Commissioner of Income-tax, Central-II v. Jyoti H. Mehta
[Citation -2017-LL-0726-11]

Citation 2017-LL-0726-11
Appellant Name Commissioner of Income-tax, Central-II
Respondent Name Jyoti H. Mehta
Court HIGH COURT OF BOMBAY
Relevant Act Income-tax
Date of Order 26/07/2017
Judgment View Judgment
Keyword Tags interest expenditure • reasonable cause • additional evidence • rejecting books of account • fresh assessment • unaccounted investment • disallowance of interest
Bot Summary: 2 Mr.Malhotra, the learned counsel for the appellant submits that Commissioner of Income Tax had rightly rejected production of additional evidence in the shape of books of accounts after the said books of accounts were produced after ten years. For the Assessment year 1992 93 when the Assessing Officer had rejected the books of accounts and the Tribunal had directed to compute as per the books of accounts, this court had admitted the appeal filed by the Department. 4 Mr.Toprani, the learned counsel for respondent, submits that in respect of different assessees of the same group, the Tribunal had directed the Assessing Officer to consider the books of accounts and the said orders have become final. The learned counsel submits that even the Assistant Commissioner in one of the group assessees' appeal, had directed the Assessing Officer to rework the assessment by taking into account the evidence of books of accounts. The Tribunal could not have directed the Assessing Officer to compute the income only on the basis of books of accounts. Avk 4/6 ::: Uploaded on - 28/07/2017 ::: Downloaded on - 29/07/2017 10:01:14 ::: 69-ITXA-1193-2014-ITXA-1173-2014.doc 8 In light of above, we pass the following order : i) The order of the Tribunal to the extent of allowing the production of additional evidence, that is, books of accounts, is maintained. Ii) The directions of the Tribunal with regard to determination of unaccounted investments, disallowance of deduction on account of interest expenditure, disallowance of deduction on account of other expenditure, to hold the sale of shares as capital gains and allow deduction under Section 48 of the Income Tax Act, will all depend upon the decision of the Assessing Officer with regard to the books of accounts and its decision upon the genuineness of the entries avk 5/6 ::: Uploaded on - 28/07/2017 ::: Downloaded on - 29/07/2017 10:01:14 ::: 69-ITXA-1193-2014-ITXA-1173-2014.doc therein.


IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1193 OF 2014 COMMISSIONER OF INCOME TAX ) CENTRAL II )...APPELLANT V/s. SMT.JYOTI H. MEHTA )...RESPONDENT WITH INCOME TAX APPEAL NO.1173 OF 2014 COMMISSIONER OF INCOME TAX ) CENTRAL II )...APPELLANT V/s. SHRI HITESH S. MEHTA )...RESPONDENT Mr.Ashok Kotangle a/w. Mr.A.D.Nagarjun, Mrs.Padma Divakar, Mr.Jayan Gaikwad and Mr.Pradip Badgude, Advocate for Appellant in ITXA No.1193 of 2014. Mr.A.R.Malhotra a/w. Mr.N.A.Kazi and Mrs.Padma Divakar, Advocate for Appellant in ITXA No.1173 of 2014. Mr.Pankaj Toprani a/w. Ms.Krupa Toprani i/b. PRH Juris Consults, Advocate for Respondent in both Appeals. CORAM : S.V.GANGAPURWALA & A. M. BADAR, JJ. DATE : 26th JULY 2017 avk 1/6 ::: Uploaded on - 28/07/2017 ::: Downloaded on - 29/07/2017 10:01:14 ::: 69-ITXA-1193-2014-ITXA-1173-2014.doc P.C. : 1 These appeals are with regard to Assessment Year 1991 92. Both appeals involve common question. 