The Commissioner of Income-tax, Kota v. Jai Bharat Fruit Co
[Citation -2017-LL-0705-18]

Citation 2017-LL-0705-18
Appellant Name The Commissioner of Income-tax, Kota
Respondent Name Jai Bharat Fruit Co.
Court HIGH COURT OF RAJASTHAN
Relevant Act Income-tax
Date of Order 05/07/2017
Judgment View Judgment
Keyword Tags regular books of account • confessional statement • unexplained cash • cogent evidence • interest income • seized material
Bot Summary: 142(2A) of the Income Tax Act which were deleted by the Tribunal on the basis of the recasted books of acounts of the assessee submitted after the date of search Whether under the facts and circumstances of the case and in law, the order of Tribunal is perverse in deleting the addition of Rs. 21,41,843/- made by the Assessing Officer in respect of undisclosed interest income earned on lottery scheme Whether under the facts and circumstances of the case and in law the order of the Tribunal is perverse in deleting the addition of Rs.44,09,005/- made by the Assessing Officer on the report of Special Auditor appointed u/s. 142(2A) of the Income Tax Act Whether under the facts and circumstances of the case and in law, the order of Tribunal is perverse in deleting the additions of Rs.2,07,04,897/- made on account of suppressed commission and mandi tax by the Assessing Officer ITA NO. 653/2008 Whether under the facts and circumstances of the case and in law, the Tribunal was justified in allowing relief in respect of additions which were based on incriminating evidences seized and not recorded in the regular books of accounts Whether under the facts and circumstances of the case and in law, the Tribunal was justified in admitting retraction of the assessee from the confessional statement given u/s. 142(2A) of the Income Tax Act which were deleted by the Tribunal on the basis of the recasted books of acounts of the assessee submitted after the date of search Whether under the facts and circumstances of the case and in law, the order of Tribunal is perverse in deleting the mandatory interest which ITA-724/2008 is required to be charged u/s. 158BFA(1) for late filing of the returns ITA No. 818/2008 Whether under the facts and circumstances of the case and in law, the Tribunal was justified in allowing relief in respect of additions which were based on incriminating evidences seized and not recorded in the regular books of accounts Whether under the facts and circumstances of the case and in law, the Tribunal was justified in admitting retraction of the assessee from the confessional statement given u/s. 142(2A) of the Income Tax Act which were deleted by the Tribunal on the basis of the recasted books of acounts of the assessee submitted after the date of search Whether under the facts and circumstances of the case and in law, the order of Tribunal is perverse in deleting the mandatory interest which is required to be charged u/s. 158BFA(1) for late filing of the returns ITA NO.822/2008 Whether under the facts and circumstances of the case and in law, the Tribunal was justified in allowing relief in respect of additions which were based on incriminating evidences seized and not recorded in the regular books of accounts Whether under the facts and circumstances of the case and in law, the Tribunal was justified in admitting retraction of the assessee from the confessional statement given u/s. The CIT(A) while considering the case has discussed in detail each of the grounds which has been discussed by the tribunal and the tribunal has held in favour of the assessee.


HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 724/2008 Commissioner of Income Tax, Kota. Appellant Versus M/s Jai Bharat Fruit Co., New Subjimandi, Kota. Respondent Connected With D.B. Income Tax Appeal No. 653/2008 Commissioner of Income Tax, Kota. Appellant Versus Sh. Prakash Kumar Batwani, P/o M/s. Jai Bharat Fruit Co., New Subjimandi, Kota. Respondent D.B. Income Tax Appeal No. 818/2008 Commissioner of Income Tax, Kota Appellant Versus Sh. Prakash Kumar Batwani, P/o M/s. Jai Bharat Fruit Co., New Subjimandi, Kota. Respondent D.B. Income Tax Appeal No. 821/2008 Commissioner of Income Tax Kota. Appellant Versus Sh. Prakash Kumar Batwani, P/o M/s. Jai Bharat Fruit Co., New Subjimandi, Kota. Respondent D.B. Income Tax Appeal No. 822/2008 Commissioner of Income Tax Kota. Appellant (2 of 8) [ ITA-724/2008] Versus Sh. Prakash Kumar Batwani, P/o M/s. Jai Bharat Fruit Co., New Subjimandi, Kota. Respondent For Appellant(s) : Ms. Parinitoo Jain. For Respondent(s) : Mr. Gunjan Pathak with Ms. Ishita Rawat. HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Order 05/07/2017 1. In all these appeals common question of law and fact are involved, they are decided by common judgment. 2. By way of these appeals, appellant has challenged judgment and order of Tribunal whereby tribunal has partly allowed appeals preferred by assessee. 