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Petitioner: JAYANTI LAL PATEL and another VS Respondent: ASSISTANT COMMISSIONER OF INCOME- JUDGMENT
Court Name: Rajasthan High Court Judge(s): Y. K. Meena Title:JAYANTI LAL PATEL and another vs ASSISTANT COMMISSIONER OF INCOME-
JUDGMENT
Reported As: 2000 PTD 1132 Result: Order accordingly Judgment JUDGMENT These two writ petitioners are directed, one against the show-cause dated June 6, 1994, and another against the assessm ent orders, dated 22, 1996, and March 27, 1996, Annexures IX-A to IX-F. In Writ Petition No. 3494 of 1994, the petitioner has prayed that notice be quashed and the respondent is be directed to return the FDRs to the petitioner and in Writ Petition No 2879 of 1997, the petitioner has prayed that the aforesaid assessment orders be set aside. Since the issue of ownership of FDRs is common in both the writ petitions, therefore, both the writ petitions are being disposed of by this common order The search and seizure operation was carried out by the officials and the Income-tax Department, on September 17/18, 1992, at the residence of Dr. Tomar. The team of a raid party was headed by the DDI, Shri Dilip Shivpuri. In that search operation, Jewellery of 12 tola gold and R-,.7,164 in cash were found. In addition to jewellery of ladies of family and cash amount of Rs.7,164, 3 FDRS t-- the name of one Shri jaywtti LaI Patel were also found during the search. The petitioner explained that these FDRs are of Shri Jayanti Lal Patel, a friend of Dr. Tomar. When that search resulted in failure, one F.I.R. No. 124 of 1992 has teen lodged on September 23, 1992, against Dr. Tomar for the offencxs punishable under sections 6(1)(e) and 13(2) of the Prevention of Corruption Act, 1988. In the T.I.R., the allegation against Dr. Tomar was that he possessed- assets disproportionate to his income. The assets consist of a plot and a house raised thereon, Dr. Tomar challenged that F.I.R. And prayed that F.I.R. No. 124 of 1992 be quashed. The submission of Dr. Tomar before the High Court was that Shri Dilip Shivpuri, being a cousin of Dr. Deepak Shivpuri, who happened to be a colleague and rival in the profession, Shri Dilip Shivpuri has malafidely acted and arranged the first income-tax raid.
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Then' in connivance with his friend, Shri Rohit Mahajan, who was the then. Additional S. P. (RSIB), Jaipur City, an F.I.R. Has been lodged- against Dr. Tomar. The High Court `has allowed the petition of Dr. Tomar filed under section 482 of the Criminal Procedure Code, quashed the F.I.R. And passed strictures against Shri Dilip Shivpuri, the then DDI in the Income-tax Department. After the search by the Income-tax Department and material available on record, order under section 132(5) of the Income Tax Act, 1961 (hereinafter referred as the "Act"), has been passed and therein the view has been taken that Shri Jayanti Lal Patel- is a owner of these 3 FDRs and not Dr. Tomar. Therefore, it was ordered that those FDRs be released. Thereafter, the Commissioner has issued show-cause notice to Dr. Tomar that why the amount of three FDRs-Rs.11,03,811 should not be added in the income of Dr. Tomar. In the notice, it is also stated that valuation report obtained by he ACD, Rajasthan from the PWD valuing the investment of the house to the tune of Rs.40,44,329 should not be taken for addition in the income of Dr. Tomar. Similarly, the valuation of the plot has been enhanced. In the notice, some investments are also referred to. According to the Commissioner of Income-tax--, they should also be scrutinised by the officer before passing the order under section 132(5) of the Act and finally, it is stated that in view of these facts, why appropriate directions should not be given for modification/cancellation/amendment in the order passed under section 132(5) of the Act. The notice has been challenged on the ground that when the income tax raid resulted in failure, as well as the F.I.R. Which has been lodged at the instance of the Additional S. P. Is quashed by this Court, Shri Dilip Shivpuri has managed to issued notice under section 263 of the Act in spite of the fact that some strictures were passed while -quashing the F.I.R. And observing that no reliance can be placed on the valuation report of the PWD as against the value estimated by the valuer of the Income-tax Department and that the order of the High Court has been upheld by the apex Court. In spite of that, in the notice under section 263, the Commissioner has placed reliance on the valuation report which is found baseless by this Court in its order, dated October 15, 1993. When the proceedings under section 263 were stayed on June 23, 1994, in spite of that making base the facts given in the notice under section 263, six assessment orders are passed, i.e., Annexures IX-A. To IX-F, dated March 22, 1996, and .March 27, 1996. A contempt petition has also been filed by Shri-Jayanti Lal Patel that in spite of stay of proceedings under section 263 of the