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TMI Blog2013 (12) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... o be disturbed by the High Court on a reference unless it appears that there was no evidence before the Tribunal upon which they, as a reasonable men, could come to the conclusion to which they have come ; and this is so, even though the High Court would on the evidence have come to a conclusion entirely different from that of the Tribunal - Such a finding can be reviewed only on the ground that there is no evidence to support it or that it is perverse - The assessees was entitled to the deduction under section 80HHC of the Act in respect of the export of goods to Taj - Decided against Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... lso received by the Assessing Officer, which was that of one Sheikh Suad Bin Abdullah Rashid Al Nuaimi, president of the Economic Department, PO Box No.870, Ajmen, U. A. E. The letter is reproduced in the assessment order and, therefore, is not reproduced here. Suffice to note that the Sheikh stated that he was a partner of Taj and that he has never heard of MSIL from whom his firm was supposed to have imported synthetic rubber sole sheets, that he has never met or heard of Pavan Sachdeva, one of the Directors of MSIL and that the order said to have placed by Taj with MSIL by letter dated January 18, 1993, for 10 consignments of 53077 rubber sheets for a total cost of US $ 10,615,380 was not actually a letter written by Taj, that the letter did not contain any specifications which was quite unusual for an order of import, that he has seen a list of 155 shipping consignments sent by MSIL between March 16, 1993, and March 11, 1994, for a total FOB value of US $ 10,615,392, that he was not aware of any such shipping consignment imported by Taj into Dubai and that the name of Taj has been misused in the documents. On the basis of this letter, the Assessing Officer wrote to MSIL and sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed the issuance of the letter dated December 28, 1994. (v) Sheikh Nuaimi informed that the contents of the letter dated December 28, 1994, are correct and that he issued the same as per the advice tendered by his legal consultant. 4. In the light of the aforesaid facts the Assessing Officer held that there were no exports made by the assessee to Taj and no deduction under section 80HHC was allowable. He accordingly denied the deduction. However, the amount of Rs. 6,05,43,627 was treated as income of the assessee under the head "Income from other sources" since the money had actually been received by the assessee. Thus, the total income of the assessee was computed at Rs. 6,05,46,197 which consisted of the returned income of Rs.2,570 and the addition of Rs. 6,05,43,627 as "Income from other sources". 5. The assessee appealed to the Commissioner of Income-tax (Appeals) who heard both the assessee as well as the Assessing Officer and passed an order on March 19, 1997. Before the Commissioner of Income-tax (Appeals) the assessee adduced additional evidence under rule 46A of the Income-tax Rules, 1962, to show remittances received from Taj through banking channels, for purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1994, and had ignored the documentary evidence adduced by the assessee showing export sale of Rs. 11.47 crores. The Assessing Officer had also held that the expenses on electricity and water amounted only to Rs. 57,981 and wages amounted only to Rs. 14,40 from which goods of the value of Rs. 11 to 12 crores cannot be manufactured. In coming to this conclusion, the Assessing Officer has ignored the evidence adduced by the assessee that it was getting the work done through job work undertaken by its sister concerns. (ii) Since the assessee was getting the job done through sister concerns, the fact that it possessed machinery of only Rs. 2,72,249 was irrelevant. (iii) The assessee did not claim at any point that the entire goods were manufactured by it. (iv) Neither the assessee nor the Assessing Officer could succeed in producing the Sheikh for further examination on his statements. However, the assessee has been able to lead sufficient documentary evidence to show that the exports were genuine. This included the following : "1. Original Bank certificate from ANZ Grindlays Bank, Dubai, UAE showing bills received by the bank and drawn on M. S. Taj Al Khaleej General Trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill No. 9452, dated January 22, 1993. (18) Duty Exemption Entitlement Certificate Book. Issued and maintained by Department of Revenue (Customs), Government of India bearing serial No. 055526, containing particulars of DEEC, value of the imports licence Rs. 7.20 crores (advance licence), assessee's commitment to export goods of that value, particulars of exports made." (vi) In addition to the above, the assessee also produced evidence to show that the remittances for the export sale were received from Dubai through banking channels which has been overlooked by the Assessing Officer. (vii) The income-tax authorities have ignored the fact that the assessee had exported similar goods to other foreign buyers which have not been doubted by them. Further, the Sheikh had stated that Taj was not only importing from MSIL but also from its sister concerns. 9. With regard to the statements of the Sheikh, the Tribunal found that in the first statement dated December 28, 1994, he had denied making any purchases from MSIL. This was sought to be explained by the assessee before the Tribunal on the ground that it was given at the behest of M/s. Gujarat Apar Polymer Ltd., a business rival whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ujarat Apart Polymer Ltd. and its lawyer and that the statement does not have any authenticity at all. The Sheikh further admitted that the telephone number and the P. O. number given on the order form placed with the M. S. group were being used by TAKGT. Further, that no dues against any bills were to be paid and that all the payments have already been made from his accounts in A and Z Grindlays Bank, Deira, Dubai. There was a copy of another declaration from Sheikh Rasheed which was dated and also authenticated by the Dubai Chamber of Commerce and Industry, which repeats the same story to the effect that the orders placed with the M. S. group were genuine. It means that the Sheikh in his subsequent declaration and the affidavit, the genuineness of which has also been accepted and communicated to the Additional Director General Foreign Trade by the Consulate General of India in their letter dated May 12, 1997, placed at, pages 58 and 59 of the paper book of the assessee, mentioned that the letter dated December 28, 1994, was not registered, whereas, his subsequent affidavits were registered and in the affidavit dated January 13, 1997, his signature have been legalized by the Dubai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28, 1994, when the same was subsequently retracted by the Sheikh himself in a duly authenticated affidavit." 11. After examining the documentary evidence placed by the assessee the Tribunal held that there was no basis to disbelieve the entire documentary evidence merely because of the statement of the Sheikh made on December 28, 1994. The Tribunal finally held that the tax authorities were not justified in treating the export sale made by the assessee to Taj, Dubai, as non-genuine and in refusing the deduction claimed under section 80HHC. The Tribunal also deleted the addition of the amount of Rs. 6,05,43,627 as "Income from other sources". 12. Similar orders were passed in the case of MSIL for the assessment year 1994-95. In the case of M. S. Shoes East Ltd. and the case of Pearl Intercontinental Ltd. also the Tribunal took the same view. It may be noted that in these cases also the assessees had claimed the deduction under section 80HHC in respect of the exports made to Taj which were disbelieved. The export proceeds were assessed as "Income from other sources". In the case of M. S. Shoes East Ltd., the Assessing Officer also imposed a penalty of Rs. 59,58,588 under section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material has been brought on record or in the course of the proceedings before the Tribunal to throw any doubt on the credibility of the affidavit sworn to before the Indian Consulate in Dubai. The Sheikh was neither produced by the Assessing Officer nor by the assessee and he was not subjected to any examination or cross-examination by the incometax authorities. It is in these circumstances that the Tribunal has chosen to accept the retraction of the Sheikh, supported by the affidavit. Added to this is the fact that there was copious documentary evidence in support of the exports. The decision taken by the Tribunal is not, in our opinion, vulnerable to the charge that it has been arrived at by ignoring relevant material or evidence or by taking into account irrelevant evidence or material. The findings of the Tribunal are essentially findings of fact and they cannot be subjected to the criticism of being unreasonable or perverse or irrational. It has been held by the Supreme Court in Sree Meenakshi Mills Ltd. v. CIT [1957] 31 ITR 28 (SC) as follows (page 36) : "It has been held on the corresponding provisions in the English Income-tax statutes that a finding on a question of fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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