2007 (9) TMI 537 - HC - Income Tax

Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was justified in law in altogether ignoring the circumstantial evidence and deleting the addition of 2, 51, 056 made as undisclosed income for the assessment year 1991-92 on account of unexplained investment in gold ornaments etc.? Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was justified in law in deleting the addition of 45, 525 made as undisclosed income for the assessment year 1991-92 on account of unexplained investment in silver articles ? Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was justified in law in holding that the statement of the assessee s husband regarding surrender on account of unexplained investment in construction of house at 115 Central School Scheme Jodhpur recorded at the time of search is to be ignored. Whether on the facts and circumstances of the case the Income-tax Appellate Tribunal was justified in law in deleting the addition of 3, 43, 625 out of addition of 5, 00, 000 made on account of unexplained investment in construction of house at 115 Central School Scheme Jodhpur ? Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was justified in law in directing the Assessing Officer to ignore the statements recorded at the time of search in respect of surrender made with reference to incriminating documents while setting aside for fresh consideration the addition of 48, 880? Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was justified in law in altogether ignoring the circumstantial evidence and deleting the addition of 5, 62, 000 made on account of undeclared payments made for the purchase of immovable property ? Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was justified in law in deleting the addition of 87, 000 made on account of unexplained credit and interest thereon in spite of the fact that the creditor had not been proved by the assessee ? Held that - No question involves questions of law for our reference. Mainly issues raised by the Revenue for our reference are based on finding of fact or needs re-appreciation of finding. Other issues are already settled thus in that circumstances it cannot be said that the Revenue has made out any case for asking for any questions for our reference. In these circumstances application preferred by the Revenue for seeking reference is found without merit. Hence the same is dismissed accordingly.

Summary

Issues Involved:
- Refusal of Income-tax Appellate Tribunal to make reference of certain questions to the High Court under section 256(1) of the Income-tax Act, 1961.

Analysis:

The Revenue filed a reference application under section 256(2) of the Income-tax Act, challenging the refusal of the Income-tax Appellate Tribunal to refer questions arising from the block assessment years 1986-87 to 1996-97. The questions related to various additions made by the Assessing Officer, including undisclosed income from gold and silver ornaments, unexplained investments in construction, and undeclared payments for property purchase. The Revenue contended that the Tribunal should have referred these questions to the High Court as they involved legal issues. The argument was based on the insufficiency of disclosures made by the assessee and the protective deletion of certain additions by the Tribunal.

In response, the counsel for the assessee supported the Tribunal's decision, stating that no legal issues necessitated a reference to the High Court. The Tribunal's refusal to refer the questions was considered justified by the assessee's counsel. Upon reviewing the submissions and the record, the Court analyzed each question raised by the Revenue for reference.

For the first four questions concerning unexplained investments, the Court observed that the Tribunal's findings were based on a thorough consideration of the evidence presented. Since the questions were fact-based and did not require re-appreciation of evidence, the Court deemed them not suitable for reference. Similarly, the fifth question, regarding an addition recommended for re-examination, did not raise any legal issue warranting a reference.

Regarding the sixth question on the deletion of an addition for undeclared payments related to immovable property, the Court noted that the addition lacked a basis in incriminating documents or information. As the issue had been previously addressed by other Tribunal benches, it was deemed non-referable. Finally, the last question concerning unexplained credit and interest deletion was dismissed as the credit was duly recorded in the regular books of account, falling outside the scope of undisclosed income assessment.

Consequently, the Court concluded that none of the questions raised by the Revenue involved legal issues necessitating a reference to the High Court. The application for reference was deemed without merit and dismissed accordingly.