V M Dawra v. Commissioner of Income-tax, Jaipur / Dy. Commissioner of Income-tax Spl. Range-2, Jaipur
[Citation -2017-LL-0725-16]

Citation 2017-LL-0725-16
Appellant Name V M Dawra
Respondent Name Commissioner of Income-tax, Jaipur / Dy. Commissioner of Income-tax Spl. Range-2, Jaipur
Court HIGH COURT OF RAJASTHAN
Relevant Act Income-tax
Date of Order 25/07/2017
Judgment View Judgment
Keyword Tags transaction of investment • unaccounted investment • unexplained investment • undisclosed income • source of income • books of account • block assessment
Bot Summary: In the case of Mr. U.S. Baid, the appeal was preferred but the same covered by the Circular under Low Tax Effect. Mr. Sanjay Jhanwar counsel for the appellant has taken us to para 6 of the order of the Tribunal which shows the calculation of the each of the Director namely Mr. V.M. Dawra-Rs.11973000/-, in the case of the Mr. Vimal Choudhary-Rs.5899740/-, in the case of Mr. U.S. Baig-Rs.1750000/- and as stated hereinabove that there are different stands, therefore he contended that on the ground of parity if the department has accepted the case of Mr. Vimal Choudhary, then the case of Mr. V.M. Dawra also deserves to be allowed and parity may be maintained. The brief facts in the note are stated to have been supported by a number of annexures submitted with the said letter written regarding Dawra group cases and Terry Fab India Ltd. Duing the course of block assessment proceedings. In the case of V.M. Dawra, in view of the statement which was made, since the source of income is to be established by the department and they cannot merely rely on a letter written by the Chartered Accountant, in that view of the matter, the contention raised by counsel for Mr. V.M. Dawra is required to be accepted. ITA-57/2002 Even otherwise in the case of Mr. Vimal Choudhary, the matter was remanded back to the authority and the relief was granted which was not challenged by the department. On the basis of reasoning given by the tribunal, if in one case, the department has not challenged the order of the tribunal which was remitted back and relief granted in favour of the assessee. In view of the order passed in Appeal No.57/2002 in the case of V.M. Dawra, all other appeals stand disposed of.


HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 57 / 2002 V M Dawra, 342, Rajmal Ka Talab, Jaipur ----Appellant Versus 1. Commissioner Of Income Tax, NCRB Building Statue Circle, Jaipur. 2. Dy. Commissioner of Income Tax Spl. Range-2, Jaipur. ----Respondents Connected With D.B. Income Tax Appeal No. 35 / 2007 Terry Fab India Ltd, Village Chandwaji, Tehsil Amer, District Jaipur through its Director Shri Vishwa Mitra Dawra S/o Lt. Sh. Gokul Chand Dawra aged around 54 years r/o 342, Rajmal Ka Talab, Jaipur ----Appellant Versus Assistant Commissioner of Income Tax, Circle-7, Jaipur. ----Respondent D.B. Income Tax Appeal No. 304 / 2008 M/s Terry Finance Ltd. 2nd Floor, Khandaka Mansion, Panch Batti, M.I. Road, Jaipur through its Director Shri Vishwa Mitra Dawra s/o Lt. Sh. Gokul Chand Dawra aged around 54 years R/o 342, Rajmal Ka Talab, Jaipur ----Appellant Versus Income Tax Officer, Ward 6(2), Jaipur ----Respondent D.B. Income Tax Appeal No. 320 / 2008 Kanta Rani Dawra W/o Shri V.M. Dawra aged about 51 years, R/o 342, rajamal ka talab, Chandi Ki Taksal, Jaipur. ----Appellant Versus Income Tax Officer, ACIT Circle-5, Jaipur ----Respondent (2 of 8) [ ITA-57/2002] For Appellant(s) : Mr. Sanjay Jhanwar and Ms. Archana For Respondent(s) : Mr. R.B. Mathur Mr. K.D. Mathur and Mr. Prateek Kedawat HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Judgment 25/07/2017 1. Since in all these appeals, common questions of law and facts and involved, they are decided by this common judgment. 2. Before proceeding with matter, it will not be out of place to mention here that statement was made by Mr. Jhanwar that everything is recovered by auctioning house and factory. Today, he stated that there is no scope for recovery of any amount from appellant. However, matter is decided by wasting precious judicial time of more than 40 to 45 minutes by hearing both counsel. Therefore, now we are proceeding with matter. 3. By way of these appeals, appellants have challenged judgment and order passed by tribunal whereby tribunal has allowed appeal of assessee only for statistical purpose but has rejected substantial relief. 