2001 (8) TMI 21 - HC - Income Tax

Summary

Issues:
The issues involved in this case are related to the assessment year 1986-87, where the main dispute was regarding the taxable income determined by the Assessing Officer, which was subsequently challenged by the assessee leading to appeals and petitions under the Income-tax Act, 1961.

Assessment of Taxable Income:
The assessee initially declared an income of Rs.31,430 for the assessment year 1986-87, but the Assessing Officer fixed the taxable income at Rs.4,86,550 based on records from the Sales Tax Act assessment. The Commissioner of Income-tax (Appeals) later found in favor of the assessee, ordering the deletion of Rs.57,595, and further, a sum of Rs.80,797 was directed to be deleted upon appeal, which was dismissed by the Revenue.

Appeals and Petitions:
Both the Revenue and the assessee filed appeals against the decisions made. The Revenue's appeal was dismissed, leading them to file a petition under section 256(1) of the Income-tax Act, 1961, which was also dismissed, prompting a petition under section 256(2) of the Act.

Legal Questions Raised:
The Revenue contended that the decisions of the Income-tax Appellate Tribunal were legally flawed in deleting the trading addition and granting relief to the assessee, alleging that the evidence relied upon was insufficient and not supported by independent evidence like freight or sale bills.

Court's Decision:
The High Court upheld the Tribunal's decision, stating that the additions made by the Assessing Officer were not sustainable as the order on which they were based had been set aside. The Tribunal's findings were deemed factual and supported by evidence, thus no legal question as raised by the Revenue was found to arise. Additionally, the Tribunal's acceptance of the transfer of stocks to a sister concern, owned by Smt. Shakuntala Bhatia, was also upheld, with the Revenue not challenging this decision further.

Conclusion:
In light of the above considerations, the High Court dismissed the petition, finding no grounds to direct the Tribunal to make any reference to the court, thereby concluding the matter in favor of the assessee.