COMMISSIONER OF INCOME TAX-24 MUMBAI vs. AHMED ALIJI NANDOLIYA

We have heard learned advocate Ms. Mauna Bhatt for the appellant. We have also gone through the impugned order and the relevant material on record.

Summarizing the relevant facts involved in the appeal with reference to which the aforementioned questions are formulated, the Assessing Officer made addition of Rs.95,27,824/- as undisclosed profit in the income of the respondent-assessee, who was engaged in dairy business and business of cattle breeding, for the block period of 1.4.1991 to 9.1.2001. The addition was on the basis of information gathered during search operation carried out under section 132 of the Act. Relying on the statement of the assessee under section 132(4), the Assessing Officer estimated the net monthly income at Rs.73,666/- on the basis that according to assessee on an TAXAP/899/2011 3/5 average 35 buffalos were brought every month at his farm. The Assessing Officer did not accept the explanation of the assessee that buffalos were at the farm and kept until they become ready for giving milk and the lactation period being 5-6 months, on an average 200 to 250 buffalos were maintained every month at the farm rotated in their lactation period, and that he was getting Rs.20,000/- for a lot of seven buffalos, which was Rs.2,500/- per buffalo and which amount was inclusive of the expenses for fodder, etc. According to the Assessing Officer, the assessee had shown his income on lower side and was not maintaining the books of accounts.

The Commissioner (Appeals) while dealing with the assessee’s appeal accepted the estimation of Assessing Officer that he was right in working out the income and expenditure in respect of 35 buffalos for arriving at the net monthly income. At the same time, according to the Commissioner, the Assessing Officer overlooked that the buffalos were brought for maintenance for limited period and they were made to stay during their lactation period for 5-6 months. However, upon considering the facts, the Commissioner put his own estimation for the entire block period determining the income at Rs.3,50,000/-. He accordingly confirmed the addition to the extent of Rs.3,50,000/- and the balance addition of Rs.91,77,824/- was deleted.

2 The Revenue went in appeal before the Income Tax Appellate Tribunal. The Tribunal considered the issue whether restricting the addition of Rs.95,27,824/- to Rs.3,50,000/- by the Commissioner was justified. After taking into account the order of the Assessing Officer and that of the Appellate Commissioner, the Tribunal recorded its own findings as under: “This is an admitted fact that the assessee was not maintaining any books of account. In reply to question No.9 as reproduced

With above observations, the Tribunal set aside the Commissioner’s order on the issue and directed the Assessing Officer to take assessee's income for the block period in question at Rs.6,60,000/-, instead of Rs.3,50,000/-.

In above view of the matter, there is no gainsaying that the whole issue considered by the Income Tax authorities and finally by the Tribunal was in the realm of facts. The number of buffaloes kept at the farm of the assessee and estimation of expenses and income derived therefrom and the related issues were all questions of fact. The Tribunal arrived at its own assessment and estimation on the basis of facts and figures requiring addition of Rs.6,60,000/- in the total income of the assessee. The conclusion of the Tribunal is reasonable and in no way perverse.

Therefore, neither of the two questions raise any question of law, much less, substantial questions of law for consideration. In absence of any substantial question of law arising, the tax appeal cannot be entertained.

Accordingly this appeal is dismissed. (V.M. SAHAI, J.) (N.V. ANJARIA, J.) (SN DEVU PPS)