Cit Vs. Standard Brands Ltd.

Cit vs Standard Brands Ltd.

Type Court Judgment Court Delhi Decided Jul 04, 2006

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Citation: sooperkanoon.com/716011
Court: Delhi High Court
Judge: Madan B. Lokur and; Vipin Sanghi, JJ.
Decided On: Jul 04, 2006
Case Number: IT Appeal No. 66 of 2005 4 July, 2006
Subject: Direct Taxation

Case Summary

AI-generated summary - not the official court judgment text.

Direct Taxation - assessment - whether assessed guilty under Section 269SS of Income Tax Act - Revenue not entitled to contend on one hand that amount of Rs. 3 lacs was undisclosed income in hands of assessed and at same time seek to initiate proceedings against assessed for violation of Section 269SS dealing with c...

Key legal issue: Direct Taxation

Parties & Advocates

Appellant / Petitioner

Cit

Advocate Sanjeev Sabharwal, <i>for the Appellant </i>Dr. Rakesh Gupta & Pankaj Dhaudiyal, <i>for the Respondent.</i>

Respondent

Standard Brands Ltd.

Legal References

Reported In: [2006]285ITR295(Delhi)

Excerpt

direct taxation - assessment - whether assessed guilty under section 269ss of income tax act - revenue not entitled to contend on one hand that amount of rs. 3 lacs was undisclosed income in hands of assessed and at same time seek to initiate proceedings against assessed for violation of section 269ss dealing with cash deposit on loans in excess of rs. 20000 - as block assessment not sustainable penal action be permissible after regular assessment is made - - 5. insofar as the quantum issue is concerned, the commissioner (appeals) in a separate order dated 6-9-2000 came to the conclusion (in paragraph 7.2 of the said order) that the addition under section 158bc of the act could not be sustained and that the assessing officer could at best have taken action under section 147 of the act......r. 3 lakhs in cash from m/s. d.s. imports. according to the assessing officer, the amount represented undisclosed income in the hands of the assessed while according to the assessed it was a deposit made by m/s. d.s. imports.3. notwithstanding the fact that the revenue was of the view that the amount was undisclosed income, penalty proceedings were initiated against the assessed for the violation of provisions of section 269ss of the income tax act, which provides that loans or deposits in excess of rs. 20,000 should not be received in cash.4. the assessed approached the commissioner (appeals) who passed an order on 6-10-2000 in which it was accorded that the assessed had received a deposit of rs. 3 lakhs in cash in contravention of section 269ss of the act and penalty under section 27 1 d of the act was imposable against the assessed.feeling aggrieved, the assessed filed an appeal out of which the impugned order dated 26-7-2004 has arisen.5. insofar as the quantum issue is concerned, the commissioner (appeals) in a separate order dated 6-9-2000 came to the conclusion (in paragraph 7.2 of the said order) that the addition under section 158bc of the act could not be sustained and that the assessing officer could at best have taken action under section 147 of the act. accordingly, the addition of rs. 3 lakhs was deleted without prejudice to the action that the assessing officer may take for taxing this amount in regular assessment proceedings including proceedings under section 147 of the act.6. against the order dated 6-9-2000, the revenue preferred an appeal before the income tax appellate tribunal. by an order dated 6-10-2004, the tribunal (in paragraph 9 of the said order) upheld the view taken by the commissioner (appeals) in his order dated 6-9-2000. the tribunal held that the receipt was outside the scope of undisclosed income defined under section 158b(b) of the act.7. on these facts, we are of the view that the revenue could not on the one hand, contend.....

Full Judgment

ORDER

1. The revenue is aggrieved by an order dated 26-7-2004 passed by the Income Tax Appellate Tribunal in ITA No. 24 (Delhi)/2001. The impugned order has been passed in respect of the block period 1-4-1986 to 31-3-1997.

2. It appears that the assessed had received an amount of R. 3 lakhs in cash from M/s. D.S. Imports. According to the assessing officer, the amount represented undisclosed income in the hands of the assessed while according to the assessed it was a deposit made by M/s. D.S. Imports.

3. Notwithstanding the fact that the revenue was of the view that the amount was undisclosed income, penalty proceedings were initiated against the assessed for the violation of provisions of section 269SS of the Income Tax Act, which provides that loans or deposits in excess of Rs. 20,000 should not be received in cash.

4. The assessed approached the Commissioner (Appeals) who passed an order on 6-10-2000 in which it was accorded that the assessed had received a deposit of Rs. 3 lakhs in cash in contravention of section 269SS of the Act and penalty under section 27 1 D of the Act was imposable against the assessed.

Feeling aggrieved, the assessed filed an appeal out of which the impugned order dated 26-7-2004 has arisen.

5. Insofar as the quantum issue is concerned, the Commissioner (Appeals) in a separate order dated 6-9-2000 came to the conclusion (in paragraph 7.2 of the said order) that the addition under section 158BC of the Act could not be sustained and that the assessing officer could at best have taken action under section 147 of the Act. Accordingly, the addition of Rs. 3 lakhs was deleted without prejudice to the action that the assessing officer may take for taxing this amount in regular assessment proceedings including proceedings under section 147 of the Act.

6. Against the order dated 6-9-2000, the revenue preferred an appeal before the Income Tax Appellate Tribunal. By an order dated 6-10-2004, the Tribunal (in paragraph 9 of the said order) upheld the view taken by the Commissioner (Appeals) in his order dated 6-9-2000. The Tribunal held that the receipt was outside the scope of undisclosed income defined under section 158B(b) of the Act.

7. On these facts, we are of the view that the revenue could not on the one hand, contend that the amount of Rs. 3 lakhs is undisclosed income in the hands of the assessed and at the same time seek to initiate proceedings against the assessed for violation of the provisions of section 269SS of the Act which deals with cash deposits or loans in excess of Rs. 20,000.

8. The revenue, having taken the stand that the income was undisclosed income in the hands of the assessed, it could not resort to proceedings under section 269SS read with section 271D of the Act, as held by the Tribunal.

9. Additionally, we agree with learned counsel for the assessed that since a block assessment could not be sustained, penal action may be permissible (if at all) only after a regular assessment is made.

10. Under these circumstances, in our opinion, no substantial question of law arises in this appeal.

11. Dismissed.

Same Court & Year Delhi · 2006 Same Parties Cit vs Standard Brands Ltd. Same Subject Direct Taxation Same Judge Madan B. Lokur and; Vipin Sanghi, JJ.

Direct Taxation