D.b. Income Tax Reference Application v. Sh. Harish Boob

D.B. INCOME TAX REFERENCE APPLICATION NO.98/1999[CIT, JODHPUR VS. SH. HARISH BOOB] DATED : 21.09.2007 HON'BLE MR. BHAGWATI PRASAD, J.HON'BLE MR. MUNISHWAR NATH BHANDARI, J. Mr.K.K.Bissa for the applicant.Mr.Sanjeev Jodhari for the respondent. BY THE COURT : [AS PER HON'BLE MR. BHANDARI,J.] ***** Revenue has preferred this reference application under theprovisions of Section 256 [2] of the Income Tax Act, 1961. The IncomeTax Appellate Tribunal had refused to make reference of the questions,vide its order dated 28.01.99. A reference application was filed before the Income Tax AppellateTribunal under the provisions of Section 256 [1] of the Income Tax Actfor reference of certain questions to this Court. Those questions werearising out of the order of the learned Tribunal vide its order dated25.08.98 in relation to the block Assessment Years 1986-87 to 1996-97. Following question was sought for reference. “Whether on the facts and in the circumstancesof the case the ITAT was justified in law in altogetherignoring the circumstantial evidence and deleting theaddition of Rs.2,80,000/- made on account ofundeclared payments made for the purchase ofimmovable property? The learned Income Tax Appellate Tribunal vide its order dated28.01.99 had refused to refer the question. Learned counsel appearingfor the Revenue submitted that pursuant to the provisions of Section 158 of the Income Tax Act, assessee's undisclosed income can becomputed on the basis of material or information available with theAssessing Officer thus according to the learned counsel for theRevenue, the Appellate Tribunal has wrongly refused the referredquestion so raised for its reference. It was thus prayed that the HighCourt should call interference for the reference of the issue. Learned counsel appearing for the assessee urged that thequestion raised by the Revenue is not a referable questions as thelearned Tribunal had considered each and every aspect of the matterwhile denying reference of the question to the Hon'ble High Court. Itwas thus prayed that the reference applications moved by the Revenueshould be rejected. We have considered the rival submissions of the parties and findthat Assessing Officer had made addition of Rs.2,80,000/- on accountof investment for purchase of immovable property. The additions wasdeleted by the Appellate Tribunal while deciding the appeals against theorder of block assessment under Section 158 on the ground thatthere was no material available with the Assessing Officer on the basisof which such addition could have been made. Though it was urged that Assessing Officer was in possession of the information regardingpayment of money by assessee in respect of other transaction thusjudging the past conduct of assessee and nature of transaction, a fairestimate was made. On the other hand, learned counsel for the assessee submittedthat no material information was in possession of the Assessing Officeras required under Chapter XIV B for making any addition in the blockassessment. It is only on the basis of inferences drawn by theassessee while making assessment that additions were made however,the said issue was carefully dealt with by the Tribunal while deciding thematter and otherwise the additions can be made only on the basis ofincrimination document/material collected and assessed during thecourse of search. The various benches of the Tribunal have followedthis principle thus the issue sought to be referred can be treated asreferable as it had already settled by the various benches of theTribunal. On the other hand, learned counsel for the assessee submittedthat no material information was in possession of the Assessing Officeras required under Chapter XIV B for making any addition in the blockassessment. It is only on the basis of inferences drawn by theassessee while making assessment that additions were made however,the said issue was carefully dealt with by the Tribunal while deciding thematter and otherwise the additions can be made only on the basis ofincrimination document/material collected and assessed during thecourse of search. The various benches of the Tribunal have followedthis principle thus the issue sought to be referred can be treated asreferable as it had already settled by the various benches of theTribunal. We have gone through the provisions of Section 158 of theIncome Tax Act and find that even in accordance with the aboveprovisions, addition can be made only when evidence is available as aresult of search or a requisition of books of accounts or document andother material. However, addition cannot be made on the basis ofinferences. Various benches of Tribunal are following the principle that additions can be made only on the basis of incriminatingdocuments/material collected during the course of search. However, inthe present matter, no such facts are available rather it says thatadditions were made by the Assessing Officer based on inferenceswhich does not fall within the scope of Section 158 of the IncomeTax Act, therefore in our opinion question raised for reference cannotbe said to be referable and thereby we find no fault in the order of theTribunal. The factual position of the case has already been addressedby the appellate Tribunal thus, the finding of fact recorded by theTribunal cannot be made subject matter of a reference. Therefore, weare not persuaded by any of the arguments of the learned counsel forthe Revenue. Hence the reference petitions is hereby dismissed. J. , J. MAMTA