2008 (5) TMI 237 - HC - Income Tax

Appeal dismissed, Tribunal decision affirmed on disputed document & jewellery acquisition explanation. Closure of business cited.

COMMISSIONER OF INCOME-TAX Versus MOHINDER LAL HARYANI

The High Court dismissed the appeal, affirming the Tribunal's decision on the disputed document recovered during a search operation and the Assessee's ... Block assessment - search – documents recovered showing certain payments made by assessee to M and some jewellery found – dismissing the appeal of revenue, held that there was no doubt that M was closed down several years ago and the documents could not e attributed to the block period – Tribunal rightly accepted the fact that assessee received gifts from friends and relatives - no substantial question of law arises for consideration Issues:1. Disputed document recovered during search operation2. Explanation regarding jewellery acquisition and gifts3. Acceptance of explanations by Assessing Officer and Commissioner of Income Tax (Appeals)4. Tribunal's consideration of closure of M/s. Mulberry Silk Affairs5. Lack of comments by Assessing Officer on the document6. Attribution of document to the block period under consideration7. Tribunal's acceptance of jewellery explanation8. Existence of substantial question of lawAnalysis:The case involves a dispute arising from a search and seizure operation conducted on the premises of the Assessee, revealing a document indicating payments to M/s Mulberry Silk Affairs and the presence of jewellery. The Assessee denied knowledge of the document and explained the jewellery acquisition as gifts received over the years. The Assessing Officer and Commissioner of Income Tax (Appeals) had differing views on the explanations provided.The Tribunal considered the closure of M/s. Mulberry Silk Affairs several years ago, which was undisputed, and the lack of comments by the Assessing Officer on the document. The document did not specify any particular year, leading to a question of its attribution to the relevant block period. The Tribunal acknowledged the Assessee's explanation regarding the jewellery, including gifts received during marriage and over the years, finding it reasonable and not perverse.Ultimately, the High Court found merit in the Assessee's arguments, noting the closure of M/s. Mulberry Silk Affairs and the lack of a substantial legal question for consideration. Consequently, the appeal was dismissed, affirming the Tribunal's decision on the disputed document and jewellery explanation.