and all the issues are
remitted back to the file of the Assessing Officer since the
Income Tax Returns are already setaside by the Tribunal in
assessee's own case?”
TCA.No.278 of 2019:
“1.Whether the Tribunal is correct in law giving relief of
accepting the submission that the jewellery found in the
residence of the assessee, to the extent of 1042 grams for
whose source no evidence was found, belongs to others and
on the presumption that the excess jewellery would have
received by the other and on the presumption that the excess
jewellery would have received by the others on the occasion
for marriage as stridharan?
2. Whether the order of the Tribunal wherein relief was
given to the extent of 1042 grams valuing Rs.4,57,021/-
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TCA.Nos.278, 254, 255 and 222 of 2019
without material evidence and only based on presumption,
is not preserve in law as well as on facts?
3. Whether the Tribunal is right in law in holding that
the jewellery of 4307 grams and diamonds of 48.61 Carats,
valuing totally to Rs.43,47,182/-, found in locker no.133 of
City Union Bank, Mannargudi is assessable only in the
hands of Smt.Sumathi, ignoring the facts that the
presumption provision of section of the Income Tax Act and
the financial ability of Smt.B.Sumathi?
4. Whether the Tribunal is right in law in holding that the
silver articles weighing 12247 grams valued at Rs.89,966
were received by the assessee's wife and mother at the time
of their marriage from their parents, without any supporting
evidence and only on presumption?
5. Whether the Tribunal is right in law in deleting the
addition of Rs.4 lakhs made on account of possession of the
white goods such as TV, Fridge, VCR and Maruti Car,
which were found in the possession at the time of search and
whose source could not be explained by the assessee with
documentary evidence?
6. Whether the Tribunal is right in law in deleting the
addition made of Rs.34,672/- towards unexplained cash by
ignoring the fact that as per the provision of Section, there
is a presumption that the cash belongs to the assessee and
the explanation, if any with respect to source of such cash
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has to be explained with evidence by the assessee?
7. Whether the Tribunal is right in law deleting the
addition of Rs.10 lakhs made in the hands of assessee on
purchase basis towards deposit made in the name of
Ms.Subashree Bhaskaran, which was made based on the
statement of deposit holder?
8. Whether the Tribunal is right in law in deleting the
addition of Rs.42,37,323/- made in the hands of the assessee
as undisclosed income, on protective basis, being on money
payment made by the assessee towards purchase of land by
the Company M/s.TCV Engineering Pvt. Ltd. in which the
assessee is a major share holder?
9. Whether the Tribunal is right in law in directing the
Department to treat certain credits as contract receipts, as
claimed by the assessee, and to apply the provision of
Sec.44AD of the Act, without verifying the genuineness at
the claim that the receipts claimed by the assessee are really
attributable to contract work?
10. Whether the Tribunal is right in law in deleting the
addition made towards undisclosed investment in land and
buildings amounting to 3.99 lakhs on the ground that no
material was found during the investment came to the
knowledge of the Revenue in proceedings initiated only in
consequence to search operation?
11. Whether the Tribunal is right in law in deleting
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TCA.Nos.278, 254, 255 and 222 of 2019
addition made towards unexplained cash credits of
Rs.40,000/- in the books of M/s. Sengamala Thayar
Educational Trust, on the ground that the same has to be
taxed u/s.68 in the hands of trust not in the hands of
assessee, by ignoring the fact that the relevant material was
found in the course search of the assessee and the
presumption u/s is upon the assessee and failure to explain
the same leads to taxation in his hands only?
12. Whether the Tribunal is right in law in deleting
addition made of Rs.1,50,000/- towards unexplained
expenditure, on the presumption that the assessee might
have invested these funds out of his contract income and
agriculture income, by ignoring the fact that there is
material evidence for incurring of such expenditure as
required u/s.158BB(1) and the legal presumption 132(4A) is
that the said expenditure was incurred by the and failure to
explain the same leads to taxability of the said expenditure
u/s.69C in the hands of assessee only?
13. Whether the Tribunal is right in law in deleting
addition made toward unexplained cash credit of
Rs.52,400/- in the books of M/s.Jai Hind Works, on the
ground that the same has to be taxed u/s.68 in the hands of
that concern only and not in the hands of assessee, by
ignoring the fact that the relevant material was found in the
course of search of the assessee and the presumption u/s is
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TCA.Nos.278, 254, 255 and 222 of 2019
upon the assessee and failure to explain the same leads to
taxation in the hands of assessee only?