4. While admitting appeals, following question of law has been framed by this Court:- (3 of 8) [ ITA-57/2002] D.B. Income Tax Appeal No.57/2002 admitted on 03.07.2002:- Whether on facts and in circumstances of case, tribunal was justified in sustaining addition of Rs.119.73 lakhs and treated as undisclosed income of appellant, irrespective of fact that inter-transactions are involved in group of cases including appellant and other cases of group have been set-aside by Tribunal for making full inquiry and investigation t reach on final conclusion, such duality of approach of Tribunal does not make impugned order of Tribunal as perverse? D.B. Income Tax Appeal No.35/2007 admitted on 02.05.2017:- Whether on facts and in circumstances of case, tribunal was justified in sustaining addition of Rs.119.73 lakhs and treated as undisclosed income of appellant, irrespective of fact that inter-transactions are involved in group of cases including appellant and other cases of group have been set-aside by Tribunal for making full inquiry and investigation to reach on final conclusion, such duality of approach of Tribunal does not make impugned order of Tribunal as perverse? D.B. Income Tax Appeal No.304/2008 admitted on 05.11.2008:- (i) Whether provisions of Section 69 are attracted when transaction of investment is duly recorded in books of account and source of such investment are reflected in books of account itself? (ii) Whether it is correct to make additions u/s 669 of Act on account of alleged unexplained investment in respect of deposits in bank when same has been made out of assets/amounts available with appellant at beginning of accounting year and subsequently out of realization of opening assets? (4 of 8) [ ITA-57/2002] D.B. Income Tax Appeal No.320/2008 admitted on 04.11.2008:- (i) Once Income Tax Department has chosen to tax complete unaccounted Income of whole group amounting to Rs.119.76 Lacs in hands of Shri V.M. Dawra, head of group and husband of appellant, on basis of working of unaccounted income of all persons/companies and concerns of group including appellant, then whether again making addition on basis of some entries from books of appellant would not tantamount to double additions? (ii) Whether additions can be made in Block Assessment without any evidence or material found/discovered as result of search and merely on basis of inquiry during course of Assessment Proceedings? (iii) Whether action of learned Income Tax Appellate Tribunal in upholding addition to exdtent of Rs.35,11,063/- & 2,30,000/- u/s. 68/69 has not resulted in double taxable of same amount in two hands as addition of same amount stands covered by amount of addition made in hands of Sh. V.M. Dawra and whether in view of same, in addition to this extent in hands of appellant is not unjustified? 5. Mr. Jhanwar counsel for appellant has taken us to Para 5 of order of tribunal which reads as under:- genesis of funds, which have flowed into company s offers, by way of promoters equity, through medium of directors, proprietorship concerns/associated concerns their dummy concerns was enquired into for its veracity/genuinness. Vide letter dated 27.1.97, on basis of outcome of this working, as discussed in th case of director Shri V.M. Dawra, amount of Rs.11973000/- was admitted as undisclosed funds in promoters quota. It transpired that in absence of genuine sources, within meaning of Sec.68 of Act, amount of Rs.1.19 crores constitutes undisclosed income of assessee company, actual source of which appears to be over capitalisation, for asstt. Years 95-96. It may be mentioned that this working was in respect of unaccounted investment channelised through (5 of 8) [ ITA-57/2002] Director Shri V.M. Dawra. 6. He contended that in case of Vimal Choudhary, one of Director, matter was remanded back to authority and relief was granted which was not challenged by Department and matter has attained finality. In case of Mr. U.S. Baid, appeal was preferred but same covered by Circular under Low Tax Effect. 7. Mr. Sanjay Jhanwar counsel for appellant has taken us to para 6 of order of Tribunal which shows calculation of each of Director namely Mr. V.M. Dawra-Rs.11973000/-, in case of Mr. Vimal Choudhary-Rs.5899740/-, in case of Mr. U.S. Baig-Rs.1750000/- and as stated hereinabove that there are different stands, therefore he contended that on ground of parity if department has accepted case of Mr. Vimal Choudhary, then case of Mr. V.M. Dawra also deserves to be allowed and parity may be maintained. 8. He further contended that tribunal while observing that in case company where block assessment account made by Chartered Accountant was accepted, application was preferred under Section 256(1) to seek permission, with reference to question of law to High Court but same was rejected against which Department has not preferred any appeal. Thus, company matter stood final. 