Deputy Commissioner of Income Tax vs Ratan Corporation

D.A. Mehta, J.—Heard Mr. B.B. Naik, the learned standing counsel for the appellant-Revenue. The following three questions are proposed

by the appellant in all the appeals :

(1) Whether, on the facts and in the circumstances of the case, the Tribunal is right in directing the AO to delete the addition made on account of

on-money"" received by the assessee in the sale of shops which have been admitted in the course of search proceedings, only relying upon the

retraction made by the partner subsequently ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in coming to the conclusion that there is no evidence to prove

that the assessee-firm has received money for sale of shops outside books of account and, therefore, the additions made by the AO are required

to be deleted ?

(3) Whether, on the facts and in the circumstances of the case, the findings recorded by the Tribunal are perverse or not ?

As facts are identical in all the years and the order of the Tribunal is consolidated, all these appeals have been heard together.

The dispute pertains to addition made by the AO towards receipt of ""on-money"" as per details found in para No. 3.6 of the impugned order of

the Tribunal. The CIT(A) confirmed the addition made by the AO. However, the Tribunal has, for the reasons stated in para No. 7 of its impugned

order dt. 12th Nov., 2003, come to the conclusion that the confessional statement made by the one, Shri Pravinbhai Rupawala, was obtained with

undue pressure and, therefore, did not accept the findings recorded by CIT(A). The Tribunal has further found that the statement was retracted by

the said person by making a detailed affidavit. It has further been found by the Tribunal that, in light of the retraction, the AO ought to have made

further inquiries in respect of the shop-owners from whom ""on-money"" is presumed to have been received by the Revenue. It has further found that

the material collected by the Addl. Director of Investigation from the office of Pravinbhai did not contain all papers relatable to the assessee-firm.

The Tribunal has also gone through the statement and found that certain questions pertain to investment details of another firm, namely, Divyapath

Project, wherein Pravinbhai was not a partner. Therefore, on application of the principles laid down by the apex Court in the case of Pullangode

Rubber Produce Co. Ltd. Vs. State of Kerala and Another, , the Tribunal has come to conclusion that the statement could not be relied upon in

the light of the affidavit of retraction and the other evidence on record. Similarly, the Tribunal has also appreciated the statement and affidavit of

another person, one Shri Poonamchand Rupavala, who was also not a partner of the assessee-firm.

It was submitted by Mr. Naik that the Tribunal had failed to take into consideration the other material, namely, seized material on which reliance

had been placed, both by the AO and CIT(A). That the Tribunal had placed undue emphasis on the affidavit of retraction and hence, the impugned

order of the Tribunal, according to Mr. Naik, suffered from vice of perversity.

As noticed hereinbefore, the Tribunal has observed that, in light of the retraction by Shri Pravinbhai Rupawala from the statement, it was the

duty of the AO to make further inquiry in respect of shop-owners. In the assessment order, in para No. 6(1), while referring to the explanation

tendered by the assessee, the AO has referred to one of the loose papers seized during the search and seizure operation u/s 132 of the Act and

recorded that the explanation was in contradiction to the notings in the seized document that these relate to Ratan Market Project containing names

of shop-holders, amounts received from them, construction account with shop-wise details. It is, thus, apparent that when the Tribunal refers to the

duty of the AO to make further inquiries in respect of the shop-owners, it is in this context. The Tribunal has also, as noticed hereinbefore, found

that all the seized papers do not relate to Ratan Market Project. In these circumstances, it is not possible to accept the contention raised on behalf

of the appellant that the Tribunal had omitted to consider other material.

In this regard, the legal position stated by the apex Court in Bhaichand Amoluk and Co. Vs. Commissioner of Income Tax, Bombay City I., is

as under :

The order of the Tribunal must be read as a whole to determine whether every material fact, for and against the assessee, has been considered

fairly and with due care; whether the evidence pro and con has been considered in reaching the final conclusion; and whether the conclusion

reached by the Tribunal has been coloured by irrelevant considerations or matters of prejudice. It is not, however, necessary that the order of the

Tribunal must be examined minutely, sentence by sentence, so as to discover a minor lapse here or an incautious opinion there to be used as a peg

on which to hang an issue of law.

It is equally well-settled that the Court cannot set aside the Tribunal''s finding of fact if there is some evidence to support that finding, even

though the Court itself might have come to a different conclusion upon that evidence. [Reference Commissioner of Income Tax, New Delhi Vs.

D.L.F. United,

Reliance by Mr. Naik on the apex Court decision in case of K.L. Pavunny v. Asstt, Collector (HQ), Central Excise Collectorate, Cochin 1993

(3) SCC 721, with special reference to para No. 20, does not carry case of Revenue any further.

In the circumstances, there being no infirmity in the order of Tribunal, which has arrived at findings of facts after appreciating the evidence on

record, no question of law, much less a substantial question of law, can be said to arise out of the impugned order of the Tribunal. The appeals are

accordingly dismissed.

The Registry is directed to keep a copy of this order in each of these appeals.