Commissioner Of Income Tax, Udaipur v. Mahesh Kumar

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANAT JODHPUR J U D G M E N T INCOME TAX APPEAL NO.70/2010 COMMISSIONER OF INCOME TAX, UDAIPUR Vs. MAHESH KUMAR Date of Judgment : 27.9.2010 HON'BLE MR. JUSTICE A.M. SAPREHON'BLE MR. JUSTICE DINESH MAHESHWARI Mr. K.K. Bissa, for the appellant. BY THE COURT : (PER HON'BLE SAPRE,J.) This is an intra court appeal filed by the Income TaxDepartment under Section 260-A of the Income Tax Act against anorder dated 9.4.2009 passed by I.T.A.T., Jodhpur Bench, Jodhpur (forshort called Tribunal) in I.T.A. No.331/JU/2006 for the period AY2001-2002. 2.By the impugned order, the Tribunal allowed the assessee'sappeal in part and reversed the order of Commissioner of Appeals onthe issue raised in this appeal. 3.So the question that arises for consideration in this intra courtappeal is whether it involves any substantial question of law withinthe meaning of Section 260-A ibid? 4.Having heard the learned counsel for the appellant andon perusal of record of the case, we are inclined to dismiss the appeal in limine as in our opinion the appeal does not involve any substantialquestion of law as is required to be made out within the meaning ofSection 260-A ibid. 5.The issue relates to certain additions made by the A.O. inthe course of assessment proceedings initiated against the assesseeunder the Act. The A.O. did not accept the explanation offered byassessee and treating the said amount to be that of assessee added inhis total income. The CIT (Appeal) upheld it but the Tribunal setaside the order of A.O. and that of CIT (Appeal) in so far as it relatedto additions made by him (AO). In other words, the Tribunal acceptedthe factual explanation coupled with the evidence tendered byassessee in relation to the impugned additions made by A.O. and heldthat since the same have been properly explained and hence, they cannot be included while computing the total income of the assessee. 6.In substance, the issue involved in the appeal was inrelation to addition/deletion of Rs.15,45,000/- added by AO underSection 69 of the Act in the hands of assessee in the assessment yearunder consideration The AO did not find explanation offered byassessee to be plausible and accordingly added the amount treating itto be an income from unexplained source under Section 69A ibid. Itwas upheld by CIT (Appeal) but reversed by Tribunal in an appealfiled by the assessee when his appeal was allowed in part in so far asthe impugned additions is concerned. This is what Tribunal held byaccepting the explanation of assessee:- “While passing the assessment order,the Assessing Officer is having boththe statements recorded on 10.12.2003and 16.3.2004 of Shri Thimma Reddy,he has relied on the statement dated10.12.2003 only and completelyignoring the statement dated16.3.2004. On careful examination ofboth the statements, in the light ofanswers given by the said deponent “While passing the assessment order,the Assessing Officer is having boththe statements recorded on 10.12.2003and 16.3.2004 of Shri Thimma Reddy,he has relied on the statement dated10.12.2003 only and completelyignoring the statement dated16.3.2004. On careful examination ofboth the statements, in the light ofanswers given by the said deponent Thimma Reddy to the question put bythe representative of the assessee tohim, it is clear that the said ThimmaReddy is nothing but a novice as hecategorically gave answers to thequestions put by the assessee'representative while examined on16.3.2004 that he do not know whogave the statements and as to when thestatement has been recorded. Whilereplying to another question, heunequivocally said that he did notknow how much land was sold to theassessee and to another question putby ld. A.R of the assessee hecategorically stated that he was told tosign the statement and he had to signit. In the statement recorded on10.12.2003, though it was stated thatwhat was recorded has been statedwithout any fear or coercion or threatand it was translated to the deponentin Telugu by Shri N.C. Nandish andShri Jagdish, grandsons of thedeponent, but there is no suchverification nor signatures found inthe statement of the said two personswho alleged to have translated inTelugu to the deponent Shri ThimmaReddy. Whereas in statement dated16.3.2004, there is verification at theend of the statement to the effect thatthe statement was recorded in thepresenceofShritherefore,.Venkataswamy and Shri therefore,.Gajendra who explained the questionsin Telugu to the deponent, that is ShriThimma Reddy and they signed thesame. Therefore, the statement dated10.12.2003, that was heavily relied onby the departmental authoritieswill beno effect, moreso, when analyzed inthe light of statement given on16.3.2004 which is duly signed by thetranslators, which was not at allproperly appreciatedby the departmental authorities. However, ifthe statement of said Shri ThimmaReddy given on 10.12.2003 wasappraised in the light of statementgiven on 16.3.2004, it is clear that thesaid Thimma Reddy is a novice andnot a reliable one. Even though thereare as many as 7 executants as per saledeed dated 10.4.2000 under which theassessee has purchased plot atBangalore, the department is satisfiedwith the statement of Thimma Reddywho is aged more than 70 years andknowing only vernacular language andnot even properly sign his name. Theyhave not chosen to examine the otherremaining executants to cull out realnature of the transaction under