VIJAY KUMAR SARAF VS INCOME-TAX APPELLATE TRIBUNAL
1999 P T D 2131
[226 I T R 860]
[Madhya Pradesh High Court (India)]
Before D.M. Dharmadhikari and Fakhruddin, JJ
VIJAY KUMAR SARAF
Versus
INCOME-TAX APPELLATE TRIBUNAL
Miscellaneous Civil Case No.81 of 1990, decided on 19/10/1995.
Income-tax---
----Reference---Question of law---Search of business premises of assessee and jewellery and ornaments seized ---Assessee claiming that jewellery and ornaments seized belonged to ancestral business of assessee's father and investment for purchase of scooter already assessed in earlier assessment year---Tribunal finding that plea of assessee not substantiated by evidence-- No question of law arose for reference---Indian Income Tax Act, 1961, S.256(2).
The business premises of the assessee were raided and searched by the Department and jewellery and ornaments were seized and an order under section 132(5) of the Income Tax Act, 1961, was passed by the Inspecting Assistant Commissioner. The assessee was then served with an assessment order for the assessment year 1986-87. The assessee filed a written reply before the Income-tax Officer and contended that the jewellery and ornaments seized were the assets of the ancestral business of the assessee's father. So far as the investment for purchase of one scooter in the assessment year in question was concerned, the assessee claimed that he had already been assessed for the same in the assessment year 1985-86. The Commissioner of Income-tax rejected the plea of the assessee and by applying the provisions of section 69 of the Act, passed an order under section 132(12) of the Act by treating the value of the jewellery, ornaments and money invested for the scooter: as the income of the assessee for the said financial year. The appeal preferred by the assessee to the Tribunal was dismissed by the Tribunal. The Tribunal also rejected the application filed by the assessee under section 256(1) for referring a question of law. On an application filed under section 256(2) the assessee contended that in order to attract section 69 of the Act, the Assessing Officer had first to record a finding that the investments were made in the financial year relevant to the assessment year and that those were not recorded in the books of account of the assessee:
Held, (i) that the plea of the assessee that the jewellery and ornaments seized were assets belonging to the ancestral business of the family of the assessee was never pressed before the income-tax authorities and the plea was also not substantiated by any evidence.
(ii) That regarding the legal contention advanced that there should be a finding that the investments had been made in the previous year and not recorded in the books as required by section 69 of the Act, the orders passed by the income-tax authorities showed that such a finding was contained in the orders passed by them.
(iii) That the assessing authority had disbelieved the plea of the assessee of raising of loans from two persons for the sarafi business.
(iv) That the assessee had failed to give any explanation about the investment made by him in several years for the booking of scooters.
(v) That, therefore, no question of law arose from the order of the Tribunal
J.P. Gupta, Senior Advocate for Applicant
R.D. Jain for Respondent
JUDGMENT
D.M. DHARMADHIKARI, J.---This is an application under section 256(2) of the Income Tax Act, 1961 (for short "the Act"), at the instance of the assessee/applicant with a prayer for a direction to the Income -tax Appellate Tribunal, New Delhi (for short "the ITAT"), to state the questions of law proposed for decision of this Court.
The business premises of the applicant, named, Vijay Abhushan Bhandar, were raided and searched by the Income-tax Department and jewellery and ornaments worth Rs.1,00,600 were seized. An order under section 132(5) of the Act was passed by the Inspecting Assistant Commissioner, Gwalior. The applicant was then served with an assessment order for the year 1986-87. The applicant filed a written reply before the Assessing Officer taking a plea that the jewellery and ornaments seized were the assets of the ancestral business of the applicant's father. So far as. the investment for purchase of one scooter in the assessment year in question was concerned, the stand taken was that he was assessed for the same in the previous year 1985-86.
The Commissioner of Income-tax rejected the plea taken by the assessee and by applying the provisions of section 69 of the Act, passed an order under section 132(12) of the Act by treating the value of jewellery, ornaments and money invested for scooter as income of the assessee for the said financial year. An appeal preferred to the Income-tax Appellate Tribunal by the assessee did not succeed. The applicant thereafter, sought a reference of certain questions under section 256(1) of the Act. The same was also rejected by the Income-tax Appellate Tribunal. Thereafter, this application for seeking reference of certain questions has now been filed in this Court,
Learned counsel, senior advocate, Shri J.P. Gupta, appearing for the applicant, at the time of hearing, only pressed two questions being worthy of reference to this Court. They are questions Nos.(i) and (iii) proposed in the Application under section 256, made to this Court, which read as under:
"(i) In the facts and circumstances of this case when the applicant and his ancestors have been dealing in gold and silver articles and the authorities have found that they were engaging in the aforesaid business, could the authorities act under section 69 of the Income -tax Act?
(iii) In the facts and circumstances of the case, the authorities have erred in holding that the investment in booking a scooter could be assessed in the year 1986-87 when it has been already assessed in 1985-86?"
Learned counsel appearing for the assessee argued that in order to attract section 69 of the Act, the Assessing Officer has first to record a finding that the alleged investments were made in the financial year preceding the assessment year and those were not recorded in the books of account of the assessee. It is argued that in the absence of the above finding, section 69 of the Act could not be resorted, to treat the investments as income of the assessee for the financial year in question. Therefore, the question of law does arise. With regard to the scooter investment, it was argued that the same having been already assessed in the year 1985-86, it could not have been reassessed for the financial year 1986-87.
Shri R.D. Jain, standing counsel appearing for the Income-tax Department, in reply, took us through the relevant portions of the orders passed by the tax authorities and pointed out that the plea that the ornaments and jewellery were received as assets of ancestral business, although mentioned in the written statement of the assessee, was never urged before the tax authorities. It is pointed out that the plea taken and sought to be proved was that for sarafi business, the assessee had raised loans from two persons, named, Ajay Kumar and Kaptan Singh. That plea was duly considered and gone into by the tax authorities to reject the same as unsubstantiated by any material or evidence on record. Our attention was specifically drawn to the contents of the order of assessment at page 2 and the conclusion reached in the last paragraph of the said order. The assessing authority found that Ajay Kumar from whom a loan of Rs.25,000 was said to have been raised was only a student and had no known source of income. So far as the loan taken from Kaptan Singh is concerned in the sum of Rs.70,000, the finding is that the person was an agriculturist and the loan was not given by cheque, but was said to have been given by withdrawing the money from the bank in cash. The assessing authority disbelieved the plea of raising of loans from the two above-named persons. With regard to investment for booking of scooters, the assessee failed to give any explanation about the investment made by him in several years for booking of scooters. No details regarding the name of the dalal, the alleged purchaser and date and consideration of purchases were furnished. The investment of one scooter was, therefore, taxed in the hands of the assessee in the relevant year. The above circumstances taken into account by the Assessing Officers have been duly considered by the Income-tax Appellate Tribunal in its appellate order passed in the case. The plea now sought to be urged in support of this application for reference that the jewellery and ornaments seized were assets belonging to the ancestral business of the family was never pressed before the tax authorities and the plea was also not substantiated by any evidence.
So far as the legal contention advanced that there should be a finding that the investments had been made in the previous financial year and not recorded in the books of account as required by section 69 of the Act is concerned, the orders of the tax authorities read as a whole and as discussed above, go to show that such a finding is contained in the orders.
We find no merit in this application as no question or questions of law arise from the order of the Income-tax Appellate Tribunal. The application is, therefore, rejected, but without any order as to costs.
M.B.A./1667/FCApplication dismissed.