The High Court allowed the appeal in part and remanded the matter to the ITAT for reconsideration regarding Assessment Year 2005-06. The court held Questions 7 and 8 in favor of the assessee.
Appeal allowed in part; matter remitted to ITAT for re-consideration; Questions 7 and 8 held in favor of assessee.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 1ST DAY OF AUGUST, 2022
PRESENT
THE HON’BLE MR. JUSTICE P.S. DINESH KUMAR
AND
THE HON’BLE MRS. JUSTICE M.G. UMA
I.T.A NO.433/2016
BETWEEN:
DAUGHTER OF LATE SRI. M.L. KRUPAL
BOTH ARE RESIDING AT I.B.ROAD, NEAR ANJANEYA TEMPLE, SOMWARPET, KODAGU DISTRICT - 571 236
…APPELLANTS
(BY SHRI. V. CHANDRASHEKAR, ADVOCATE FOR SHRI. M. LAVA, ADVOCATE)
AND:
THE INCOME - TAX OFFICER, WARD-1. SRIVALLI BUILDING, CHIKPET, MADIKERI - 571 201.
…RESPONDENT
(BY SHRI. K.V. ARAVIND, ADVOCATE)
THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 06/05/2016 PASSED IN ITA NO.380/BANG/2012 AND ITA NO.382/BANG/2012, FOR THE ASSESSMENT YEAR 2005-2006. PRAYING TO FORMULATE THE SUBSTANTIAL QUESTION OF LAW AS STATED ABOVE AND ANSWER THE SAME IN FAVOUR OF THE APPELLANT AND ETC.,
THIS ITA COMING ON FOR FINAL HEARING , THIS DAY, P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING:
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JUDGMENT
This appeal by the assessee, has been admitted to consider following questions of law:
1. Whether the Tribunal was justified in law in upholding the order of the learned Commissioner of Income-tax (Appeals) by giving a perverse finding that difference between the sales tax annual return and the monthly return of Rs 6,34,501/- will become income and represent unaccounted sales on the facts and circumstances of the case?
2. Whether the Tribunal was justified in law in adding a sum of Rs 15,95,090/- either as Gross profit addition or being difference in closing stock as per books and as given to bank on the facts and circumstance of the case.
3. Without prejudice, whether the Tribunal was justified in law in confirming the addition of Rs. 15,95,090/- as gross profit addition on account of excess stock given in Bank statements and consequently passed a perverse order on the facts and circumstances of the case?
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4. Whether in law the Tribunal can change the foundation of addition from 69C of the Act as held by the learned Commissioner of Income-tax (Appeals) to 69 A of the Act and further whether the provisions of Section 69A of the Act are applicable on the facts and circumstances of the case?
5. Whether the Tribunal was justified in confirming an amount of Rs 7,24,000/- from three creditors on unsustainable grounds and consequently passed a perverse finding on the facts and circumstance of the case.
6. Whether the Tribunal was justified in confirming an amount of Rs 11,88,000/- on the ground that no further details have been filed which is contrary to record and thus passed a perverse order on the facts and circumstance of the case.
7. Whether the Tribunal was justified in law in holding that CIT(A) has set aside the assessment to the file of the assessing officer in relation to an addition of Rs 3,50,06,130/as unexplained credit when the commissioner has only directed the assessing officer to work out the amount involved after giving clear
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directions in such regard on the facts of the case.
8. Whether the Tribunal ought to have dismissed the ground of the revenue as the assessing officer has examined the entire matter and has granted deduction to an extent of Rs 3,12,86,069/- and thus remanding the file of the CIT(A) is perverse in law on the facts and circumstance of the case.
9. Whether the Tribunal was justified in law to have remanded the matter of unexplained credit of Rs 37,20,061/- to the file of CIT(A) on the facts of the case."
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assessee preferred an appeal before the Commissioner of Income Tax (Appeals)1 , who by his order dated 29.11.2011, has directed so far as A.Y.2005-06 is concerned, as follows:
"It would be more appropriate to work out the peak of the credits to arrive at the unaccounted money deposited for the purpose of these transactions. Further, the AO is directed to work out the result of these purchases and sales and make appropriate addition on this count also. For the A.Y.2004-05 in the appeal order cited supra, it is observed that the opening stock as on 31.3.2003 is available for sale for depositing into OD account. The AO is directed to keep this aspect also and work out the peak credit while giving due credit for the closing stock of earlier year which would naturally be available for deposit. Accordingly, the appeal on this ground is partly allowed."
that the order passed by CIT(A) is unambiguous.
1 CIT(A)
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While partly allowing the appeal, the CIT(A) has given specific directions to the Assessing Officer. The only act that the Assessing Officer was required to do was to give effect to the order passed by the CIT(A), which the Assessing Officer has done by passing order dated 27.01.20122 .
2 Annexure-K
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passed order as per Annexure-K to give effect to the order passed by the CIT(A).
ORDER
ii. The matter is remitted to the ITAT for re-consideration so far as A.Y.2005-06 is concerned, in both appeals ITA.No.380/Bang/2012 and ITA.No.382/Bang/2012 and in Revenue's appeal with regard to grounds No.1 and 2 at Page No.96 of memorandum of appeal filed by the Revenue before the ITAT; and
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against the Revenue. After remand, ITAT shall consider remaining questions Nos.1, 2, 3, 4, 5, 6 and 9.
No costs.
Sd/JUDGE
Sd/JUDGE
SMJ
3 issues framed by the court
Whether the Assessing Officer re-assessed the matter beyond the parameters set by the CIT(A)?
Whether the ITAT ought to re-examine the matter again remanded to the ITAT for reconsideration?
Whether Questions No.7 and 8 in the appeal are held in favour of the assessee?
2 provisions across 1 enactments
Late Sri. M.L. Krupal Rep. by his L/R's
Income - Tax Officer, Ward-1
P.S. DINESH KUMAR
M.G. UMA
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
