2012 (10) TMI 96 - HC - Income Tax

Undisclosed income - Held that - Whether particular transaction involves the investment or not is the question of fact and the CIT(Appeal), recorded the finding that A.O. had no reason at all to treat entire purchases as unexplained investment and it was a purely imagination of the A.O. So far as the estimation of the income is concerned, for that also, cogent reason has been given by the CIT(Appeal) as well as considered by the Tribunal. The considered opinion that the question of facts have been decided by the CIT(Appeal) as well as by the Tribunal after appreciation of the evidences which have not been vitiated because of non-consideration of the material evidence, nor because of consideration of irrelevant evidence, nor the findings recorded by these two authorities can be said to be perverse - no substantial question of law.

Summary

Issues Involved:
Question of law regarding the reversal of findings by the appellate authorities based on undisputed facts and the objection raised by the respondent regarding the framing of the question as a question of law.

Analysis:
The judgment by the High Court involved a question of law concerning the reversal of findings by the appellate authorities based on undisputed facts. The main issue was whether the appellate authorities erred in reversing the finding and order passed by the Assessing Authority regarding the whole-sale business of battery done by the assessee. The respondent raised an objection, contending that the question referred was not a question of law as the finding of fact had been recorded by the CIT(Appeal) and confirmed by the Tribunal. It was argued that the CIT(Appeal) had considered all materials before reversing a part of the findings recorded by the Assessing Officer. The respondent emphasized that determining if a transaction involves investment is a question of fact, and the CIT(Appeal) had provided cogent reasons for its decision, which were also considered by the Tribunal.

The High Court, after reviewing the detailed reasons provided by the CIT(Appeal) and the Tribunal, concluded that the question of facts had been adequately decided by both authorities after appreciating the evidence presented. The court noted that the findings were not vitiated due to non-consideration of material evidence or the consideration of irrelevant evidence. The High Court found that the findings recorded by the CIT(Appeal) and the Tribunal were not perverse. Consequently, the court held that the question framed was not a question involved in the appeal and proceeded to dismiss the tax appeal based on these facts. The judgment highlighted the importance of factual determinations made by the lower authorities and emphasized the need for cogent reasons and evidence in decision-making processes in tax matters.