# Sri Ajay Gupta v. Commissioner of Income Tax (Appeals) Meerut & Anr

- **Citation:** (2019) 4 ILRA 833
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-11-13
- **Case number:** Income Tax Appeal No. 357 of 2010
- **Bench:** Bharati Sapru, Rohit Ranjan Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sri-ajay-gupta-v-commissioner-of-income-tax-appeals-meerut-anr-44956
- **Pages:** 4

## Headnote

A. Tax Law - Income Tax Act, 1961:
Section 131, 132, 132(4A), 142(1), 158BC, 250, 263 - Presumption provided u/s
132 (4A) is not in absolute terms but is
subject to corroborative evidence.

The presumption u/s 132 (4A) is not provided
in absolute terms and the word used is "may"
and not "shall", as such the revenue has to
corroborate the entries made in the seized
documents before presuming that transactions
so entered were made by the assessee. (Para
11, 12)

Appeal partly allowed. Matter remitted
back to Tribunal. (E-4)

Precedent followed:

## Text

4 All. Sri Ajay Gupta Vs. Commissioner of Income Tax (Appeals) Meerut & Anr.
833

12. In view of above provision
of the Act as well as rate of tax applicable
at the relevant time, the tax on the sale of
coal within the said limit was @ 4 %. In
view of Section 8 (2) (a) of the Act, sale
of coal made by the revisionist without
Form-C can be taxed at twice as the rate
applicable in State i.e. @ 4 +4 =8 % and
not above that.

13. In such circumstances, the
Tribunal was not justified in imposing the
tax on the sale of coal without Form-C @
10 % treating the same under Section 8
(2-b) as undeclared goods.

14. In the results, the impugned
order is modified to that extent. The
question of law is answered accordingly
in favour of the assessee and against the
department.

15. The revision is allowed.
----------
(2019)12 ILR A833

APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 13.11.2019

BEFORE
THE HON'BLE BHARATI SAPRU, J.
THE HON'BLE ROHIT RANJAN
AGARWAL,J.

Income Tax Appeal No. 357 of 2010

Sri Ajay Gupta ...Appellant
Versus
Commissioner of Income Tax (Appeals)
Meerut & Anr. ...Respondents

Counsel for the Appellant:
Sri Shubham Agrawal, Sri Parv Agarwal

Counsel for the Respondents:
C.S.C., Sri Krishna Agrawal, Sri Shubham
Agarwal, Sri D. Awasthi
A. Tax Law - Income Tax Act, 1961:
Section 131, 132, 132(4A), 142(1), 158BC, 250, 263 - Presumption provided u/s
132 (4A) is not in absolute terms but is
subject to corroborative evidence.

The presumption u/s 132 (4A) is not provided
in absolute terms and the word used is "may"
and not "shall", as such the revenue has to
corroborate the entries made in the seized
documents before presuming that transactions
so entered were made by the assessee. (Para
11, 12)

Appeal partly allowed. Matter remitted
back to Tribunal. (E-4)

Precedent followed:

1. CIT, Kanpur Vs. Shadiram Ganga Prasad,
2010 UPTC 840 (Para 11)

Present appeal is against order dated
12.03.2010, passed
by
Income
Tax
Appellate Tribunal, New Delhi.

(Delivered by Hon'ble Rohit Ranjan
Agarwal, J.)

1. This appeal under Section 260-A
of the Income Tax Act has been filed by
the assessee challenging the order of the
Income Tax Appellate Tribunal Delhi
Bench "A" New Delhi (hereinafter called
as
ITAT)
dated
12.03.2010,
partly
allowing the appeal of the department.

2. This appeal was admitted on
22.11.2010 on the following questions of
law:

"1. Whether the presumption
under Section 132(4A) of the Income Tax
Act can be raised in the assessment
proceeding?

2. Whether apart from from
section 132(4A) of the Income Tax Act,
the burden to explain the documents
834 INDIAN LAW REPORTS ALLAHABAD SERIES
seized from the possession of the assessee
during search is upon him and if it so,
then has he discharge the burden."

