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2013 DIGILAW 987 (RAJ)

Commissioner of Income v. Ram Gopal Manda

2013-05-13

ARUN BHANSALI, NARENDRA KUMAR JAIN

body2013
JUDGMENT 1. Heard learned counsel for the parties. 2. This court, while admitting the appeal, framed the following substantial questions of law on February 15, 2011 : "(i) Whether the Tribunal was justified in directing set off of Rs. 54,10,054 as against the surrendered income of the assessee amounting to Rs. 1,29,07,00 by upholding the finding of the Com missioner of Income-tax (Appeals) on this issue ? (ii) Whether the finding recorded by the Tribunal in paragraph 7 is factually sustainable in the absence of any discussion much less cogent discussion, more so when the assessee was not represented ?" 3. The relevant facts, for disposal of this appeal, are that during the course of survey under section 133A conducted on January 28, 2003, certain incriminating documents/loose papers/note-books, etc., were found at the business premises of the assessee and on the basis of the said material, the assessee had surrendered a sum of Rs. 1,75,00,000, vide his letter dated January 31, 2003, before the Department. 4. During the assessment proceedings, the assessee claimed set off against this surrendered amount claiming that the said income was from business. The Assessing Officer did not agree with the submission of the assessee and came to a conclusion that the surrendered amount of Rs. 1,75,00,000 is an income from other sources, vide assessment order dated March 28, 2006, in respect of the financial year 2002-03, i.e., the assessment year 2003-04. 5. Being aggrieved with the assessment order passed by the Assessing Officer, whereby set off was not allowed, the assessee preferred an appeal before the appellate authority. The Commissioner of Income-tax (Appeals)-II, Bikaner, vide his order dated December 18, 2006 (annexure 2) partly allowed the appeal filed by the assessee. The Commissioner of Income-tax (Appeals) discussed the matter in detail and came to a conclusion that the assessee is entitled to get set off of Rs. 54,10,054 and directed the Assessing Officer to give set off of the said amount against the total surrendered income. The Revenue preferred an appeal before the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal, vide its order dated June 27, 2008 (annexure 1) dismissed the appeal of the Revenue and affirmed the finding of the appellate authority. Hence, the Revenue has preferred this appeal before this court. 6. The submission of Mr. The Revenue preferred an appeal before the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal, vide its order dated June 27, 2008 (annexure 1) dismissed the appeal of the Revenue and affirmed the finding of the appellate authority. Hence, the Revenue has preferred this appeal before this court. 6. The submission of Mr. K.K. Bissa, learned counsel appearing on behalf of the Revenue, is that the learned appellate authority as well as the Appellate Tribunal, both committed an illegality in treating the surrendered amount of Rs. 1,75,00,000 as income of the assessee from business, whereas the learned Assessing Officer was absolutely right in not allowing the set off by recording a finding that the said surrendered income was income of the assessee from other sources. He, therefore, submitted that the orders passed by the appellate authority as well as the Income-tax Appellate Tribunal, both be set aside and the order of the Assessing Officer be restored. 7. Mr. Dinesh Mehta, learned counsel appearing on behalf of the assessee, supported the impugned orders passed by the Income-tax Appellate Tribunal as well as the appellate authority and submitted that the amount of Rs. 1,75,00,000 was surrendered with specific conditions, which were considered and dealt with by the appellate authority. He submitted that the Assessing Officer did not consider all the facts including the conditions mentioned by the assessee, while surrendering the amount. He further submitted that the appellate authority quoted all the conditions, which were mentioned in the letter, while surrendering the amount of Rs. 1,75,00,000. He referred the finding of the appellate authority and submitted that the Revenue is unable to point out any perversity in the finding recorded by the appellate authority as well as the Appellate Tribunal. He, therefore, submitted that there is no force in the submission of the learned counsel for the Revenue. He also submitted that the questions framed in the present case are not the questions of law, therefore, this appeal is liable to be dismissed. 8. We have considered the submissions of the learned counsel for the parties and examined the impugned orders passed by the appellate authority as well as the Income-tax Appellate Tribunal and also the assessment order and other documents available on record. 9. 8. We have considered the submissions of the learned counsel for the parties and examined the impugned orders passed by the appellate authority as well as the Income-tax Appellate Tribunal and also the assessment order and other documents available on record. 9. From the various orders as well as the submissions of the learned counsel for the parties, it appears that the question involved in the present case is as to whether the surrendered amount of Rs. 1,75,00,000 should be treated as income of the assessee from business or from other sources. The appellate authority as well as the Income-tax Appellate Tribunal, both have recorded a finding that the said surrendered amount was an income of the assessee from business and not from other sources as pointed out by the Assessing Officer. The conditions mentioned in the letter of surrender by the assessee are reproduced, as under : "(a) The note books and loose papers contain entries pertaining to my business. (b) I have examined the entries and after discussion about such entries with the worthy Commissioner of Income-tax, Bikaner, I offer income of Rs. 1.75 crores to tax for the current year 2002-03. (c) The surrendered income covers all the entries appearing in such note books and loose papers. (d) I am surrendering this income to purchase peace and in full and final settlement of my case. It is requested that no action to levy of penalty and prosecution, etc., will be taken against me. (e) It is to co-operate with the Department that I have surrendered the above income over all above the regular income to be declared for the financial year 2002-03 which shall not be less than the income disclosed for the assessment year 2002-03. (f) The tax on the above income surrendered will be paid as agreed by the worthy Commissioner of Income-tax, Bikaner. (g) I request that my above submission may be accepted so that no dispute at all in my case once for all which I have surrendered the above income of Rs. 1.75 crores for the assessment year 2002-03." 10. From the conditions quoted above, it is clear from condition Nos. (a), (b) and (c) that the assessee had claimed that the surrendered amount was income from the business. 1.75 crores for the assessment year 2002-03." 10. From the conditions quoted above, it is clear from condition Nos. (a), (b) and (c) that the assessee had claimed that the surrendered amount was income from the business. From the order of the Assessing Officer, it appears that the Assessing Officer considered only condition No. (e) and (f) and not condition Nos. (a), (b) and (c) at all. The Commissioner of Income-tax (Appeals) considered all the conditions mentioned in the letter of surrender and other facts and circumstances of the case and thereafter recorded a finding that the surrendered amount was an income of the assessee from business and not from other sources as held by the Assessing Officer and, consequently, it was held that assessee is entitled to get set off of Rs. 54,10,054. 11. Whether the surrendered amount is an income from business or from other sources is essentially a question of fact. In the present case, the Commissioner of Income-tax (Appeals) as well as the Income-tax Appellate Tribunal both have recorded a concurrent finding of fact based on cogent material available before them, that the surrendered amount was an income of the assessee from business and not from other sources. Learned counsel for the Revenue is unable to point out any perversity in the said finding recorded by the appellate authority as well as the Appellate Tribunal. There is no dispute between the parties on the issue that in case the surrendered amount is treated as an income from business, then the assessee is entitled to get set off of the amount of Rs. 54,10,054. 12. In view of the above, the questions of law framed in the present case, particularly when no perversity has been pointed out in the finding of Commissioner of Income-tax as well as Income-tax Appellate Tribunal to the extent that the surrendered amount was an income of the assessee from business and not from other sources as held by the Assessing Officer, cannot be said to be the questions of law. Therefore, both the questions are liable to be answered in favour of the assessee. 13. In view of the above discussions, we do not find any merit in this appeal and the same is liable to be dismissed and is hereby dismissed with no order as to costs. *******