2023 (12) TMI 981 - HC - Income Tax

Unaccounted land transactions carried out - Incriminating documents in the form of duly written and signed Sauda Chithi found and seized during the search and seizure action carried out by the Department - ITAT Deleted the addition - substantial question of low or fact - Whether ITAT is justified in deleting the addition of relying upon, the decision of Shri Pravinchandra Dahyabhai Umrigar 2022 (5) TMI 1479 - ITAT SURAT without appreciating the fact that addition was made on the basis of incriminating documents, showing unaccounted land transactions carried out by the assessee, found and seized during the course of search proceedings? HELD THAT - As decided in the case of Shri Pravinchandra Dahyabhai Umriger 2022 (5) TMI 1479 - ITAT SURAT the sauda chithi is a dumb document as far as the assessee is concerned. Hence, the additions cannot be made on the basis of such dumb documents. High Court must make every effort to distinguish between a question of law and a substantial question of law. In exercise of powers under Section 260A, the findings of fact of the Tribunal cannot be disturbed. It has to be kept in mind that the right of appeal is neither a natural nor an inherent right attached to the litigation. Being a substantive statutory right, it has to be regulated in accordance with law in force at the relevant time. The conditions mentioned in Section 260A must be strictly fulfilled before an appeal can be maintained under Section 260A. Such appeal cannot be decided on merely equitable grounds. A finding of fact may give rise to a substantial question of law, inter alia, in the event the findings are based on no evidence and/or while arriving at the said finding, relevant admissible evidence has not been taken into consideration or inadmissible evidence has been taken into consideration or legal principles have not been applied in appreciating the evidence, or when the evidence has been misread. See Madan Lal Vs. Mst. Gopi Anr. 1980 (8) TMI 204 - SUPREME COURT , Narendra Gopal Vidyarthi Vs. Rajat Vidyarthi 2008 (12) TMI 724 - SUPREME COURT . We have gone through the observations made by the Tribunal while passing impugned common order. We have also considered the submissions canvassed by learned Standing Counsel for the revenue. If the facts of the present case are examined on touch stone of the decisions rendered by the Hon ble Supreme Court as observed hereinabove, we are of the opinion that the present appeals do not involve any substantial question of law.

Summary

Issues involved:
The judgment involves the following Issues:
1. Whether the addition of Rs. 41,67,45,000/- should be deleted based on incriminating documents found during search proceedings.
2. Whether the incriminating documents, such as the "Sauda Chithi," should be considered as evidence in the case.
3. Whether the assessee provided a satisfactory explanation for the "Sauda Chithi" and the involvement of on money in the transaction.
4. Whether the retraction of a statement by a witness should impact the decision-making process.
5. Whether the Valuation Report by the Departmental Valuation Officer adequately considered all relevant evidence.
6. Whether the opportunity for cross-examination was granted to the assessee.
7. Whether the observation regarding the land transaction without a registered sale deed is valid.

Judgment Details:
The Tribunal allowed the appeal based on a previous judgment, leading to the Revenue's appeal. The High Court dismissed the appeals as they did not involve any substantial question of law. The Court referred to previous Supreme Court decisions to define what constitutes a substantial question of law. The Court emphasized that the right of appeal must adhere to the prescribed procedure and be based on substantial questions of law. The High Court cannot disturb findings of fact by the Tribunal unless a substantial question of law is involved. The Court highlighted the importance of formulating substantial questions of law for appeal. The judgment emphasized the need for a balanced approach in deciding appeals and the exceptions to interfering with lower courts' findings.

Conclusion:
The High Court dismissed the tax appeal as it did not involve any substantial question of law, based on the principles outlined in previous Supreme Court decisions. The Court reiterated the importance of adhering to the prescribed procedure and formulating substantial questions of law for appeals. The judgment highlighted the need for a balanced approach and exceptions to interfering with lower courts' findings.