Commissioner Of Income Tax, Udaipur v. M/S. Tirupati Microtech Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANAT JODHPUR J U D G M E N T INCOME TAX APPEAL NO.139/2010 COMMISSIONER OF INCOME TAX, UDAIPUR Vs. M/S. TIRUPATI MICROTECH PVT. LTD. Date of Judgment : 13.12.2010 HON'BLE MR. JUSTICE A.M. SAPREHON'BLE MR. JUSTICE C.M. TOTLA Mr. K.K. Bissa, for the appellant. BY THE COURT : (PER HON'BLE SAPRE,J.) The decision rendered in this appeal shall also governdisposal of other connected appeal being ITA No.19/2010 becauseboth the appeals arise out of one order relates to one assessee. 2.This is an appeal filed by the Income Tax Departmentunder Section 260-A of the Income Tax Act against an order dated13.10.2009 passed by I.T.A.T., Jodhpur Bench, Jodhpur (for shortcalled Tribunal) in I.T.A. No.264/JU/2009 for the period AY 2003-2004. 3.By the impugned order, the Tribunal dismissed the Revenue'sappeal and affirmed the order of Commissioner of Appeals on theissue raised in this appeal. 4.So the question that arises for consideration in this appeal iswhether it involves any substantial question of law within themeaning of Section 260-A ibid? 5.Having heard the learned counsel for the appellant andon perusal of record of the case, we are inclined to dismiss the appealin 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. 6.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) deleted it and the Tribunal upheldthe order of CIT (Appeal) and deleted the addition made by AO. Inother words, the IT (Appeal) and Tribunal accepted the factualexplanation coupled with the evidence tendered by assessee inrelation to the impugned additions made by A.O. and held that sincethe same have been properly explained and hence, they cannot beincluded while computing the total income of the assessee. 6.In substance, the issue involved in the appeal was inrelation to certain addition/deletion added by AO under Section 69 ofthe Act in the hands of assessee in the assessment year underconsideration. The AO did not find explanation offered by assessee tobe plausible and accordingly added the amount treating it to be anincome from unexplained source. It was set aside by CIT (Appeal)and upheld by Tribunal in an appeal filed by the Revenue whenappeal filed by Revenue was dismissed in part in so far as theimpugned additions was concerned. 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 contend that 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., thenthe Tribunal should have relied on the one which supported theRevenue. We do not agree to any of these submissions for more thanone 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 2 appellate authorities, then insuch event, a finding recorded on such explanation is binding on theHigh Court. 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 2 appellate authorities, then insuch event, a finding recorded on such explanation is binding on theHigh Court. 9.Perusal of the impugned finding would go to show thatTribunal did examine the explanation offered by assessee in detailand then recorded a finding for its acceptance. Such finding whenchallenged does not constitute a substantial question of law within themeaning of Section 260A ibid in an appeal arising out of such order. 10.In our opinion, therefore, once the CIT (Appeal) andTribunal accepted the explanation of assessee and accordingly,deleted certain additions made by A.O. then it would not involve anysubstantial issue of law as such. In other words, this Court in itsappellate jurisdiction under Section 260-A ibid, would not againdenovo hold yet another factual inquiry with a view to find out as towhether explanation offered by assessee and which found acceptanceto the Tribunal is good or bad, or whether it was rightly accepted, ornot. It is only when the factual finding recorded had been entirelydehors the subject, or that it had been based on no reasoning, orbased on absurd reasoning to the extent that no prudent man of average judicial capacity could ever reach to such conclusion, or thatit had been found against any provision of law, then a case forformulation of substantial question of law on such finding can be saidto have been made out. 11.In our view, no such error could be noticed by us in theimpugned order because as observed supra, the CIT (Appeal) andTribunal did go into the details of explanation offered by assessee andthen accepted the explanation. As a consequence thereof, theadditions made by Assessing 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 our view it does notinvolve any substantial question of law because it is only a matterrelating to explaining the source of income by the assessee andnothing else. It was for the Tribunal on facts to appreciate theexplanations offered by the assessee and then record the finding onsuch facts. It was done. It is end of the issue so far as facts areconcerned. 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. [C.M. Totla ], J. /Anil/ [A.M. Sapre],J.