THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 30.01.2013
+ ITA No.43/2013
COMMISSIONER OF INCOME TAX-XI ... Appellant
versus
KULDEEP SOOD ... Respondent
Advocates who appeared in this case:
For the Petitioner : Mr Sanjeev Rajpal
For the Respondent : None
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE R.V.EASWAR
JUDGMENT
R.V.EASWAR, J
This appeal has been filed by the Revenue and it is directed against
the order passed by the Income Tax Appellate Tribunal (,,Tribunal for
short) on 22nd June, 2012 in ITA(SS) No.61/Del/2009. The Revenue
seeks admission of the appeal on the following questions of law stated to
be substantial questions of law:-
"I. Whether the ITAT has not erred in law in case of the
respondent for deleting the addition of `26,27,610/- for AY
1998-1999 in the block assessment as his undisclosed income
substantively from his proprietorship concern ?
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II. Whether the impugned order is not perverse?"
2. In the assessment made under Section 158BC of the Act on 27th
June, 2001 pursuant to a search of the assessees business and residential
premises, the AO made an addition of `1,44,19,919/-. This addition was
made in the following years:-
Financial Year / Undisclosed Income
Assessment Year
1995-96 ` 1,04,79,248/-
1996-97 ` 13,13,061/-
1997-98 ` 26,27,610/-
Total ` 1,44,19,919/-
The basis of the addition was the view taken by the AO that the business
carried on in the name and style of M/s Transworld International
belonged to the assessee and not to his wife as claimed. The assessee had
claimed before the AO that the above business was transferred to his wife
Mrs.Pallavi Sood after 1994 and thereafter the business was being run by
her and, therefore, the entire income from that business should be
assessed in her hands. In support of the claim an affidavit from the
assessees wife was filed before the AO. The affidavit was however
rejected as an afterthought; it was noted that the statement given by the
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assessees wife on oath earlier before the income tax authorities should be
given more weight. It was also claimed before the AO that the income
from M/s Transworld International was declared in the returns filed in the
name of assesssees wife. This claim was also brushed aside by the AO
as irrelevant. It was in these circumstances that the aforesaid addition
came to be made in the block assessment order.
3. On appeal the CIT (Appeals) deleted the addition of `26,27,610/-,
following his predecessors order. It appears that h is predecessor had
deleted the additions on the ground that the income from Transworld
International had been disclosed in the returns filed by the assessees wife
under Section 139(1) of the Act.
4. The Revenue carried the matter in appeal before the Tribunal. The
Tribunal after hearing the rival contentions and after taking note of the
facts confirmed the decision of the CIT (Appeals), observing as follows:-
"We have considered the facts of the case. We find that
identical additions were made for three years in the case of the
wife and the assessee. The appeal in the case of wife was
disposed off by the Ld.CIT(A) on 27.10.2003. In this order the
assessee is held to be the owner of M/s Transworld International
upto assessment year 1996-97. Smt. Pallavi Sood has been held
to be owner of this proprietary concern from assessment year
1997-98. The order in the case of wife has become final. It
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may be added that the addition has been deleted in her case also
on the ground that the transactions of M/s Transworld
International had been taken into account and profit from this
concern was declared by her at `1,04,996/-. This finding has
not been challenged by the revenue as stated by the Ld. Counsel
in the brief-note filed before us in the course of hearing.
Therefore, this finding has become final, which means that the
income from this concern for assessment year 1997-98 cannot
included in the hands of the assessee. Following the rule of
consistency, it is held that Ld. CIT(A) was right in deleting the
addition, representing income from aforesaid concern, from the
assessment of the assessee."
5. It will be appreciated from the above that the Revenue had
accepted the order of the CIT (Appeals) in which she was held to be the
owner of M/s Trans World International from the assessment year 1997-
98 and that her husband, the assessee before us, was the owner of the said
concern only upto the assessment year 1996-97. The finding as to the
ownership of a particular business is a finding of fact. In the present case
the CIT (Appeals) had found as a fact that from the assessment year
1997-98 it was the assessees wife Mrs. Pallavi Sood who was the owner
of M/s Trans World International. It was on that basis that she had filed
the return of income and the finding of the CIT (Appeals) was also
accepted by the Revenue. The finding of fact has not been challenged
before us as perverse. It seems to us that the Revenue, having accepted
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the finding in the assessees wifes case, cannot take a different view in
the assessment of the husband. That would amount to taking
contradictory or inconsistent stands without any just cause. We do not,
therefore, see any infirmity or error of law in the decision of the Tribunal.
Its order does not give rise to any substantial question of law as it is based
on not only the findings of fact but also on the Revenues own conduct.
We accordingly see no merit in the appeal filed by the Revenue which
stands dismissed with no order as to costs.
R.V.EASWAR, J
BADAR DURREZ AHMED, J
JANUARY 30, 2013
Bisht
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