3. While admitting appeals, this court framed following substantial question of law:- (1) ITA NO. 724/2008 (1) Whether under facts and circumstances of case and in law, Tribunal was justified in allowing relief in respect of additions which were based on incriminating evidences seized and not recorded in regular books of accounts? (2) Whether under facts and circumstances of case and in law, Tribunal was justified in admitting retraction of assessee from confessional statement given u/s. 132(4) without any cogent evidence and in disregard to dictum of Hon'ble Apex Court in case of Surjeet Singh Chhabra reported in AIR 1997 SC 2560? (3 of 8) [ ITA-724/2008] (3) Whether under facts and circumstances of case and in law, Assessing officer was justified in making additions on basis of report of special auditor obtained u/s. 142(2A) of Income Tax Act which were deleted by Tribunal on basis of recasted books of acounts of assessee submitted after date of search? (4) Whether under facts and circumstances of case and in law, order of Tribunal is perverse in deleting addition of Rs. 21,41,843/- made by Assessing Officer in respect of undisclosed interest income earned on lottery scheme? (5) Whether under facts and circumstances of case and in law order of Tribunal is perverse in deleting addition of Rs.44,09,005/- made by Assessing Officer on report of Special Auditor appointed u/s. 142(2A) of Income Tax Act? (6) Whether under facts and circumstances of case and in law, order of Tribunal is perverse in deleting additions of Rs.2,07,04,897/- made on account of suppressed commission and mandi tax by Assessing Officer? (2) ITA NO. 653/2008 (1) Whether under facts and circumstances of case and in law, Tribunal was justified in allowing relief in respect of additions which were based on incriminating evidences seized and not recorded in regular books of accounts? (2) Whether under facts and circumstances of case and in law, Tribunal was justified in admitting retraction of assessee from confessional statement given u/s. 132(4) without any cogent evidence and in disregard to dictum of Hon'ble Apex Court in case of Surjeet Singh Chhabra reported in AIR 1997 SC 2560? (3) Whether under facts and circumstances of case and in law, Assessing officer was justified in making additions on basis of report of special auditor obtained u/s. 142(2A) of Income Tax Act which were deleted by Tribunal on basis of recasted books of acounts of assessee submitted after date of search? (4) Whether under facts and circumstances of case and in law, order of Tribunal is perverse in deleting mandatory interest which (4 of 8) [ ITA-724/2008] is required to be charged u/s. 158BFA(1) for late filing of returns? (3) ITA No. 818/2008 (1) Whether under facts and circumstances of case and in law, Tribunal was justified in allowing relief in respect of additions which were based on incriminating evidences seized and not recorded in regular books of accounts? (2) Whether under facts and circumstances of case and in law, Tribunal was justified in admitting retraction of assessee from confessional statement given u/s. 132(4) without any cogent evidence and in disregard to dictum of Hon'ble Apex Court in case of Surjeet Singh Chhabra reported in AIR 1997 SC 2560? (3) Whether under facts and circumstances of case and in law, Assessing officer was justified in making additions on basis of report of special auditor obtained u/s. 142(2A) of Income Tax Act which were deleted by Tribunal on basis of recasted books of acounts of assessee submitted after date of search? (4) Whether under facts and circumstances of case and in law, order of Tribunal is perverse in deleting addition of Rs.2,94,151/- made on account of undisclosed cash found at business premises and same ws surrendered for taxation u/s.132(4) of Income Tax Act? (5) Whether under facts and circumstances of case and in law, order of Tribunal is perverse in deleting additions of Rs.74,274/- made on account of unexplained cash payments which were not found in regular books of accounts? (6) Whether under facts and circumstances of case and in law, order of Tribunal is perverse whereby interest charged u/s.158BFA(1) was deleted on surmises and conjectures and also not deciding independently on merits? (4) ITA NO. 821/2008 (1) Whether under facts and circumstances of case and in law, Tribunal was justified in allowing relief in respect of additions which were based on incriminating evidences seized and not recorded in regular books of accounts? (5 of 8) [ ITA-724/2008] (2) Whether under facts and circumstances of case and in law, Tribunal was justified in admitting retraction of assessee from confessional statement given u/s. 132(4) without any cogent evidence and in disregard to dictum of Hon'ble Apex Court in case of Surjeet Singh Chhabra reported in AIR 1997 SC 2560? (3) Whether under facts and circumstances of case and in law, Assessing officer was justified in making additions on basis of report of special auditor obtained u/s. 142(2A) of Income Tax Act which were deleted by Tribunal on basis of recasted