2010 (7) TMI 37 - HC - Income Tax

Search and seizure evidence collected during search ITAT held that no documentary proof was found at the time of search to show pledging of jewellery by 41 persons ITAT also observed that statement given by 4 persons in favour of the appellant is not supported by any evidence. Held that - Tribunal has given cogent reasons for its conclusion and that the appellant has, in the present proceedings essentially challenged findings of fact - a question of fact becomes a question of law, if the finding is either without any evidence or material, or if the finding is contrary to the evidence, or is perverse or there is no direct nexus between conclusion of fact and the primary fact upon which that conclusion is based - But, it is not possible to turn a mere question of fact into question of law by seeking whether as a matter of law the authority came to a correct conclusion upon a matter of fact. appeal dismissed

Summary

Issues:
Challenge to order of the Income Tax Appellate Tribunal for block assessment period 01st April, 1995 to 04th March, 2002.

Analysis:
The appeal under Section 260A of the Income Tax Act, 1961 was filed to challenge the order of the Income Tax Appellate Tribunal related to a search and seizure operation conducted on the appellant and his son's premises on 04th March, 2002. During the operation, jewellery weighing 1737.5 gms valued at Rs.7,81,875/- was found. The appellant contended that the Tribunal erred in reversing the Commissioner's findings without providing reasons, especially considering that 41 slips were found during the operation, but only 15 were considered. The Tribunal accepted the appellant's submission that 41 persons had pledged jewellery with the appellant, but found no documentary proof during the search to support this. Additionally, the statements in favor of the appellant lacked evidence, and affidavits supporting the appellant's version were not filed before the Assessing Officer in a timely manner. The Tribunal also noted that the appellant's claim of some slips not being seized lacked substantiation.

The High Court, in its judgment, found that the Tribunal had provided cogent reasons for its conclusion, and the appellant essentially challenged findings of fact. It was emphasized that a question of fact becomes a question of law only under specific circumstances, such as when the finding is without evidence, contrary to evidence, or lacks a direct nexus with the primary fact. The Court concluded that no substantial question of law arose in the present proceedings, as the authority's conclusion was not deemed incorrect as a matter of law. Consequently, the appeal and pending application were dismissed for lacking merit, with no orders as to costs.

This judgment highlights the importance of evidence, factual findings, and the distinction between questions of fact and law in tax assessment matters. The Court's analysis underscores the need for substantial evidence to support claims and the limited scope of challenging factual findings as questions of law.