COMMISSIONER OF INCOME TAX Vs. SANT LAL

JUDGEMENT

(1.) The present appeal under Section 260 A of the Income Tax Act, 1961 (hereinafter referred as "the Act") is directed against the order dated 15th June, 2017 passed by Income Tax Appellate Tax (ITAT) in ITA No. 4730/Del/2009 relating to the assessment year (AY) 2002-03 whereby the appeal preferred by the Revenue against the order of the CIT (A), has been dismissed.

(2.) Briefly stated, the case of the Revenue is that Respondent filed his income return (ITR) for AY 2002-03 declaring an income of Rs.2,91,670/- comprising of income from salary from M/s Jagat Agro Commodities (P) Ltd., income from House Property and Capital Gains. On 15th December, 2004, a search and seizure operation under Section 132 of the Act was conducted in the case of Sh. Brij Mohan Gupta. During the course of search, various incriminating documents/diaries/loose papers were found and seized. During post search proceedings, statements on oath were recorded of Sh. B.M.Gupta, his son Sh. Rajeev Gupta and accountant Sh. Ram Avtar Singhal. The search operation revealed that Sh. B. M. Gupta was allegedly engaged in "hundi" business at the relevant time, wherein previously undisclosed money/cash was arranged from various parties including the respondent, and the same was advanced to different parties for undisclosed interest income on the said advanced amounts. Sh. B. M. Gupta and his Group acted as mediator/broker in such clandestine financial transactions and charged commission/brokerage for arranging the same.

(3.) The various loose papers/diaries found and seized, contained details of the various parties on behalf of whom the said Group carried out the "hundi" business. The entries found in these documents were coded entries and had been recorded by one Sh. Ram Avtar Singhal, the accountant of the said group. Sh. Singhal decoded and confirmed the said entries by giving the correct details of the said transactions and the parties involved.