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CHEQUE BOUNS CASE

Relying on the decision of the Supreme Court in Income Tax Officer vs. Atchaiah[1], the learned Counsel for the appellant contends that having brought to tax the income in the hands of the appellant, which was properly received by his wife from Sri Chaitanya Educational Institutions and in the context where his wife was already assessed to tax and had paid tax deductible at source and incurred expenditure therefor, the assessment of the income of his wife should have been reopened and given benefit of the income attributed to the assessee and as this was not done, the order of the Income Tax Appellate Tribunal is incorrect and cannot be sustained.

THE HON’BLE SRI JUSTICE GODA RAGHURAM

Income Tax Sappy

Income Tax Sappy (Photo credit: Wikipedia)

AND

THE HON’BLE SRI JUSTICE B.N.RAO NALLA

 

I.T.T.A.No. 313 of 2011.

 

ORDER: (Per Goda Raghuram, J)

 

            This appeal under Section 260-A of the Income Tax Act is directed against the order of the Income Tax Appellate Tribunal, Hyderabad “A” Bench dt. 2.1.1.2011 rejecting the appeal of the appellant herein.

The respondent by an order dt. 28.12.2004 under Section 143(3) r/w Section 158 BC of the Income Tax Act (for short ‘the Act’) had determined the tax liability at Rs. 14,73,660/- for the block period comprising the assessment years 1997-98 to 2002-03 (upto 2.7.2002) as against ‘nil’ undisclosed income admitted in the block returns filed on 30.4.2004.  The primary assessment order was passed after search and seizure operations were conducted at Sri Chaitanya Educational Institutions and related persons on 2.7.2002 including the residential premises of lecturers of the institute, under Section 132 of the Act.  During the course of search and seizure operations evidence was found with regard to payment of salaries to lecturers in cash by the committee, outside the books of account.  The search also revealed that the amount received by the lecturers was not offered for taxation. The appellant herein who is working as an Assistant Engineer in the State Government is found to received cash from Sri Chaitanya Educational Institutions.

Consequent on the search, notice under Section 158 BC was issued on 1.3.2004 requiring the appellant to file returns.  The appellant filed block returns on 30.4.2004 admitting ‘nil’ undisclosed income.  The Assessing Authority however found that the claim of the appellant that his wife had entered into an agreement with Sri.Chaintanya Educational Institutions for conducting classes for intermediate students was misconceived as she studied only upto 10th class and she was not qualified to work as a lecturer nor had any skills to conduct teaching classes.  The Assessing Authority found that it was the appellant who actually is working as a Maths Lecturer and is getting cash receipts from the institution and is qualified for imparting education and accordingly the remuneration found to have been received by him was brought to tax.

Aggrieved thereby, the appellant preferred an appeal to the Commissioner of Income Tax (Appeals).  Concurring with the primary assessment order and recording reasons for the same, by the order dt. 28.12.2004 the appeal was dismissed.  Thereagainst the further appeal to the Income Tax Appellate Tribunal was also dismissed by the impugned order.

  Relying on the decision of the Supreme Court in Income Tax Officer vs. Atchaiah[1], the learned Counsel for the appellant contends that having brought to tax the income in the hands of the appellant, which was properly received by his wife from Sri Chaitanya Educational Institutions and in the context where his wife was already assessed to tax and had paid tax deductible at source and incurred expenditure therefor, the assessment of the income of his wife should have been reopened and given benefit of the income attributed to the assessee and as this was not done, the order of the Income Tax Appellate Tribunal is incorrect and cannot be sustained.

The above contention is stated to be rejected.  If the appellant’s wife has any grievance on the final assessment of the income that had been declared and tax was paid thereon, which was in the hands of the appellant, it is for the wife of the appellant who is an independent assessee to make a grievance and not the appellant.

On the aforesaid reasons, the appeal is misconceived.  No substantial question of law arises for consideration.  Accordingly, the appeal is dismissed.  There shall be no order as to costs.

 

______________________

GODA RAGHURAM ,J

 

 

 

_______________________

B.N.RAO NALLA, J

20.09.2011.

KRB.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE HON’BLE SRI JUSTICE GODA RAGHURAM

AND

THE HON’BLE SRI JUSTICE B.N.RAO NALLA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I.T.T.A.No. 313 of 2011.

 

ORDER: (Per Goda Raghuram, J)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DT. 20.09.2011.

 

 


[1] (1996)1 SCC 417

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