9911796707
TMI Blog2001 (1) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... in throughout the relevant period which fell within the realm of the respective assessment years 1953-54 to 1969-70. During this period, the assessee received certain payments in the bank accounts in Britain in each year from the companies on the board of which members of the Leiners families were in controlling positions and the assessee has utilised that amount for meeting his expenses. Apart from the three companies, namely, P. Leiner and Sons Ltd., P. Leiner and Sons (Wales) Ltd. and Treforest Chemical Co. Ltd. (hereinafter called the three "Leiner companies"), there was a fourth company, namely, Leiner Overseas Ltd. (hereinafter called "the Overseas"), which was incorporated on or about October 10, 1952, as a private company. This was a subsidiary of P. Leiner and Sons Ltd. The assessee and two persons, namely, Hari Singh and Vijay Singh, were directors of the Hira Crushing (India,) Company Ltd. incorporated on or about January 19, 1953. This was a company of the assessee and the members of his family and relations inasmuch as all the shares of the company were held by the assessee and his near relations of Rao Raja Hanut Singh. Hari Singh, the son of the assessee, was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Officer was further added to the taxable income of the assessee by way of income from undisclosed sources. These additional sums were for the assessment year 1954-55 and for the assessment years 1959-60 to 1966-67, as per the table showing a summary of findings in the assessment order dated June 16, 1972. In the said table, separate amount received and treated as income of the assessee for each assessment year from 1952-53 to 1969-70 was also detailed. The assessee aggrieved by the order passed by the Income-tax Officer appealed before the Appellate Assistant Commissioner against the assessment of each year. The Appellate Assistant Commissioner by his order dated January 22, 1973, agreed with the explanation offered by the assessee and held that no element of income was there in the deposits made in the account of the assessee by the three Leiner companies with whom the assessee or Hira Crushing Co. Ltd. had no business connection whatever. The Appellate Assistant Commissioner also found that in the years in which the assessee has overspent the deposits as found by the Assessing Officer, for such excess expenses sources has been properly explained by the assessee, firstl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal evidence is quite different as stated above. We indicated to learned counsel for both sides that we may proceed in the first instance to hear them on the basis of the evidence available on record and if we should feel that additional evidence was required to enable us to pronounce the judgment or for any other substantial cause, we may consider admitting fresh evidence. Having heard the parties, we have not. found it necessary to admit any fresh evidence and we have not done so." On the merits of the case, the Tribunal recorded a categorical finding that the material on the record does not show that the receipts in question were of the nature of commission and taxable income. Thus, the Tribunal reached its conclusions despite noticing that the burden of proving, when the source of receipt is disclosed, that it is taxable income is on the Department, independent of the question of burden of proof. This is apparent from the following statement in the order: "However, in the present case, it is not necessary to decide the issue merely from the angle said burden has been discharged or not. We are of the opinion that any finding that material on the record does not show the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed to adjudicate the rights of the litigating parties as a judicial or quasi-judicial Tribunal would exercise such discretion in that manner. It is seen from the order of the Tribunal that apart from pleading interest of justice no other cause was pleaded for taking additional evidence on record. In order to raise a question of law which would entitle a party before the income -tax appellate authority to seek mandamus for reference of such question to the High Court for seeking its decision thereon is inhibited by inherent limitation. Firstly, a question which is not a question of law but a question of fact cannot be made the subject-matter of reference. Secondly, even if it be a question of law, if the answer is evident or is settled by the decisions of the Supreme Court, such questions need not be referred to the court for its opinion. We are of the opinion that this application must fail on both counts. Firstly, there is no dispute about the fact that a litigant cannot claim as a matter of right to lead additional evidence before the appellate authority and the power of the Tribunal in the matter of taking additional evidence on record is circumscribed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e statutes in clothing the appellate courts or Tribunal with power to allow parties to lead additional evidence and does not give rise to any new principle than what has been settled by a long chain of decisions of various High Courts, the Privy Council as well as of the Supreme Court. The principle is well settled. This expression finds place in Order 41, rule 27(1)(b), of the Code of Civil Procedure which is a provision governing the authority of the appellate courts to permit any party to lead any additional evidence, which otherwise is prohibited, in the circumstances narrated therein. Like rule 29 referred to above, Order 41, rule 27(1)(b), of the Civil Procedure Code, reads as under: "27. Production of additional evidence in appellate court.-(1) The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, in the appellate court. But if-. . . (b) the appellate court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial cause, the appellate court may allow such evidence or document to be produced, or witness to be examined." The language itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial on record for finding whether it is possible to pronounce judgment on the basis of existing material. The Supreme Court opined that the discretion exercised by the lower appellate court to be vitiated for having failed to take into consideration the essential requirement of invoking Order 41, rule 27(1)(b). Again in Natha Singh v. Financial Commissioner, Taxation, AIR 1976 SC 1053, the court said: "The true test to be applied in dealing with applications for additional evidence is whether the appellate court is able to pronounce judgment on the materials before it, without taking into consideration the additional evidence sought to be adduced." Thus, reiterating the principle enunciated in Arjun Singh alias Puran's case, AIR 1951 SC 193, as the court did not experience difficulty in rendering the judgment on the basis of the material already before it did not allow the application for leading additional evidence in support of this case by the appellant. In Syed Abdul Khader v. Rami Reddy AIR 1979 SC 555, the court said: "It is well established that Order 41, rule 27 of the Civil Procedure Code, does not confer a right on the party to produce additional evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fidavit furnished by the assessee's grandmother-in-law and assessed the amount as the assessee's income from undisclosed sources. The finding of the Tribunal was a finding of fact and no question of law arose for reference and the application under section 256(2) is, therefore rejected." In the like situation a Bench of the Delhi High Court in R. Dalmia v. CIT [1978] 113 ITR 522, discussing the propositions in connection with the provisions of section 66(2) of the Indian Income-tax Act, 1922, corresponding to the provisions of section 256 in the Act of 1961, said: "The Appellate Tribunal has a discretion to decide whether to admit additional evidence or not and, in the absence of any suggestion that it had acted on any wrong principle, no question of law can arise from the Tribunal's decision to admit additional evidence and remand the case back to the Appellate Assistant Commissioner to give the assessee an opportunity to explain the additional evidence and record such further evidence as the assessee might wish to produce and forward it to the Tribunal." We are of the opinion that in view of the principles enunciated aforesaid, and keeping in view the facts narrated above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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