2 Mr.Malhotra, learned counsel for appellant submits that Commissioner of Income Tax (Appeals) had rightly rejected production of additional evidence in shape of books of accounts after said books of accounts were produced after ten years. source of entries is also not known. remand notice was called by Commissioner. Tribunal ought not to have interfered with order of Commissioner. According to learned counsel, test as laid down in Rule 43 of Income Tax Rules is also not being satisfied. Moreover, for Assessment year 1992 93 when Assessing Officer had rejected books of accounts and Tribunal had directed to compute as per books of accounts, this court had admitted appeal filed by Department. learned counsel submits that if after ten years, assessee is allowed to produce books of accounts, it will lead to chaotic situation. avk 2/6 ::: Uploaded on - 28/07/2017 ::: Downloaded on - 29/07/2017 10:01:14 ::: 69-ITXA-1193-2014-ITXA-1173-2014.doc 3 Mr.Kotangle, learned counsel for appellant adopts arguments of Mr.Malhotra. 4 Mr.Toprani, learned counsel for respondent, submits that in respect of different assessees of same group, Tribunal had directed Assessing Officer to consider books of accounts and said orders have become final. Revenue has accepted said orders. appeals are filed only in respect of eight cases. similar orders were passed in respect of more than 90 assessees of same group. learned counsel submits that even Assistant Commissioner in one of group assessees' appeal, had directed Assessing Officer to rework assessment by taking into account evidence of books of accounts. said order is passed in Civil Appeal No.6326 of 2010 on 2nd May 2017. 5 We have considered submissions. production of additional evidence has to be within parameters as set out in Rule 46A of Income Tax Rules. Tribunal has found that avk 3/6 ::: Uploaded on - 28/07/2017 ::: Downloaded on - 29/07/2017 10:01:14 ::: 69-ITXA-1193-2014-ITXA-1173-2014.doc assessee was prevented by reasonable cause for not being able to file books of accounts earlier. reasons given for production of additional evidence, it appears, are plausible, and would be within purview of Rule 46 of Income Tax Rules. discretion has been exercised by Tribunal. However, it is found that Tribunal has exceeded and gone beyond scope of Rule 46. Tribunal could not have directed Assessing Officer to compute income only on basis of books of accounts. It will have to be left to Assessing Officer to test genuineness and authenticity of entries in books of accounts and thereafter pass fresh assessment order. 6 All other issues framed herein appear to be germane to directions of Tribunal directing Assessing Officer to accept books of accounts. 7 We are inclined to adopt same course as by Apex Court in Civil Appeal No.6326 of 2010 in case of Jyoti Mehta vs. Custodian and Ors. avk 4/6 ::: Uploaded on - 28/07/2017 ::: Downloaded on - 29/07/2017 10:01:14 ::: 69-ITXA-1193-2014-ITXA-1173-2014.doc 8 In light of above, we pass following order : i) order of Tribunal to extent of allowing production of additional evidence, that is, books of accounts, is maintained. However, we clarify that it will be open for Assessing Officer to test genuineness and authenticity of entries in books of accounts and thereafter pass assessment order afresh. ii) directions of Tribunal with regard to determination of unaccounted investments, disallowance of deduction on account of interest expenditure, disallowance of deduction on account of other expenditure, to hold sale of shares as capital gains and allow deduction under Section 48 of Income Tax Act, will all depend upon decision of Assessing Officer with regard to books of accounts and its decision upon genuineness of entries avk 5/6 ::: Uploaded on - 28/07/2017 ::: Downloaded on - 29/07/2017 10:01:14 ::: 69-ITXA-1193-2014-ITXA-1173-2014.doc therein. iii)The Assessing Officer will be entitled to take decision afresh in all aspects of matter. iv)It is also made clear that Assessing Officer will provide material relied by it to assessee before passing any order. v) appeals, as such, are disposed of with aforesaid observations and directions. (A. M. BADAR, J.) (S.V.GANGAPURWALA, J.) avk 6/6 ::: Uploaded on - 28/07/2017 ::: Downloaded on - 29/07/2017 10:01:14 ::: Commissioner of Income-tax, Central-II v. Jyoti H. Mehta
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