3. Brief facts of case are that
residential premises of the assessee was
searched under Section 132 of Income
Tax Act (hereinafter called as the 'Act') on
28.02.2000. Locker No. 64 Dena Bank,
Abu Lane Branch, Meerut, which is in the
joint name of assessee and his wife Smt.
Aneeta Gupta, was also searched. During
search, jewellery worth Rs.7.44 lakhs was
found from the assessee, while jewellery
worth Rs.13.55/- lakhs was found in the
locker of assessee, out of which, jewellary
worth Rs.8.87/- lakhs was seized.

4. Notice under Section 158-BC was
issued to the assessee on 03.12.2001 for
filing return of income. In compliance
thereof, assessee filed return of income
declaring
NIL
undisclosed
income.
Assessment
for
block
period
was
completed on 27.03.2002 on undisclosed
income. CIT, Kanpur on 23.05.2003
passed order under Section 263 of the
Act. In compliance to the order under
Section 263, notices under Section 142
(1) of the Act was issued on 25.08.2003
and questionnaire on 04.08.2003. In
compliance of the said notice, assessee
appeared through his legal representatives
and filed his detailed reply. The Assessing
Officer passed order under Section 158BC read with Section 263 of the Act,
assessing the undisclosed income at
Rs.65,33,302/- as against the declared
undisclosed income of NIL.

5. Aggrieved by the said order,
assessee
filed
appeal
before
CIT
(Appeals) Meerut under Section 250 of
the Act on 20.01.2009. CIT (Appeals)
Meerut partly allowed the appeal of the
assessee.

6. Against said order, the revenue
filed appeal before ITAT on two grounds,
firstly, that CIT (A) had erred in law and
fact in deleting the addition of Rs.51,432/-
made by A.O. on account of undisclosed
jewellery. The second ground was for
deletion
made
by
CIT
(A)
of
Rs.5,58,870/- on account of papers found
during search from premises of the
assessee, and the CIT had overlooked the
provisions of Section 132 (4A) of the Act.
The ITAT while partly allowing the
appeal of revenue rejected the first ground
of appeal taken by revenue and upheld the
order passed by CIT (A), while deciding
ground no. 2 it reversed the order of the
CIT (A) and restored that of A.O.

7. Sri Parv Agarwal, learned counsel
appearing for the assessee submitted that
Tribunal while deciding the appeal failed
to consider that revenue did not establish
any connection between the entries
recorded in loose papers found during
search with the books of accounts.
Further, the assessee on 29.11.2004 had
made written submission that he does not
have any knowledge about persons
mentioned in the papers, as well as
categorically denied the transaction. It
was also submitted that the assessee
denied both the papers before DDI
investigation in his statement recorded
under Section 131, which is part of the
record at page 42 of paper book.

8. It was also contended that
Tribunal while reversing the finding of
CIT (A) has only considered the three
judgments relied upon by First Appellate
Authority, and it being the last fact
finding authority did not record any
finding as to how the papers found during
search corroborated with the findings
recorded by the A.O., and on the basis of
presumption available to the revenue
4 All. Sri Ajay Gupta Vs. Commissioner of Income Tax (Appeals) Meerut & Anr.
835
under Section 132 (4A) reversed the
orders of CIT (A).

9. Per contra Sri Krishna Agarawal,
learned
counsel
appearing
for
the
department submitted that the assessee
failed to rebut the presumption under
Section 132 (4A) regarding correctness of
the documents found and seized during
search. He further contended that the
documents relied upon by A.O. was found
during search, as such the Tribunal had
rightly reversed the finding of CIT (A)
and restored the order of A.O., as far as
addition of Rs.5,58,870/- is concerned
which was made on account of papers
found from the premises of assessee
during search.

10. We have heard counsel for the
parties and perused the material on
record. It is not in dispute that two loose
papers were found during search from the
premises of assessee, however, during
block
assessment
proceedings,
the
assessee had denied the documents and
statement
was recorded by Deputy
Director
of
Investigation,
he
had
submitted that he had no concern with the
said documents, so seized. Further, the
A.O. while passing the assessment order
had only on basis of the loose papers
found during search made addition to the
undisclosed income of assessee while the
entries
of
said
papers
remained
uncorroborated.

11. This Court, in the case of CIT,
Kanpur Vs. Shadiram Ganga Prasad,
2010 UPTC 840 has held that the loose
parchas found during search at the most
could lead to a presumption, but the
department cannot draw inference unless
the entries made in the documents, so
found are corroborated by evidence.

