2012 (8) TMI 610 - HC - Income Tax

Disallowance of loss - Tribunal allowed the appeal and granted the benefit to the assessee Held that - Once the Tribunal accepted the explanation of assessee and accordingly, deleted the additions in question made by the Assessing Officer and the Commissioner of Income-tax (Appeals), then it would not involve any substantial issue of law as such - court in its appellate jurisdiction under section 260A ibid, would not again de novo hold yet another factual inquiry with a view to find out as to whether the explanation offered by assessee and which found acceptance to the Tribunal is good or bad, or whether it was rightly accepted, or not appeal dismissed

Summary

Issues:
1. Disallowance of loss on account of sale of shares.
2. Disallowance of another transaction amount as business loss.

Issue 1: Disallowance of loss on account of sale of shares:
The appeal pertains to an order passed by the Income-tax Appellate Tribunal allowing the assessee's appeal in part and reversing the order of the Commissioner of Income-tax (Appeals) regarding the disallowance of loss on the sale of shares. The Tribunal found that the transaction was genuine, and there was no evidence to suggest any wrongdoing. The Tribunal concluded that the Assessing Officer's disallowance was not justified. The High Court, after examining the facts and the Tribunal's reasoning, held that the issue was a question of fact, not law. The Court emphasized that it cannot re-examine factual issues or draw new inferences. Once the Tribunal accepts the assessee's explanation, the finding is binding. The Court found no substantial question of law involved and dismissed the appeal.

Issue 2: Disallowance of another transaction amount as business loss:
The Tribunal also examined another transaction where the Commissioner of Income-tax (Appeals) disallowed a specific amount as business loss. The Tribunal found that the transaction was genuine, with physical delivery and transfer taking place. The Tribunal held that the assessee was entitled to claim the deduction as a business loss. The High Court reiterated that this issue was a question of fact, not law. The Court emphasized that it cannot conduct a fresh factual inquiry or question the Tribunal's acceptance of the assessee's explanation. The Court held that the Tribunal's finding was detailed and based on evidence, and since no substantial question of law arose, the appeal was dismissed.

In conclusion, the High Court dismissed the appeal filed by the Commissioner of Income-tax, stating that no substantial question of law was involved in either of the issues. The Court upheld the Tribunal's findings, emphasizing that the matters were primarily factual in nature, and the Tribunal's decisions were based on evidence and reasoning.