Commissioner of Income Tax vs Satya Bhushan Gupta

The revenue is aggrieved by an order dated 28-9-2004 passed by the Income Tax Appellate Tribunal, Delhi Bench "C", New Delhi (''the Tribunal'') in ITA (SS) No. 50/Delhi/98 relevant for the block assessment years 1986-87 to 1996-97.

Admit.

After hearing learned Counsel for the parties, the following substantial question of law is framed for consideration:

Whether the Income Tax Appellate Tribunal was correct in law in coming to the conclusion that there was nothing on record to suggest that the assessee held 1,93,347 shares?

The above question has been framed in pursuance of the order dated 12-10-2007 whereby we had issued notice limited to the conclusions arrived at by the Tribunal in paras 25 to 27 of the impugned order dated 28-9-2004.

Filing of paper books is dispensed with.

Broadly the facts of the case are that a search and seizure operation was conducted at the residential premises of the assessee. Some dividend and interest warrant counter-foils were recovered during the course of search.

By the time the assessment proceedings commenced, the assessee had passed away and his legal representatives were unable to furnish details of 48 persons in respect of whom the dividend and interest warrant counter-foils were found in the premises of the assessee.

On the basis of dividend and interest warrant counter-foils, the Assessing Officer came to the conclusion that the assessee held 1,93,34,700 shares and that he was in physical possession of 83,332 shares while the remaining shares were sold at a premium.

The Tribunal noted the plea of the legal representatives of the assessee to the effect that there should be a reconciliation of the shares. It is possible that dividend and interest warrants were issued more than once a year and, therefore, the counter-foils found during the course of search would not give a true and correct picture in respect of the quantum of shares held.

We find that the Tribunal has accepted this contention of the legal representatives of the assessee and it has set aside the assessment order to this extent. It would have been appropriate for the Tribunal to have required the Assessing Officer to reconcile the dividend and interest warrants with the number of shares. The Tribunal ought not to have set aside the assessment without any such reconciliation.

It may be noted that even out of the 83,332 shares, the case of the legal representatives of the assessee was that 34,428 shares belong to the children of the assessee and 17,744 belong to the assessee. It is only the remaining shares that were in the names of 48 third parties.

In any event, it is not possible for us to go into the factual aspect of this matter and we are of the opinion that the order of the Tribunal should be set aside to that extent and the matter be remitted to the file of the Assessing Officer to reconcile the particulars of dividend and interest warrants with the number of shares. No other issue is required to be decided by the Assessing Officer.

The substantial question of law is answered in the negative in favour of the revenue and against the assessee.

The appeal stands disposed of.