Act, the aforesaid assessment orders have been passed. Mr. Jain, learned counsel for the Department, has submitted that 'regular assessment orders under section 143(3) have been passed after summary order under section 132(5) of the Act and these assessm ent orders are not passed in pursuance of a notice under section 263 of the Act. At present I am not concerned- with the fact whether the aforesaid six assessment orders are passed in pursuance of the order under section 132(5) or in pursuance of the notice under section 263 of the Act. In these petitions, I am basically concerned whether the additions made are baseless or there is any justification to assess the income as referred to in these six assessment orders. These are the main additions, in all the six assessment orders though the loans taken in the different years are also added as income from unexplained sources, in spite of the fact that the assessee, Dr. Tomar and Dr. Mrs. Tomar and B. S. Tomar Hindu Undivided Family, have filed the affidavits of the money lenders and even in some cases, the suit has been filed in the civil Court for recovery of the amount and the Court has passed a decree against Dr. Tomar for recovery of a loan. The genuineness of the loans are disbelieved and that amount added in the income of Dr. Tomar in different years. The submission of learned counsel for Dr. Tomar is that the departmental officers are biased while passing the aforesaid assessm ent orders. The Assessing Officer had demanded money. Even some allegations are levelled against the then Commissioner, Shri Kanwar Jeet Singh. Complaints have been made to the Chairman of Central Board of Direct Taxes on December 7, 1993, and March 20,
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1995, regarding harassm ent and demand of money. In spite of that, these baseless additions are made in the income of Dr. Tomar and his wife. Dr.Mrs. Shobha Tomar, and B. S. Tomar Hindu undivided family. Mr. Kasliwal brought to my notice that while making additions on the basis of valuation report of the PWD, the Assessing Officer totally ignored the valuation report given by the departmental valuer to whom the case of valuation of the house has been referred, as well as, valuation given by the approved valuer of the Department. The valuation report on which reliance has been placed has been considered by this Court while the F.I.R. Lodged against Dr. Tomar was challenged and that was found baseless. The F.I.R. Was quashed and that order of this Court has been upheld by the apex Court. On such valuation report, again the additions to the tune of about Rs.14 lakhs have been made and the source of Rs.26 lakhs, shown as investment in house, has also been treated as income from unexplained sources. Similarly, after the raid, enquiry has been made by the Assistant Commissioner of Income-tax before order under section 132(5), the statement of the seller of the plot and the agent through whom the plot was purchased have been recorded. They accepted that they have received only the money shown by the petitioner, Dr. Tomar and Dr. Mrs. Tomar and Tomar Hindu undivided family, but ignoring all this in these assessment, reliance has been placed on a small chit claimed to be found at the time of the search. . Even the figures shown in that chit are not tallied with the accounts maintained by the seller and the agent through whom the Plot B- 4, Govind Marg Jaipur has been purchased. Neither that chit is in the handwriting of Dr. Tomar nor in the hand writing of any member of his family. In spite of that, the addition to the tune of Rs.22 lakhs has been made, only on the basis of that small piece of paper. Learned counsel for the Department, Mr. Jain, has fairly admitted that on the merits, he hits no case for such additions He only submitted that when alternate remedy is there, the petitioner should avail of that and even he filed the appeal but it was later on withdrawn. Considering the submissions of learned counsel for the parties and the aforesaid acts, the main grievance of the petitioner is that whatever investment has been shown in the plot, as well as in the construction of the house is explained but due-to mala fide attitude of the Assessing Officer, that has not been accepted. Not only that, the valuation of the plot, as well as the house has been just made double. The entire investment shown has been treated as income of Dr. Tomar which has no justification. Even where the petitioner sold two plots for Rs.1.71,000, they have treated Rs.1,71,000 as the value of one plot and just made it double, i.e., Rs.3,42,000 and no benefit of section 54F of the Act has been given. When the appeals have been filed, they have taken one of the grounds in the appeals that the decision in the appeals will be subject to the decision of this Court in the writ petition. That shows that the assessee had no faith in the officials after suffering lot in the hands of biased officials in the Department. When no effective, adequate and efficacious remedy is availed from the