2004 (4) TMI 11 - HC - Income Tax

Question of law - additions/deletions made by the Assessing Officer in the total gross income of the assessee who was being assessed for a block period 1989-90 to 1999-2000 under section 158BC - whether three additions which are the subject-matter of the appeal can be assessed in the hands of the assessee as his true income - By a detailed order passed by the Tribunal the contention of the assessee was accepted in part and three additions which were sought to be made the basis in this appeal were deleted - issue involved and sought to be raised is essentially a question of fact and does not involve any question of law much less substantial question of law. The jurisdiction of the High Court under section 260A of the Income-tax Act is confined to examination of substantial questions of law and not even questions of law much less questions of fact. Tribunal records a categorical finding by assigning cogent reasons appeal dismissed in limine

Issues:
1. Appeal filed by Revenue under section 260A of the Income-tax Act against an order passed by the Income-tax Appellate Tribunal.
2. Existence of substantial question of law for entertaining the appeal.
3. Dispute regarding additions/deletions made by the Assessing Officer in the total gross income of the assessee for the block period 1989-90 to 1999-2000.
4. Question of whether three additions can be assessed in the hands of the assessee as true income.
5. Tribunal's order accepting the assessee's contention in part and deleting the three additions, which is challenged by the Revenue.
6. High Court's jurisdiction under section 260A limited to substantial questions of law, not factual inquiries.

Analysis:
1. The High Court considered an appeal filed by the Revenue under section 260A of the Income-tax Act against an order of the Income-tax Appellate Tribunal. The Court noted that for entertaining such an appeal, the existence of a substantial question of law is necessary. After reviewing the case, the Court found that no substantial question of law arose from the Tribunal's order, leading to the dismissal of the appeal.

2. The dispute revolved around additions/deletions made by the Assessing Officer in the assessee's total gross income for the block period 1989-90 to 1999-2000. The main question was whether three specific additions could be considered as the true income of the assessee. The assessee provided explanations, while the Revenue contended that the additions belonged to the assessee and their family members. This issue was examined by the taxing authorities, starting with the Assessing Officer and later by the Tribunal based on the explanations provided by the assessee.

3. The Tribunal, through a detailed order, partially accepted the assessee's contention and deleted the three additions in question, rejecting the Revenue's arguments. The Revenue challenged this decision in the appeal before the High Court, arguing that the additions should be upheld. However, the High Court emphasized that the issue at hand was primarily a question of fact and did not involve any substantial question of law.

4. The High Court clarified that its jurisdiction under section 260A of the Income-tax Act is limited to examining substantial questions of law and does not extend to factual inquiries. The Court cannot interfere with findings of fact unless they are so perverse that no reasonable person could reach such a conclusion or if they violate established legal principles. In this case, the Court found that the Tribunal's order contained a well-reasoned and categorical finding based on the evidence presented.

5. After reviewing the Tribunal's order and finding its reasoning sound, the High Court declined to disturb the factual finding. Consequently, the Court dismissed the appeal, emphasizing that the finding of fact by the Tribunal was not open to challenge under section 260A of the Income-tax Act unless it was patently unreasonable or contrary to legal principles, which was not the case here.

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