12. As, Section 132(4A) of the Act
provides that any books of account,
documents, money, bullion, jewellary or
other valuable articles or things found in
possession or in control of any person in
course of search may be presumed to be
belonging to such person, and further,
contents of such books of account and
documents are true. But this presumption
is not provided in absolute terms and the
word used is "may" and not "shall", as
such the revenue has to corroborate the
entries made in the seized documents
before presuming that transactions so
entered were made by the assessee.
Presumption so provided is not in
absolute
terms
but
is
subject
to
corroborative evidence.

13. In the present case, Tribunal
only on basis of presumption under
Section 132 (4A) of the Act, reversed the
finding of CIT (A), without recording any
finding as to how the loose sheets which
were recovered during search, were linked
with the assessee. In the absence of
corroborative evidence, the Tribunal was
not justified in reversing the finding by
the CIT (Appeals).

14. In view of the above, we are of the
considered view that order passed by Tribunal
reversing the finding of CIT (A) in regard to
deletion of addition made of Rs.5,58,870/-
and restoring the order of A.O. on mere
presumption is unsustainable. The order dated
12th March, 2010 is set aside to that extent,
and the matter is remitted back to Tribunal to
decide afresh, as far as addition of
Rs.5,58,870/- is concerned, within a period of
three months from today.

15. The appeal stands partly
allowed.
----------
836 INDIAN LAW REPORTS ALLAHABAD SERIES
(2019)12 ILR A836

REVISIONAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 25.09.2019

BEFORE
THE HON'BLE SAUMITRA DAYAL SINGH, J.

Commercial Tax Revision No. 872 of 2008
and
Sales/Trade Trade Revision No. 873 of 2008
and
Sales/Trade Tax Revision No. 874 of 2008

Sardar Vallabh Bhai Patel University of
Agriculture and Technology,Meerut
 ...Revisionist
Versus
The Commissioner Commercial Tax U.P.
Lucknow ...Opposite Party

Counsel for the Revisionist:
Sri P.K. Ganguly, Sri Amrendra Pratap
Singh

Counsel for the Opposite Party:
C.S.C.

A. Tax Law - Uttar Pradesh Trade Tax
Act, 1948: Sections 8-D (1), 8-D (6);
Notification No. 2401 dated 27.04.1987 -
A university established under a separate
enactment was not included as a person made
liable to comply with Section 8-D(1) in
notification. Persons not specified in the
notification would stand excluded from the
requirement to make deduction of tax at
source. (Para 8)

B.
Interpretation
of
clause
(c)
of
notification - The words „corporation‟ and
„undertaking‟ clearly refer to status of the person
as a corporation or an undertaking only, while
university is primarily seen and understood as an
educational institution and not a corporation or
undertaking. (Para 10 & 11)

Commercial Tax Revision allowed. (E-4)

Precedent followed:
1. A.V. Fernandez Vs. State of Kerala, AIR
1957 SC 657 (Para 12)

Present revisions are against order dated
11.04.2008, passed by Commercial Tax
Tribunal, Meerut.

(Delivered by Hon'ble Saumitra Dayal
Singh, J.)

1. The present revisions have been
filed by the assessee against common
order of the Tribunal dated 11.4.2008
passed in Second Appeals No.254/04,
255/04 and 256/04 for A.Y. 2001-02,
2002-03 and 2003-04 respectively, by
which the revenue's appeals have been
allowed and the order passed by the first
appeal authority, deleting the penalties
under Section 8-D(6) of the U.P. Trade
Tax Act, 1948 (hereinafter referred to as
the Act), has been reversed.

2. Undisputedly, facts of the case are
that
the
assessee
is
a
university
established under the Uttar Pradesh Evam
Prodyogik
Vishwavidalaya
Adhiniyam
2000 (U.P. Act No.19 of 2000). During
the assessment years in question, the
assessee
awarded
contracts,
for
construction of college and residence for
staff etc., to three contractors. It made
payments to them without making any
deduction of tax at source. This became
subject matter of penalty proceedings
under Section 8-D (6) of the Act.
According to the assessing officer, the
assessee was obliged to make deduction
of tax at source under Section 8-D (6) of
the Act. Since entire payments were made
without
necessary
deductions,
the
assessee was visited with penalty orders
for the three assessment years.

3. The amount of penalties apart, the
main issue raised by the assessee was that