2018 (9) TMI 1178 - HC - Income Tax

Addition on protective assessment - sum seized from the present assessee was surrendered, offered and accepted as part of the larger amount - Held that - It is quite evident that the sum of ₹ 86 lakhs, though seized from the present assessee was surrendered, offered and accepted as part of the larger amount of ₹ 2.26 crores by the asseesse s employer i.e. Mr. Sunil Aggarwal and as such no question of law therefore arises because that amount was brought to tax. As far as the other sum of ₹ 41 lakhs is concerned, we notice that the Revenue does not appear to have even preferred an appeal before this Court against the order of the ITAT made at the hands of Mr. Sunil Aggarwal, on a substantive basis. The insistence on stating that that amount should be added in the hands of the present assessee (Mr. Gopal Singh Sood) is not justified. No question of law arises

Summary

Issues:
1. Impugned order of the Income Tax Appellate Tribunal (ITAT) dated 06.10.2004 under Section 260-A of the Income Tax Act for the block period 1987-88 to 1997-98.
2. Assessment of undisclosed income of &8377; 3,71,79,576/- under Section 158BC(1) for Mr. Sunil Aggarwal and the subsequent assessment of Mr. Gopal Singh Sood.
3. Dismissal of ITA 224/2003 by the Tribunal and the concurrent view of the two Members regarding the additions made in the sum of &8377; 86 lakhs to the income of the Assessee.

Analysis:

1. The High Court noted that the appeal under Section 260-A of the Income Tax Act had been pending for over 14 years without any question of law framed. This delay was due to the appeal being tagged with other connected appeals, including ITA 224/2003, which was dismissed by the Revenue on 02.11.2015.

2. The case involved the search and seizure operations conducted on Mr. Sunil Aggarwal, resulting in the assessment of undisclosed income of &8377; 3,71,79,576/- under Section 158BC(1). During the search, a substantial cash amount was found with Mr. Gopal Singh Sood, an employee of Mr. Sunil Aggarwal, leading to income tax proceedings against him. The Tribunal set aside the amounts added to Mr. Gopal Singh Sood's income, assessing him on a protective basis.

3. The ITAT, while dismissing ITA 224/2003, considered the additions made in the sum of &8377; 86 lakhs to the income of the Assessee. The Bench comprising Mr. R.K. Gupta and Mr. R.S. Syal held that the addition of &8377; 86 lakhs was not justified as the explanation provided by the Assessee had been accepted by the Assessing Officer. The Court agreed that the sum of &8377; 86 lakhs, though seized from Mr. Gopal Singh Sood, was part of the larger amount surrendered by Mr. Sunil Aggarwal, and no question of law arose regarding this amount.

4. The Court further observed that the Revenue did not appeal against the order of the ITAT regarding the sum of &8377; 41 lakhs in the hands of Mr. Sunil Aggarwal. Therefore, the insistence on adding this amount to Mr. Gopal Singh Sood's income was deemed unjustified. Consequently, the Court dismissed the appeal, stating that no question of law arose in the case.

This comprehensive analysis of the judgment highlights the key issues involved, the assessment proceedings, the Tribunal's decision, and the Court's final dismissal of the appeal based on the lack of legal questions arising from the case.