Case Note & Summary
The case involves two tax appeals filed by the Commissioner of Income Tax, Karnataka (Central), Bangalore, against the respondents Sadiq Sheikh and Sadia Sheikh, who are spouses. The appeals arise from a common assessment order under Section 153A of the Income Tax Act, 1961, following a search conducted on 25.02.2010 under Section 132 at the residential premises of the assessees in Dona Paula, Goa. The assessees had originally filed returns declaring total income of Rs.7,36,911 and agricultural income of Rs.30,000. After the search, the case was centralized, and notices under Section 153A were issued. The Assessing Officer made additions of Rs.11,26,50,112 and Rs.8,49,49,888 towards unaccounted cash receipts. The Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal deleted these additions. The Revenue appealed to the High Court on substantial questions of law regarding the correctness and perversity of the Tribunal's findings. The High Court, after hearing the parties, held that the Tribunal's findings were based on appreciation of evidence and were not perverse. The court found that no substantial question of law arose, as the issues were essentially factual. Consequently, the appeals were dismissed.
Headnote
A) Income Tax - Unaccounted Cash Receipts - Section 132, 153A, 5A Income Tax Act, 1961 - Deletion of Addition by Tribunal - The Revenue challenged the Tribunal's deletion of additions of Rs.11,26,50,112 and Rs.8,49,49,888 made by the Assessing Officer towards unaccounted cash receipts following a search under Section 132. The High Court held that the Tribunal's findings were based on appreciation of evidence and were not perverse; no substantial question of law arose. (Paras 2-4)
Issue of Consideration
Whether the Income Tax Appellate Tribunal was correct in law and not perverse in deleting the additions made by the Assessing Officer towards unaccounted cash receipts.
Final Decision
Both tax appeals are dismissed. The Tribunal's order deleting the additions is upheld.
Law Points
- Section 132 Income Tax Act
- 1961
- Section 153A Income Tax Act
- Section 5A Income Tax Act
- unaccounted cash receipts
- search and seizure
- assessment of undisclosed income
- substantial question of law
- perversity of findings
Case Details
2020 LawText (BOM) (10) 80
Tax Appeal No. 18 of 2014 and Tax Appeal No. 19 of 2014
M. S. Sonak, Dama Seshadri Naidu
Ms. Susan Linhares for the Appellant; Mr. S. S. Kantak, Senior Advocate along with Mr. Nikhil Pai for the Respondent
The Commissioner of Income Tax, Karnataka (Central), Bangalore
Sadiq Sheikh and Sadia Sheikh
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Nature of Litigation
Tax appeal by Revenue against deletion of additions by Tribunal
Remedy Sought
Revenue sought to set aside the Tribunal's order deleting additions of unaccounted cash receipts
Filing Reason
Revenue challenged the Tribunal's deletion of additions made by Assessing Officer
Previous Decisions
Assessing Officer made additions; CIT(A) and Tribunal deleted additions
Issues
Whether the Tribunal was correct in law and not perverse in deleting the amount of Rs.11,26,50,112 made by the Assessing Authority towards unaccounted cash receipts?
Whether the Tribunal was correct in law and not perverse in deleting the amount of Rs.8,49,49,888 made by the Assessing Authority towards unaccounted cash receipts?
Submissions/Arguments
Appellant argued that the Tribunal's findings were perverse and not based on evidence.
Respondent argued that the Tribunal's findings were based on appreciation of evidence and were not perverse.
Ratio Decidendi
The Tribunal's findings on factual issues, based on appreciation of evidence, are not perverse and do not give rise to a substantial question of law.
Judgment Excerpts
The learned counsel state that both these appeals may be disposed of by a common judgment and order since, the issues involved in both these appeals are virtually identical and also the substantial questions of law as framed, are identical.
Tax Appeals were admitted on 25.09.2014 on the following substantial questions of law:- (A) Whether on the facts and circumstances of the case, the Tribunal was correct in law and not perverse in its findings in deleting the amount of Rs.11,26,50,112/- made by the Assessing Authority towards unaccounted cash receipts? (B) Whether on the facts and circumstances of the case, the Tribunal was correct in law and not perverse in its findings deleting the amount of Rs.8,49,49,888/- made by the Assessing Authority towards unaccounted cash receipts?
Procedural History
Search under Section 132 on 25.02.2010; case centralized on 16.07.2010; notices under Section 153A on 20.01.2011; assessees filed returns; Assessing Officer made additions; CIT(A) deleted additions; Tribunal confirmed deletion; Revenue filed tax appeals on 25.09.2014; appeals dismissed on 14.10.2020.
Acts & Sections
- Income Tax Act, 1961: Section 132, Section 153A, Section 5A
