Db It Reference Appl v. M/S. Olympic Travesl (P) Ltd. 1

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR DB INCOME TAX REFERENCE APPLICATION NO. 94/1994 COMMISSIONER OF INCOME-TAX, JAIPUR - APPLICANT VS M/S OLYMPIA TRAVELS (P) LTD. - RESPONDENT DATE OF JUDGMENT : 15TH SEPTEMBER, 2011. HON'BLE THE CHIEF JUSTICE MR. ARUN MISHRAHON'BLE MS. JUSTICE BELA M. TRIVEDI Mr. J.K. Singhi, Sr. Advocate with Mr. Anuroop Singhi for the applicant. BY THE COURT : (PER HON'BLE BELA M. TRIVEDI,J.) (1) The present income tax reference application has been made under Section 256(2) of the Income Tax Act, 1961 (hereinafter to be referred to as “the said Act”) by the applicant Commissioner of Income Tax, Jaipur, against the order dated 28.10.93 passed by the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur (hereinafter to be referred to as “the Tribunal”) in RA No. 326/JP/92, arising out of ITA No. 848/JP/89. (2) The short facts giving rise to the present reference application are that the respondent-assessee company had allotted its share to the tune of Rs. 1 lac to its Managing Director Smt. Manju Kharari and had also given a loan to the tune of Rs. 22,000/-. Since the respondent-assessee had failed to prove the source of the said credits before the Assessing Officer, the sum of Rs. 1,22,000/- was treated as income of the assessee from undisclosed source. Being aggrieved by the said order, the assessee had filed an appeal before the Commissioner of Income Tax (Appeals), which came to be accepted and the CIT (Appeals) deleted the addition of Rs. 1 lac. The Revenue, therefore, filed an appeal before the Tribunal, which vide its order dated 28.8.92 dismissed the said appeal of the Revenue. The Revenue thereafter submitted a reference application under Section 256(1) of the said Act requesting the Tribunal to refer the following questions of law for the opinion of the High Court :- “Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in upholding the decision of the C.I.T. (A.) who deleted the addition of Rs. 1,22,000/- made on account of assessee's income from undisclosed sources, despite the fact that the statement of Smt. Manju Kharari recorded by the Assessing Officer was full of contradictions and the source of the purchase of car and a sum of Rs. 22,170/- deposited in the assessee-company for allotment of shares remained unexplained?” (3) The Tribunal vide its order dated 20.10.93 dismissed the said reference application and, therefore, the petitioner-Commissioner of Income Tax, Jaipur has filed the present reference application under Section 256(2) of the said Act. (4) It has been sought to be submitted by learned counsel, Mr. J.K. Singhi, for the petitioner that there was a question of law involved in the matter for which reference application was made before the Tribunal, however the Tribunal has wrongly rejected the same, holding that no referable question of law had arisen from the order of the Tribunal. (5) It is pertinent to note that the order dated 10.3.89 of Commissioner of Income Tax (Appeals) allowing the appeal of the assessee, was upheld by the Tribunal vide its order dated 28.8.92 by giving reasoned order. Thereafter the reference application filed by the Revenue under Section 256(1) of the said Act was dismissed by the Tribunal following the two judgments of this court wherein it was held that the question whether cash credits were genuine or not was a question of fact. The relevant observations made by the Tribunal while dismissing the reference application by the impugned order dated 28.10.93 are reproduced as under :- (5) It is pertinent to note that the order dated 10.3.89 of Commissioner of Income Tax (Appeals) allowing the appeal of the assessee, was upheld by the Tribunal vide its order dated 28.8.92 by giving reasoned order. Thereafter the reference application filed by the Revenue under Section 256(1) of the said Act was dismissed by the Tribunal following the two judgments of this court wherein it was held that the question whether cash credits were genuine or not was a question of fact. The relevant observations made by the Tribunal while dismissing the reference application by the impugned order dated 28.10.93 are reproduced as under :- “2. The brief facts of the case are that the assessee is a Private Limited Company. One Smt. Manji Kharari had given her car to assessee for Rs. 70,000/- and had met assessee's expenses on different dates to the tune of Rs. 52,170/-. Against this, the assessee allotted shares worth Rs. 1 lakh to Smt. Manji Kharari and the balance was shown to her credit. When the Assessing Officer enquired, Smt. Manju Kharari confirmed these transactions. The Assessing Officer, however, did not accept this explanation and treated Rs. 1,22,000/- as assessee's income from undisclosed sources. The CIT (Appeals) deleted the addition. On an appeal filed by the Revenue, the Tribunal upheld his decision taking into account the evidence on record and all the facts and circumstances of the case. The Tribunal, thus, upheld the genuineness of the transaction and agreed with the CIT (A) that the assessee had discharged the burden cast upon it, even if it was taken as cash credit as argued by the ld. D/R. 3. The Hon'ble Rajasthan High Court has held in the case of Shri Caneriwal Vs. LCIT 192 ITR 347 that the question whether cash credits are genuine or not in question of fact. In the case of Addl. CIT Vs. Noor Mohd. & Co. 97 ITR 705 (Raj) the Hon'ble Court has held that whether a legal presumption has been rebutted or not is always a question of fact and can never be a question of law.” (6) In view of the above order passed by the Tribunal and in view of the ratio of the judgments laid down by this court in the above mentioned cases, which have been followed by the Tribunal, we do not find any substance in the present reference application. There being no question of law involved in the instant case, the reference application deserves to be dismissed and is accordingly dismissed. (BELA M. TRIVEDI ) J. ( ARUN MISHRA ) CJ. MRG.