2005 (1) TMI 12 - HC - Income Tax

Once the court (HC) had come to the conclusion that earlier two questions proposed were questions of fact, the court could not take a contrary view earlier orders became final as the revenue did not challenge them by filing appeal in SC in view of those 2 decisions impugned applications are dismissed to maintain judicial consistency arising between the same parties and the same case

Summary

Issues:
1. Application for reference under section 256(2) of the Income-tax Act
2. Tribunal's finding on the explanation of cash found from the assessee
3. Treatment of income from undisclosed sources despite maintaining regular books of account

Analysis:
1. The judgment pertains to an application by the Revenue under section 256(2) of the Income-tax Act following the dismissal of their application under section 256(1) in a specific case. The Revenue sought reference on two questions, one related to the Tribunal's finding on the explanation of cash found with the assessee and the other regarding the treatment of income from undisclosed sources despite maintaining regular books of account.

2. The first question raised by the Revenue was whether the Tribunal's finding that cash of Rs. 14,00,000 found from the assessee was explained, which the Revenue considered as perverse and unjustified. The court noted that similar questions were previously dismissed by the court in cases related to the wife and son of the present assessee, holding them as questions of fact. As a result, the court upheld the Tribunal's decision and dismissed the Revenue's application, citing judicial consistency and the finality of previous court orders.

3. The second question raised was whether the Tribunal was justified in holding that if the assessee maintained regular books of account for a specific assessment year, income from that year could not be treated as undisclosed income despite the provisions of section 158BB(1)(c) of the Income-tax Act. The court's decision was influenced by the prior dismissal of similar questions by the court in related cases, leading to the dismissal of the Revenue's application in this instance to maintain judicial consistency.

4. The court emphasized that since the questions raised were deemed as questions of fact in previous cases and were not challenged further by the Revenue in higher courts, the decisions became final. Therefore, the court dismissed the Revenue's application in the present case to uphold consistency in judicial decisions involving the same parties and case. Ultimately, the application was deemed to fail and was dismissed by the court.