TaxTMI 
TaxTMI 
2017 (6) TMI 523
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....ome loose papers, note books, currency notes, etc. were found. The Department gave notice to the petitioner under Section 158BD of Income Tax Act, 1961 (for short "the Act of 1961"). The reply to the notice was given followed by submission of income tax return with NIL amount. The petitioner could reveal that Mr.Rajkumar Sharma has approached Income Tax Settlement Commission and his petition has been admitted. To avoid litigation and to have peace in mind, the petitioner also submitted an application before the Commission on 12th November, 1999 offering undisclosed income of Rs. 5 lac with intimation to the Assessing Officer. The petitioner denied investment of Rs. 3,36,50,000/- by way of money lending to earn interest. The Settlement Commission computed undisclosed income to be of Rs. 17 lac after considering Rule 9 Report. The petitioner accepted the aforesaid, however, it was quashed by the High Court with remand of case on a writ petition filed by the Revenue. Learned counsel has explained the facts of the case also. It is submitted that the petitioner was having business relations with Mr.Raj Kumar Sharma, who was getting cut emeralds and sending it to the petitioner on app....
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....arged. A reference of judgments of the Apex Court in the cases of CIT Vs. SMS Investment Corpn Ltd. reported in (1994) 207-ITR-364 (Raj.), 173-ITR-393 (Raj.), Jayanti Lal Patel Vs. ACIT reported in (1998) 233-ITR-588 (Raj.), CIT Vs. Jayanti Lal Patel and others reported in 144-CTR- 305, Kishanchand Chellaram Vs. CIT reported in (1980) 125- ITR-713 and Roshan-Di-Hatti Vs. CIT reported in (1977) 107-ITR-938 has been given. It is submitted that the order of the Settlement Commission is otherwise based on presumptions. It is presumed that emeralds cannot be given on approval by recording on currency notes but can be on a plain paper. It has been referred in para No. 12.12 of the impugned order and later on, in para Nos.15.1, 15.9 and so on. The Commission has recorded perverse finding. The Revenue failed to establish that it is not a case of sending emeralds on "Jakad" i.e. on approval basis but a case of money lending. The burden under Section 69 of the Act of 1961 has not been discharged by the revenue apart from the fact that no independent verification was made from the person noted in Rule 9 Report. The unexplained asset or investment was not noticed apart from the fact t....
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....ase thus impugned order is opposed to the object of Section 245C of the Act of 1961. The prayer is accordingly to set aside the order. A reference of judgments in the case of CIT Vs. Ravi Kumar (2007) 294-ITR-78 (P&H), CIT Vs.SC Sethi (2007) 295-ITR-351(Raj) and CIT Vs.Girish Chaudhary (2008) 296- ITR-619 (Delhi) has been given. Learned counsel for the respondents has opposed the petition. A preliminary objection about maintainability of the writ petition has been raised. It is in reference to Section 245-I of the Act of 1961. The order of the Settlement Commission is not subject to challenge by way of appeal or review thus writ is not maintainable. Coming to the facts, it is stated that a search was conducted at the place of Mr.Rajkumar Sharma where loose papers, note books, currency notes, etc. were seized. On examination of seized documents, the Department found various transactions with the petitioner. The currency notes were used with coded figure. On the currency notes, name of the petitioner was existing apart from other parties with a date on it. A notice under Section 158BD of the Act of 1961 was accordingly issued for the block period 01st April, 1987 to 12th Nov....
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....or which dates of advance and repayment are available. The advances for which no dates are available are held to be not paid back till date of search. The calculation was made accordingly. The total of the same stands at Rs. 66,23,21,229. Learned counsel further submitted that Mr.Raj Kumar Sharma and Mr.PC Dhadda were having close business dealings. Both of them adopted very rigid attitude. The grounds raised in the writ petition are otherwise factual in nature and interference in the order of Settlement Commission should not be made in view of the judgment of the Apex Court in the case of Union of India & Ors. Vs. IND. Swift Laboratories Ltd. reported in 2011(4) SCC 635. The prayer is accordingly made to dismiss the writ petition. I have considered rival submissions made by learned counsel for the parties and scanned the matter carefully. The facts of the case have been given in detail thus need not to be reiterated other than which are relevant for consideration of the issues raised by learned counsel for the parties. On a search conducted at the place of Mr.Raj Kumar Sharma, loose papers, note books and currency notes, etc. were seized. The material was containing na....
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....s to whether it is a case of money lending or sending emeralds on approval. When the seized material itself is sufficient to establish the case apart from Rule 9 Report, no further evidence was required thus burden under Section 132(4A) as well as Section 69 of the Act of 1961 stands satisfied. It is also a fact that while denying money lending business, the petitioner had decoded the figure on the documents with help of Chartered Accountant and submitted that total amount involved in the money lending is Rs. 9,71,400/- with peak amount of Rs. 4,61,000/-. This itself proves that it is a case of money lending. Taking into consideration the fact aforesaid, finding of the Settlement Commission needs no interference on the issue aforesaid. It has been recorded after minute examination of material where the Revenue could prove its case and, thereby, discharged the burden. The finding of Settlement Commission that seized material proves money lending needs no interference. It is moreso when the finding of fact recorded by the Settlement Commission cannot be interfered by this Court. The view aforesaid is supported by the judgment of the Apex Court in the case of Union of India & Ors. ....
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....y lending business have been written in code. For example, on page no 43 exhibit A-4, account of Bela Bansal shows figure of 15 written in code. Two currency notes of Rs. 10 and Rs. 5= Rs. 15 are attached and on both these currency notes and account paper, the date of lending is written as 12-10-96. Further there is a minus entry of 2.50 out of 15 leaving a balance of 12.50. On this page, bi monthly dates have been written as under:- 12-02-1996, 10-12-1996, 08-02-1997, 08- 04-1997, 06-06-1997, 04-08-1997, 02-10- 1997 11.9 It has been also written on this page that from 4-8 to 28-8=24 days, "Interest to be seen". This noting shows working of interest for the month of August 97. All these facts mentioned above indicate that the figure of 15 represent Rs. 15 Lakhs, which was initially lent on 12-10-96 and periodical interest has been charged bimonthly. Thus, the currency notes of Rs. 10 stands for Rs. 10 lakhs and currency note of Rs. 5 stands for Rs. 5 lakhs. This fact is further confirmed from the noting mentioned regarding repayment of Rs. 2.50 lakhs leaving a balance of Rs. 12.50 lakhs." The second issue is as to whether code of one should have been taken equa....