authority, there is no bar in entertaining the writ petition under Article 226 of the Constitution of India and his petition should be decided on the merits. Considering the submissions and instead of going into the assessment year wise of Dr. Tomar, Dr. Mrs. Tomar and B. S. Tomar Hindu undivided family, I prefer to deal with the major items, i.e., the investment made in the plot and construction of house and also the additions made on the basis of the valuation report of the PWD and additions made on the basis of a small chit claimed to have been found by the search party, for investment in the purchase of plot B-4, Govind Marg, Jaipur. Whether the amount of sale proceeds of the two plots shown by the assessee can be added twice treating that amount of one plot instead of two plots. Similarly, the assessment for the assessment year 1984-85 made about 13 years back, when the amnesty scheme was in force, can that
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assessm ent be reopened? And the additions can be made in the assessment year without any positive finding that income shown by Dr. Tomar is not correct? And income of Dr. Mrs: Tomar is income of Dr. Tomar. No additions can be made in respect of the assets which are declared and assessed under amnesty scheme, in the assessment year 1984-85. First I will take the addition on the basis of the valuation of the house. Dr. Tomar, Dr. Mrs. Tomar and B. S. Tomar Hindu undivided family, purchased a Plot No. B-4, Govind Marg, Jaipur, and raised construction. All the three assessee have equal share and investment in the plot, as well as in the construction of a house. The total investment in the construction of the house roughly comes to about Rs.25 lakhs. After search at the residence of Dr. Tomar, the matter was referred to the Valuation Cell of the Income-tax Department for estimation of the cost of the house raised by Dr. Tomar, Dr. Mrs. Tomar and B. S. Tomar Hindu undivided family. The departmental valuer, in his report, estimated the cost of the house to the tune of Rs.26,29,000. These assessee have also obtained a report from the approved valuer of the Department and he valued the construction cost to the tune of Rs.24 lakhs. When the valuer of the PWD estimated the cost of the house to the tune of Rs.32,35,465 and for the difference for the period from the date of issuing the standing order of the Department to the date of valuation according to him, 25 per cent can be added in the value already assessed and that total value comes to Rs.40,44,329. On the basis of this valuation report which is obtained by the Additional S. P. To fabricate a false case, from the PWD an F. I. R. No. 124 of 1992 had been lodged against Dr. Tomar for the offences under section 13(1)(e) and 132) of the Prevention of Corruption Act, 198$. That F.I.R. Has been challenged in this Court and this Court has quashed the F.I.R. Which is mainly based on the valuation report of the PWD which estimated the cost of the house at more than Rs.40 lakhs. While quashing the F.I.R., this Court has passed strictures against the then DDI, Shri Dilip Shivpuri and Shri Rohit Mahajan. The then Additional S. P. (RSIB), Jaipur City. The relevant portion of the judgment reads as under: "From the material placed on record, it stands proved that Shri Dilip Shivpuri being cousin of Dr. Deepak Shivpuri (who, in the circumstances spelt out, from the petition, after his machination to get himself posted as Assistant Professor in Paediatrics for which Dr. B. S. Tomar was to be posted after his return from London. Having failed, had been nursing rancour against Dr. Tomar), and being Deputy Director (Investigation), Income-tax, had made firstly raid at the house of the petitioners, and when he failed in his machination in the raid which ended in a whimper after anatomising income-tax returns and assessment orders of the petitioners and family members, he approached his college mate, Shri Rohit Mahajan who admittedly has been Additional S. P. (RSIB), Jaipur City 1, on or after September 17, 1992, and informed Shri V. K. Thanvi, the then Director- General of Police, RSIB, Jaipur, complaining of the property and assets of the petitioners, and in this manner, Shri Dilip Shivpuri was the complainant bearing rancour against the petitioners as a result of rivalry in between his cousin, Dr. Deepak Shivpuri, and Dr. Tomar. Thus, it cannot be denied that Shri Dilip Shivpuri, Deputy Director (Investigation), Income-tax, is the first informant and complainant: that, he failed in hismachination to get a case registered for an offence punishable under the provisions of the Income-tax Act in the income-tax raid supervised, stage-managed by him, against the petitioners, which ended in a whimper obviously after having found no case made out, and that since he failed in his, intrigue, so, in order to save their faces and conceal lapses, he informed other administrative authority. i.e., the present investigating authority which has been pursued for their own purpose and wreak rancour which arose also out of their failure in intrigue. The dominant purpose, as I wrung out from the aforesaid facts and circumstances pointed out in regard to the mala fide exercise of power, (supra), to register the F.I.R. And investigation thereon after being pursued by Shri Dilip Shivpuri is unlawful and to make the character assessination of the petitioners and family member. Thus, viewed, registration of the impugned F.I.R. And intended