books of acounts of assessee submitted after date of search? (4) Whether under facts and circumstances of case and in law, order of Tribunal is perverse in deleting mandatory interest which is required to be charged u/s. 158BFA(1) for late filing of returns? (5) ITA NO.822/2008 (1) Whether under facts and circumstances of case and in law, Tribunal was justified in allowing relief in respect of additions which were based on incriminating evidences seized and not recorded in regular books of accounts? (2) Whether under facts and circumstances of case and in law, Tribunal was justified in admitting retraction of assessee from confessional statement given u/s. 132(4) without any cogent evidence and in disregard to dictum of Hon'ble Apex Court in case of Surjeet Singh Chhabra reported in AIR 1997 SC 2560? (3) Whether under facts and circumstances of case and in law, Assessing officer was justified in making additions on basis of report of special auditor obtained u/s. 142(2A) of Income Tax Act which were deleted by Tribunal on basis of recasted books of acounts of assessee submitted after date of search? (4) Whether under facts and circumstances of case and in law, order of Tribunal is perverse in deleting mandatory interest which is required to be charged u/s. 158BFA(1) for late filing of returns? 4. We have heard counsel for parties. (6 of 8) [ ITA-724/2008] 5. Counsel for appellants has taken us to order of A.O. in appeal no.724/2008 and contended that A.O. while considering matter has discussed evidence which was seized during search on 24.02.1999 and 07.04.1999 and after taking into consideration he has clarified headwise as under:- A. Interest Income earned on funds received by assessee as result of organizing lottery scheme. B.Interest Income on loans other than lottery loans as were doubt by nominated auditor and forming part of audit report under section 142(2A). C. Income form Beecee. D. Cash deficit occurred out of cash flow statement forming part of audit report u/s 142(2A). E.Suppressed Commission and Mandi tax. F. Concealed commission and Mandi tax in addition to undisclosed commission/Mandi tax referred to in para E above. G. Deposits/Loans in cash in contravention of section 269SS and 269T of I.T. Act. 6. Taking into consideration above, counsel for appellant contended that though authorities CIT(A) and tribunal while taking into consideration recast books of account and has reversed finding of A.O. on basis of seized material. 7. Counsel for respondent contended that books of account were never rejected and seized material which has been sought to be relied on either it was relied on or explained in books of account. CIT(A) while considering case has discussed in detail each of grounds which has been discussed by tribunal and tribunal has held in favour of assessee. (7 of 8) [ ITA-724/2008] He contended that this will amount to appreciation of fact and no substantial question arises in these appeals. 7. We have heard counsel for parties. 8. On first issue whether tribunal was justified in allowing relief in respect of additions which was based on incriminating evidence seized and not recorded in regular books of account in view of fact that books of account which was accepted and not rejected by A.O. it will not be relied upon. In that view of matter, on first issue, in our considered opinion, tribunal has not committed any error in relying upon books of account unless same is rejected by A.O. In our considered opinion it will not be appropriate for tribunal to base its decision on seized material other than books of account maintained by assessee. 9. On issue no.2, tribunal has relied on judgment of Supreme Court which will not apply in present case. 10. Taking into consideration, second issue is required to be decided in favour of assessee and against department. 11. On issue of 142(2A), issue no.3 & 5 are taken together and taking into consideration provisions of Section 142(2A), we are of considered opinion that tribunal has not committed any error in relying upon books of accounts which were never rejected by AO. 12. On issue no.4 regarding lottery income, lottery was shown on books of accounts and amount which has been (8 of 8) [ ITA-724/2008] shown by way of interest income earned on lottery was rightly not held to be not received by assessee. 12.1 Taking into consideration interest amount taken from persons to whom loan was given, same was explained by tribunal in detail. In that view of matter, issue no.4 is required to be answered in favour of assessee and on last issue tribunal was not perverse in deleting additions on Mandi tax as books of accounts were never rejected by assessing officer. In that view of matter, this issue is also decided in favour of assessee. appeals stand dismissed. copy of this judgment be placed in each file. (INDERJEET SINGH),J. (K.S. JHAVERI),J. Bm gandhi/80-84. Commissioner of Income-tax, Kota v. Jai Bharat Fruit Co
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