Commissioner of Income Tax vs Smt. Chandra Boob

Munishwar Nath Bhandari, J.—Revenue has preferred this reference application under the provisions of Section 256(2) of the IT Act, 1961. The Tribunal had refused to make reference of any of the questions, vide its order dt. 28th Jan., 1999.

A reference application was filed before the Tribunal under the provisions of Section 256(1) of the IT Act for reference of certain questions to this Court. Those questions were arising out of the order of the learned Tribunal vide its order dt. 25th Aug., 1998 in relation to the block asst. yrs. 1986-87 to 1996-97. Following questions were sought for reference:

(1) Whether on the facts and in the circumstances of the case the Tribunal was justified in law in altogether ignoring the circumstantial evidence and deleting the addition of Rs. 2,51,056 made as undisclosed income for asst. yr. 1991-92 on account of unexplained investment in gold ornaments, etc.?

(2) Whether on the facts and in the circumstances of the case the Tribunal was justified in law in deleting the addition of Rs. 45,525 made as undisclosed income for asst. yr. 1991-92 on account of unexplained investment in silver articles?

(3) Whether on the facts and in the circumstances of the case the Tribunal was justified in law in holding that the statement of the assessee''s husband regarding surrender on account of unexplained investment in construction of house at 115 Central School Scheme, Jodhpur recorded at the time of search is to be ignored?

(4) Whether on the facts and circumstances of the case the Tribunal was justified in law in deleting the addition of Rs. 3,43,625 out of addition of Rs. 5,00,000 made on account of unexplained investment in construction of house at 115, Central School Scheme, Jodhpur?

(5) Whether on the facts and in the circumstances of the case the Tribunal was justified in law in directing the AO to ignore the statements recorded at the time of search in respect of surrender made with reference to incriminating documents, while setting aside for fresh consideration the addition of Rs. 48,880?

(6) Whether on the facts and in the circumstances of the case the Tribunal was justified in law in altogether ignoring the circumstantial evidence and deleting the addition of Rs. 5,62,000 made on account of undeclared payments made for the purchase of immovable property?

(7) Whether on the facts and in the circumstances of the case the Tribunal was justified in law in deleting the addition of Rs. 87,000 made on account of unexplained credit and interest thereon, inspite of the fact that the creditor had not been proved by the assessee?

Learned Counsel for the Revenue urged that all the seven questions asked for reference involve a question of law, thus Tribunal ought to have referred those questions to the High Court for its answer. It was thus submitted that the High Court should call for reference of those seven questions by issuing appropriate order to the Tribunal. The ground for seeking reference was also argued by stating that mere disclosure of gold and silver ornaments, investment in construction of house in WT return for asst. yr. 1991-92 were not enough in the facts and circumstances of the present case particularly when the assessment was also open for a scrutiny while computing the block assessment year. The Tribunal had in fact deleted the addition of Rs. 3,43,625 on protective basis. It was lastly urged that undeclared income made for the purpose of immovable property was wrongly deleted though the addition was based on informations. It was thus prayed that looking to the legal issue involved in the present case all the issues involving the question of law need to be call for reference.

Per contra, learned Counsel appearing for the assessee supported the order of the Tribunal and stated that reference was refused by the Tribunal on proper ground thus without there being any legal issue involved in this case, calling for reference from the Tribunal would not be proper.

We have considered the rival submissions of the parties and perused the record.

So far as the first four questions are concerned, those questions pertain to unexplained investment in the silver and gold ornaments and unexplained investment for construction of house No. 115, Central School Scheme, Jodhpur. The substantive additions of all the investments were made in the case of Jethmal Boob which was a separate and individual appeal filed before the Tribunal followed by a, reference application made before the Tribunal u/s 256(1) of the IT Act, however, in the case of Jethmal Boob also learned Tribunal had refused to make any reference while deciding the similar issue. It was found that all the questions asked for reference are based on facts and findings recorded by the Tribunal were after considering material placed on record and also with proper appreciation of facts, therefore, no question can be referred based on finding of facts or needs reappreciation of the facts already taken note of in appeal. It is not a case where the Tribunal had failed to consider the material available on record or passed an order without appreciating the documents. Thus we are of the view that a question cannot be asked for reference of the High Court purely for reappreciation of findings and against the finding recorded by the Tribunal.

The fifth question asked for reference is in regard to the addition of Rs. 43,880 by the AO. The Tribunal has recommended the same for fresh examination before the AO. Thus it cannot be said that any question of law arises on account of setting aside the matter for re-examination. In fact the competent authority can re-examine the matter and will take appropriate view, hence for such a direction no question of law is made out for reference.

So far as question No. 6 is concerned, the same is regarding deletion of addition of Rs. 5,62,000 regarding undeclared payment for purpose of immovable property. This addition was not found to be on the basis of any information or incriminating document at the time of search and seizure. The additions were based purely on the inferences of the AO. The said issue has otherwise been decided by the various Benches of the Tribunal, thus in those circumstances we do not find it to be a referable question. More so when nothing is found on record to show that there exist any incriminating document or information on the basis of which addition can be made.

The last question is regarding addition of Rs. 87,000 on account of unexplained credit interest thereon. The said amount was deleted by the Tribunal on the ground that credit in question was duly mentioned in regular books of accounts and thereby regular books of accounts being outside the scope of assessment of undisclosed income under Chapter XIV-B of the IT Act after the insertion of Explanation u/s 158(BA) of the IT Act and thus a question asked for reference in that regard cannot be said to involve a question of law.

In view of the discussions made above, we do not find any question involves questions of law for our reference. Mainly issues raised by the Revenue for our reference are based on finding of fact or need reappreciation of finding. Other issues are already settled thus in that circumstance it cannot be said that Revenue has made out any case for asking for any questions for our reference. In these circumstances, application preferred by the Revenue for seeking reference is found without merit. Hence the same is dismissed accordingly.