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follow-up action is manifestly attended with mala fides, with an ulterior motive for wreaking vengeance on the petitioners and with a view to spite them due to private and personal grudge " The order of this Court, dated October 15, 1993, has been challenged in the apex Court. The apex Court has upheld the order of this Court, dated October 15, 1993, meaning thereby, that the mala fides found on the part of the departmental official, as well as Additional S. P., Shri Rohit Mahajan, stand. Even the complaint has been made by Dr. Tomar to the Chairman, Central Bold of Direct Taxes against Shri Dilip Shivpuri, the then DDI that the being cousin of Dr. Deepak Shivpuri has managed this income-tax raid and also instigated Additional S. P., Shri Rohit Mahajan. To lodge F.I.R. Against Dr. Tomar and ultimately, this Court in its order dated October 15, 1993, observed that the source of income stands fully disclosed in the income-tax or wealth tax returns spanning over last more than ten years and the F.I.R. Lodged was so absurd and inherently improbable, inasmuch as the allegations made in the F.I.R. Even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence against Dr. Tomar and that F.I.R. No. 124 of 1992 registered at P. S. Rajasthan State Investigation Bureau, Jaipur, has been quashed. It is an admitted fact that while assessing the value of the house, the Assessing Officer has totally ignored the valuation report of the departmental valuer who valued the construction at Rs.26,29,000 and also the report of the approved valuer of the Department who valued the construction cost of the house to the tune of Rs.24 lakhs. About Rs.25 laths has been declared by the assessee themselves and the Assessing Officer placed reliance only on the valuation report of the PWD, which is obtained by the Additional S. P. Within two days after the income-tax raid and lodged F.I.R. On the basis of that valuation report against Dr. Tomar. Learned counsel for the Department. Mr. Jain failed to show me any justification to make addition on the basis of such valuation report of the PWD, which is the base of the F.I.R. And the F.I.R. Has been quashed by this Court and the decision of this Court has been upheld by the apex Court. No other justification has been shown for addition of Rs.14,57,611 in the hands of Dr. B. S. Tomar for the assessm ent year 1993-94. On the facts stated above Mr. Jain failed to show me any justification for this addition, the addition as discussed above, should be deleted which has been made on account of valuation of the house based on the valuation report of the PWD which is not even a final report but a provisional report, on the basis of this report, the F.I.R. Has been lodged, which is quashed finally. The next item is addition of Rs.22,12,500 on the basis of some figures on a small piece of paper in respect of purchase of Plot No. B-4, Govind Marg, Jaipur. This Plot. B-4, Govind Marg, Jaipur, has been purchased Jointly by Dr. Tomar, Dr. Mrs. Tomai and B. S. Tomar Hindu undivided family. They equally shared the investment. This plot has been purchased through Sudershan Housing Corporation from Shri Bhagwan Sahai Ramjiwal. The case of the assessee is that they have purchased this plot for Rs.15,75,000 and before purchase, NOC has been obtained from the Income-- tax Department. They have also paid some commission to Sudershan Housing Corporation, an agent through which this plot has been purchased. The amount for the plot has been paid in different instalments, partly through Sudershan Housing Corporation and partly by cheques issued directly in the name of Shri Bhagwan Sahai Ramjiwal, owner of the plot. During search at the residence of Dr. Tomar, it is claimed that the Department official found a slip containing some figures. This piece of paper claimed to have been recovered at the time of search contains figures under two columns. In one column, the total of these figures comes to Rs.17,25,000 from May 31, 1989, to December 8, 1989, and in the other column, the total of these figures comes to Rs.22,12,500. This piece of paper is admittedly neither in the handwriting of Dr. Tomar nor in the handwriting of any member of his family nor is it in the handwriting of an agent through whom the property has been purchased, nor is it in the handwriting of Shri Bhagwan Sahai Ramjiwal, owner of the plot. The