9. He has also pointed out Para 17 of order of Tribunal which reads as under:- (6 of 8) [ ITA-57/2002] appellant did not file any return of block period. Before DCIT (Assessment), M/s Kalani and Co., Chartered Accountants, through letter dated 21.1.97 signed by Shri Sanjay Jhanwar who has also appeared before us and argued present appeal submitted note on brief facts and case and note on working on basis of regular books, bank accounts and other information. brief facts in note are stated to have been supported by number of annexures submitted with said letter written regarding Dawra group cases and Terry Fab India Ltd. Duing course of block assessment proceedings. 10. He has taken us to provisions of Section 158 BC of Income Tax Act and explanation thereto and contended that in view of parity, block assessment of company when source of income is known, at most observations which are made or statement which was recorded reads as under:- Our working is being prepared and submitted to you without prejudice to assessee s claim that it has not earned anything out of all these transactions. assessee claims that funds have been arranged from various sources and have been utilised. 11. He contended that in spite of that if any material was found, it can t be added in income of Director. He further contended that without there being any material, income could not have been added merely on letter written by Charted Accountant. 12. Mr. R.B. Mathur, counsel for respondent has taken us to para 6 of order to Tribunal which reads as under:- Summarily it can be said that total unaccounted money involved in case of Terryfab (I) Ltd. (including its promoters is Rs.119.73 lacs. (7 of 8) [ ITA-57/2002] Since unaccounted money to this extent was to be utlised for purpose of investment in Terryfab (I) Ltd., it was necessary to channelise said money through different routes and medium so that it stands as explained receipts in hands of Terryfab (I) Ltd. This job of channelising unaccounted money was done by Shri V.M. Dawra for and on behalf of all promoters (who have actually arranged such money) by floating number of concerns. only thing which has been done in this working apart from quantifying unaccounted money is that root and route of channelisation of unaccounted money has been found out. However, point of origin of unaccounted money/source thereof has still to be investigated, which does not come out of records. At same time we assert that accountant investigation suggests that unaccounted money has been originated in hands of company Terryfab (I) Ltd. (may be in form of direct loan raised or advances taken or over capitalisation). After such origin money has been channelised through long route to make it difficult for anybody to relate back source to origin. and contended that view taken by tribunal is just and proper. 13. We have heard counsel for parties. 14. First of all, on question of company, in view of fact that original order which was passed under Section 256(1), in which relief was granted and permission was not granted by Tribunal which was not challenged. In that view of matter, order of company would stand final. 15. In case of V.M. Dawra, in view of statement which was made, since source of income is to be established by department and they cannot merely rely on letter written by Chartered Accountant, in that view of matter, contention raised by counsel for Mr. V.M. Dawra is required to be accepted. (8 of 8) [ ITA-57/2002] Even otherwise in case of Mr. Vimal Choudhary, matter was remanded back to authority and relief was granted which was not challenged by department. On basis of reasoning given by tribunal, if in one case, department has not challenged order of tribunal which was remitted back and relief granted in favour of assessee. 16. In our considered opinion, on principle of parity, Mr. V.M. Dawra is required to be granted same relief. 17. In that view of matter, issue is answered in favour of assessee and against department. 18. appeal stands allowed. 19. In view of order passed in Appeal No.57/2002 in case of V.M. Dawra, all other appeals stand disposed of. copy of this order be placed in each file. (INDERJEET SINGH),J. (K.S. JHAVERI),J. Jyoti Item No.4-7 V M Dawra v. Commissioner of Income-tax, Jaipur / Dy. Commissioner of Income-tax Spl. Range-2, Jaipur
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