thesaid sale deed. In the absence ofstatements of other executants of thesale deed, the statement given by ShriThimma Reddy on 10.12.2003 will notstand moreso in the light of hisanswers given to the questions putforth by ld. A.R on his examinationon16.3.2004. In a way, to put in a nutshell the department is basing on anunreliable statement. The authoritiesrelied on by the ld. A.R before theTribunal rendered in the followingcases: 1.CIT Vs. P.Kalyanasundaram 128ITR 259[Mad]ITR 259[Mad] 2.Usha Kant N Patel Vs. CIT 282 ITR 553 [Guj] 3.Ishwarya K. Rai Vs, DCIT 104 ITD166 [Mum] are also supporting this proposition.Therefore, it is found that in ourconsidered view the addition ofRs.15,45,000/- made u/s 69 of the I.T.Act in the hands of the assessee madeby the departmental authorities is onlyundersurmisesandonmisappreciation of evidence madeavailable on record. Hence the same is hereby directed to be deleted byallowing the issue raised by theassessee. ” 1.CIT Vs. P.Kalyanasundaram 128ITR 259[Mad]ITR 259[Mad] 2.Usha Kant N Patel Vs. CIT 282 ITR 553 [Guj] 3.Ishwarya K. Rai Vs, DCIT 104 ITD166 [Mum] are also supporting this proposition.Therefore, it is found that in ourconsidered view the addition ofRs.15,45,000/- made u/s 69 of the I.T.Act in the hands of the assessee madeby the departmental authorities is onlyundersurmisesandonmisappreciation of evidence madeavailable on record. Hence the same is hereby directed to be deleted byallowing the issue raised by theassessee. ” 7.Learned counsel for the appellant (Revenue) contendedthat firstly Tribunal erred in accepting the explanation offered byAssessee in relation to source of income. His second submission wasthat what was offered by the Assessee was no explanation at all andhence it should not have been accepted. His third submission was topersuade us through factual scenario of the explanation to contendthat it can never be taken as satisfactory explanation for deleting theaddition made by Assessing Officer and in last, he contended thatwhen there were two statements made by assessee on the explanationrelating to the impugned additions in proceedings before A.O. i.e. theone on 10.12.2003 and other on 16.3.2004, then the Tribunal shouldhave relied on the one which supported the Revenue. We do notagree to any of these submissions for more than one reason. 8.In the first place, what is involved in the case is a purequestion of fact and not any question of law much less substantialquestion of law. Secondly, this Court cannot again in this appealundertake the examination of factual issues nor can draw factualinferences on the basis of explanation offered by assessee. Thirdly,once the explanation is accepted by an appellate court (Tribunal inthis case), then in such event, a finding recorded on such explanationis binding on the High Court. 9.Perusal of the impugned finding quoted supra would goto show that Tribunal did examine the explanation offered byassessee in detail and then recorded a finding for its acceptance. Suchfinding when challenged does not constitute a substantial question oflaw within the meaning of Section 260A ibid in an appeal arising outof such order. 10.In our opinion, therefore, once the Tribunal accepted theexplanation of assessee and accordingly, deleted certain additions made by A.O. then it would not involve any substantial issue of lawas such. In other words, this Court in its appellate jurisdiction underSection 260-A ibid, would not again denovo hold yet another factualinquiry with a view to find out as to whether explanation offered byassessee and which found acceptance to the Tribunal is good or bad,or whether it was rightly accepted, or not. It is only when the factualfinding recorded had been entirely dehors the subject, or that it hadbeen based on no reasoning, or based on absurd reasoning to theextent that no prudent man of average judicial capacity could everreach to such conclusion, or that it had been found against anyprovision of law, then a case for formulation of substantial questionof law on such finding can be said to have been made out. 11.In our view, no such error could be noticed by us in theimpugned order because as observed supra, the Tribunal did go intothe details of explanation offered by assessee and then accepted theexplanation. As a consequence thereof, the additions made byAssessing Officer came to be deleted. 11.In our view, no such error could be noticed by us in theimpugned order because as observed supra, the Tribunal did go intothe details of explanation offered by assessee and then accepted theexplanation. As a consequence thereof, the additions made byAssessing Officer came to be deleted. 12.Coming to the last submission of learned counsel for theappellant as to which out of two statements should have been reliedon, we find no merit in the same because even this issue was rightlydealt with and appreciated by the Tribunal in para quoted above. Inour view it does not involve any substantial question of law because itis only a matter relating to explaining the source of income by theassessee and nothing else. It was for the Tribunal which is the lastCourt on facts to appreciate the explanations offered by the assesseeand then record the finding on such facts. It was done. It is end ofthe issue so far as facts are concerned. 12.We thus, do not find any merit in the appeal. It fails andis dismissed in limineby holding that it does not involve anysubstantial question of law. No costs. [Dinesh Maheshwari ], J. [A.M. Sapre],J./Anil/