14. Whether the Tribunal is right in law in deleting
addition made towards unexplained cash credits of
Rs.5,45,453/- towards credit founds in the seized material in
the conclusion that there is no basis for the assessing officer
to treat such credits belong to the assessee, by ignoring the
facts that the relevant material was found in the course
search of the assessee and the presumption u/s is upon the
assessee and failure to explain the same leads to taxation, in
the hands of assessee only?
15. Whether the Tribunal is right in law in deleting
addition made of Rs.2,46,036/- towards unexplained
expenditure incurred towards registration by ignoring the
fact that the legal presumption 132 (4A) is that the said
expenditure was incurred by the assessee and failure to
explain the same leads to taxability of the said expenditure
in the hands of assessee only.
16. Whether the Tribunal is right in law in deleting
addition of Rs.3,00,000/- made towards unexplained
investment in purchase of vehicle, by ignoring the fact that
the legal presumption is that the said investment in vehicle
was made by the assessee and failure to explain the same
with evidence leads to taxability of the said amount of
investment in the hands of assessee only?
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TCA.Nos.278, 254, 255 and 222 of 2019
17. Whether the Tribunal is right in law in deleting
addition of Rs.6,00,000/- made towards unexplained
investment in purchase of 2 lorries and consequential
attributable income thereon of Rs.3,39,439/- by ignoring the
fact that the legal presumption 132(4A) is that the said
investment in said lorries was made by the assessee and
failure to explain the same with evidence leads to taxability
of the said amount of investment in the hands of assessee
only?
18. Whether the Tribunal is right in law in deleting the
addition made towards failure of the assessee to prove the
source of capital introduced in the film of Rs.1,12,500/- on
the ground that there is material that the assessee
contributed to the capital of Film M/s.Jai Hind Works in the
name of the other partners, by ignoring the fact that the
addition was made based on the statement of assessee wife
Smt. Hemalatha?
19. Whether the Tribunal is right in law in deleting the
addition made towards commission from M/s.TCV
Engineering Pvt. Ltd. Income of Rs.10,00,000/- on the
ground that the same was not received by the assessee and
therefore, not taxable on the cash basis system of
accounting being followed by the assessee, by ignoring the
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TCA.Nos.278, 254, 255 and 222 of 2019
fact that the assessee had not maintained any books of
accounts to apply any particular system of accounting and
commission income is taxable during this block period on
accrue basis?
20. Whether the Tribunal is right in law deleting the
addition of 20 lakhs made by the assessing officer towards
inadequate withdrawals of household purpose on the
ground that no reliable material found during the course of
search operation by ignoring the statement of the assessee
on this aspect and his lavish lifestyle discovered as a result
of search?”
2. When the matters were taken up for consideration, the learned counsel
for the appellant / Revenue brought to the notice of this court the Circular
No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes,
wherein, it is stipulated that appeals shall not be filed/pursued by the
Department before the High Court in cases where the tax effect does not exceed
Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in
these appeals are less than the threshold limit.
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TCA.Nos.278, 254, 255 and 222 of 2019
3. In the light of the aforesaid submissions made by the learned counsel
for the appellant / Revenue, the present appeals, wherein, the tax effect is said
to be less than the monetary limit imposed, are dismissed as withdrawn,
keeping open the substantial questions of law for determination in appropriate
cases. No costs.
[R.M.D,J.] [M.S.Q., J.]
04.08.2022
msr
Index : Yes / No
To
1. Principal Commissioner of Income Tax,
Central 2,
No.108, Mahatma Gandhi Road,
Chennai.
2. The Income Tax Appellate Tribunal Madras “D” Bench,
Chennai.
3. The Deputy commissioner of Wealth Tax,
Central Circle II (4),
Chennai – 600 034.
4. The Assistant Commissioner of Income Tax,
Central Circle II (4),
Chennai – 600 034.
5. The Deputy Commissioner of Income Tax,
Central Circle II (4),
Chennai – 600 034.
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TCA.Nos.278, 254, 255 and 222 of 2019
R. MAHADEVAN, J.
and
MOHAMMED SHAFFIQ, J.
msr
T.C.A.Nos. 222, 254, 255 & 278 of 2019
04.08.2022
https://www.mhc.tn.gov.in/judis
