2003 (7) TMI 47 - HC - Income Tax

We find it difficult to hold that the Tribunal s alleged failure to return independent findings on the issues raised gives rise to a substantial question of law - We are of the considered view that no question of law much less a substantial question of law arises from the order of the Tribunal. Though it does appear that the Tribunal has not specifically recorded its own findings on the issues raised but from the order it is clear that it has endorsed the view taken by the Commissioner (Appeals).

Summary

Issues Involved:
- Appeal by Revenue under section 260A of the Income-tax Act, 1961 challenging the order of the Income-tax Appellate Tribunal for the assessment year 1993-94.
- Substantial questions of law raised by Revenue:
- Upholding the order of the Commissioner of Income-tax (Appeals) without giving its own finding.
- Confirming the deletion of trading addition made by the Assessing Officer.
- Justification for deleting the trading addition based on estimated sales after rejecting the books of account.
- Allegation of the order of the Income-tax Appellate Tribunal being perverse for passing a non-speaking order.

Detailed Analysis:

Issue 1: Upholding the Commissioner's Order without Independent Finding
The Tribunal endorsed the Commissioner's view that the slip dated April 22, 1993, could not be the basis for estimating sales for the assessment year 1993-94, as it pertained to the subsequent year. The Tribunal found no support for the estimation of sales and gross profit rate by the Assessing Officer in the seized documents. The appellant contended that the Tribunal should have recorded its independent finding on the trading addition. However, the Court held that the Tribunal's order must indicate the issues, evidence, and findings, and concluded that no substantial question of law arose as the Tribunal endorsed the Commissioner's view based on lack of supporting material for estimation.

Issue 2: Deletion of Trading Addition
The Assessing Officer added an amount to the total income due to discrepancies in sales figures. The Commissioner deleted the trading addition of Rs. 11,15,967, stating that the slip used for estimation was for a different year and lacked supporting material. The Tribunal upheld the Commissioner's decision, emphasizing the absence of relevant material for estimation. The Court found no substantial question of law as the slip used for estimation was deemed irrelevant for the relevant assessment year.

Issue 3: Allegation of a Perverse Order
The Revenue alleged that the Tribunal's order was perverse due to being non-speaking. The Court clarified that while the Tribunal should provide clear reasons and findings, the absence of independent findings did not raise a substantial question of law. The Tribunal's decision was based on the lack of supporting evidence for estimation, particularly regarding the slip used, which was irrelevant to the assessment year in question.

In conclusion, the Court dismissed the appeal, stating that no substantial question of law arose from the Tribunal's order. The decision was based on the lack of supporting material for the estimation of sales and gross profit, rendering the Tribunal's endorsement of the Commissioner's view justified in the absence of relevant evidence.