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exact place of piece of paper has not been shown from which place this paper has been recovered. The statements of Shri Bhagwan Sahai Ramjiwal, as well as the proprietors of Sudershan Housing Corporation have been recorded. They denied that this piece of paper contains the payments made by Dr. Tomar'to Shri Bhagwan Sahai Ramjiwal. Even their accounts were seized, but the details given in this piece of paper do not tally with the accounts either of Sudershan Housing Corporation or the accounts of Shri Bhagwan Sahai Ramjiwal. If we compare the rate in that locality, Rs.500 per sq meter has been prescribed by the JDA for the year 1990 and the adjoining plots are sold at. The rate of Rs.1,205 per sq meter. Dr. Tomar, Dr. Mrs. Tomar and B. S. Tomar H.U.F. Have purchased this plot at the rate of Rs.1,458 per sq meter. In the year 1990, the Sub-Registrar, Jaipur City, has also fixed the rate in this locality of Rs.1,200 per sq. Meter. Mr. Jain was asked to explain and show the justification that whether in these circumstances Rs.22,12,500 can be added in the income of the assessee on the basis of a small slip of paper claimed to have been found at the time of search though that is not in the handwriting of Dr. Tomar. Ignoring all the detailed facts, how the addition of Rs.22,12,500 can be made in the income of Dr. Tomar for the assessm ent year 1991-92. Mr. Jain, learned counsel for the respondents, failed to give any justification for addition of Rs.22,12,500. In view of these undisputed facts, this addition of Rs.22,12,500 should be deleted. Now. I come to the additions made on account of not believing and doubting the genuineness of the amount received from N . K. Enterprises and Roopam Corporation. The case of the petitioner is that before construction of the house on Plot No. B-4, Govind Marg, Jaipur, B. S. Tomar H.U.F. Has sold 3600, sq. Feet underground portion of the house for Rs.9 lakhs to N. K. Enterprises. N. K. Enterprises has- paid Rs.35,000 as earnest money on signing of the agreement and the balance amount has been paid in instalments: Similarly, B. S. Tomar H.U.F. Again entered into agreement with Roopam Corporation, Naroda, Ahmedabad, and B. S, Tomar HUF has sold part of underground measuring about 3600 sq. Feet to Roopam Corporation for Rs.9,50,000 and Rs.50,000 received as earnest money from Roopam Corporation and balance amount has been paid in instalments. Under the agreement B. S. Tomar Hindu undivided family has received the sale proceeds from N. K. Enterprises as under: (Rs.) 28-3-1990 To Debit 35,000 10-4-1990 " Debit 80,000 20-4-1990 " Debit 60,000 4-5-1990 " Debit 60,000 20-5-1990 " Debit 90,000 16-7-1990 " Debit 30,000 25-8-1990 " Debit 1,55,000 12-11-1990 " Debit 50,000 8-1-1991 " Debit 66,000 25-1-1991 " Debit 75,000 10-3-1991 " Debit 66,000 7,41,000 And from Roopam Corporation, Dr. B. S. Tomar Hindu undivided family has received the sale proceeds as under: (Rs.) 13-5-1991 To Debit50,000 26-5-1991 "Debit 60,000
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23-6-1991 "Debit 1,50,000 3-7-1991 "Debit 1,40,000 15-9-1991 "Debit 1,00,000 24-9-1991 "Debit 1,25,000 9-10-1991 "Debit 1,00,000 16-10-1991 "Debit 1,00,000 8,25,000 To this effect, the agreement to sell has been reduced in writing with N. K. Enterprises, as well as Roopam Corporation. That was placed before the Assessing Officer when the order under section 132(5) has been passed. Similarly, these agreements were made available to the Assessing Officer, ignoring these agreements and without enquiry, he added whatever amount has been received from N. K. Enterprises and Roopam Corporation -treating as income of Dr. Tomar from undisclosed sources: In the subsequent assessm ent year, in case of B. S. Tomar Hindu undivided family, enquiries have been made through department officials in Ahmedabad. They enquired about the genuineness of transactions between N. K. Enterprises and B. S. Tomar Hindu undivided family and the transactions between Roopam Corporation and B. S. Tomar Hindu undivided family and after enquiry they found that N. K. Enterprises and Roopam Corporation both have capacity to pay the cash to B. C. Tomar Hindu undivided family, and on an enquiry, the officer of the Income-tax Department at Ahmedabad found that the amount has been paid by them, as per agreement of sale of part of the property from the share of B. S. Tomar Hindu undivided family in a house constructed at Plot No. B-4, Govind Marg, Jaipur. The Assistant Director of Income-tax (Investigation), Unit 4, Ahmedabad, has also sent the letter, dated between Roopam Corporation and B. S. Tomar Hindu undivided family and the transaction between N. K. Enterprises and B. S. Tomar Hindu undivided family. Considering this letter from the ADI (Investigation) written to the Assessing Officer, Jaipur, further strengthens the case of the petitioner that whatever amount B. S. Tomar Hindu undivided family has received on a sale of part of its property in the house situated at Plot No. B-4, Govind Marg, Jaipur, is genuine and no addition can be made either in the hands of Dr. Tomar individual, Dr. Mrs. Tomar individual or in the hands of B. S.…
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