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TMI Blog2002 (4) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... ing settled legal position and established law on the said subject of rules, practice and procedure of evidence, natural justice and fair play while confirming the addition of Rs.1,40,000 relying upon 'inadmissible evidence' and ignoring 'undisputed evidence' adduced by the assessee?" The matter pertains to the assessment year 1981-82. The assessee was a partnership firm dealing in sarees at Rajkot and doing its business since November 1, 1979. The assessee filed a return of its income on July 17, 1981. During the assessment proceedings the Department came in possession of some information to the effect that for acquiring the business premises on rent, the assessee-firm had paid certain amount by way of "pagri". As recorded in paragraph 5 of the draft assessment order, the premises occupied by the assessee were previously in possession of Mansukh Stores. Pursuant to the report made by Shri R.J. Vyas, Inspector of Income-tax, which revealed that certain amount was received by the landlord from the assessee, the Income-tax Officer issued summons under section 131 to the landlord, Shri Haresh jadavji Parekh, and recorded his statement on March 26, 1984, as noted in paragraph 5 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said Act (at annexure "H" in the paper-book), noted that as per its earlier directions, the Income-tax Officer had given an opportunity to the assessee to cross-examine the witnesses. He also took note of the fact that the affidavit of Smt. Vidyaben B. Doshi was being produced along with the written submissions filed before him on June 19, 1984. On the basis of the record, he observed that the additions made by the Income-tax Officer in the draft order were justifiable and no interference was called for. The Income-tax Officer was, therefore, directed to make a final assessment order in the matter. Accordingly, the Income-tax Officer made the assessment order on September 20, 1984, adding the amount of Rs.1,40,000 in the income of the assessee as the amount paid by way of "pagri" which did not find place in the books of account of the assessee. As discussed in paragraph 9 of his order, the Income-tax Officer finding that the version of Shri Doshi about having received the amount of Rs.1,20,000, out of which Rs.20,000 was received by way of cheque from the assessee was reliable, came to the conclusion that the said amount was includible in the total income of the assessee being t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80] 125 ITR 713, was cited to point out that it was held therein that before the income-tax authorities could rely upon the letter, they were bound to produce it before the assessee so that the assessee could controvert the statements contained in it by asking for an opportunity to cross-examine the manager of the bank with reference to the statements made by him. It was held that the statements of the manager in the letter were based on hearsay and that the Department ought to have called upon the manager to produce the documents and papers on the basis of which he made the statements and confronted the assessee with those documents and papers. (b) The decision of the Supreme Court in CIT v. Smt. P.K. Noorjahan [1999] 237 ITR 570, was cited for the proposition that the intention of Parliament for enacting section 69 of the said Act was to confer a discretion on the Income-tax Officer in the matter of treating the source of investment which has not been satisfactorily explained by the assessee as the income of the assessee, and the Income-tax Officer was not obliged to treat such source of investment as income in every case where the explanation offered by the assessee is found t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked for, which were duly furnished to the assessee. Moreover, the reliance placed by the authority was on the statement of the material witness and the report was not the basis for the conclusions reached by the Income-tax Officer or the Tribunal which restored the Income-tax Officer's order. It was submitted that the Tribunal's findings were findings of fact based on record and the assessee cannot require this court to reappreciate the evidence in this reference. It was then argued that the contention now canvassed that since it was the first year of business of the assessee, the income in question could not be treated as undisclosed income of the assessee used in investment, was never raised before any authority including the Tribunal and the said question does not arise from the order of the Tribunal and since the said question does not arise from the order of the Tribunal, this court cannot go into it. In support of his contention, learned standing counsel relied upon the following decisions: (a) The decision of the Supreme Court in C. Vasantlal and Co. v. CIT [1962] 45 ITR 206, was cited for the proposition that it was open to the Income-tax Officer to collect materials t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shop premises. An amount of Rs.20,000 was also given by the assessee by cheque to them towards the cost of "cupboard", "gadi", "takkia", etc. We have gone through the statement of Shri Doshi and we are fully satisfied therefrom that there was a categorical admission by Shri Doshi both in his earlier statement and in the cross-examination about the amount of Rs. 1 lakh having been paid by the assessee to his wife in lieu of handing over the possession of the premises in question. His statement that Rs.20,000 were paid by cheque by the assessee was borne out from the books of account of the assessee as held by the Tribunal. The Tribunal also took note of the fact that the shop in question was situated in one of the busiest localities in the city of Rajkot and the assessee had obtained the possession of the shop on payment of the amounts admitted by Mr. Doshi. The Tribunal observed that the landlord in his statement had admitted that the earlier tenant was in possession since 25 to 30 years on a monthly rent of only Rs.25 and, therefore, there was nothing unusual in the said payment having been given to the outgoing tenant. The Tribunal held that the material on record inspired full c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position was settled long back by the Supreme Court in the case of CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589, in which it was held that the jurisdiction of the High Court in a reference under section 66 of the Indian Income-tax Act, 1922, is a special one, different from its ordinary jurisdiction as a civil court. The High Court hearing a reference under that section did not exercise any appellate, revisional or supervisory jurisdiction over the Tribunal but acted purely in an advisory capacity, on a reference which properly came before it under section 66(1) and (2) of the Act of 1922 (the provisions corresponded to section 256(1) and (2) of the Act of 1961). It was held that it is of the essence of such a jurisdiction that the court can decide only question which are referred to it and not any other questions. When a question of law is neither raised before the Tribunal nor considered by it, it would not be a question arising out of its order. It was held that all that section 66(1) required was that the question of law which was referred to the court for decision and which the court is to decide must be the question which was in issue before the Tribunal. We do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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