COMMISSIONER OF INCOME TAX, RAIPUR vs. PAWAN KUMAR WADHWA

This is an appeal filed by the Revenue (Commissioner of Income Tax) under Section 260—A of the Income Tax Act, against order dated 13.03.2003 passed by Income Tax Appellate Tribunal (for short called ‘the Tribunal’) in ITA No.347/Nag/98. 3. By impugned order, the Tribunal dismissed the appeal filed by the Revenue and upheld the order of the Commissioner of Income Tax (Appeals).

So the question that arises for consideration in this appeal is Whether the Tribunal was justified in dismissing the Revenue’s appeal or/ and whether this appeal involves any substantial question of law within the meaning of Section 260—A ibid.

The issue relates to certain additions which were made by the Assessing Offlcer in the course of assessment proceedings initiated against the assessee under the Act for the assessment year 1994—95. The assessee filed his return of income for Assessment Year 1994-95 declaring total income of Rs.30,870/— and agricultural income of Rs.l,O0,000/—. During the course of assessment proceedings, the A.O. verified the opening stock of Bantulsa Seed shown by the assessee at Rs.6,l6,514/— from trading account filed by the Assessee with the return of income for immediately preceding year i.e. A.Y.l993—94. He found that the said trading account was not complete in respect of Bantulsa Seeds and there was some overwriting in the figure indicated therein. He therefore, examined the matter and held that the opening stock for the year under consideration was only Rs.36,924/— as against Rs.6,16,514/— shown by the assessee in the trading account and added the difference of Rs.5,79,616/— to the income of the assessee on account of unexplained investment in the said stock. With regard to agricultural income of Rs.l,O0,000/-, claimed by the assessee, the A.O. noticed that the expenses claimed in the agricultural account were supported by self made vouchers without any original bills or cash payments. It was also noticed by the A.O. that the payments made to labourers were made in bigger figures in the multiple of Rs.1500/— and hence, he rejected this claim of the assessee also and added the same to the total income of the assessee. Against these additions, the assessee filed appeal before CIT (Appeals). The CIT (Appeals) allowed the appeal'and deleted the addition of Rs.5,79,616/— made by the A.O. with regard to Bantulsa Seed Trading Account and also deleted Rs. 1,00,000/— which was treated by the A.O. as non—agricultural income. The Revenue felt aggrieved by the order of CIT(A), filed appeal to the Tribunal. The Tribunal again in detail went into the factual explanation offered by the assessee as also appreciated the evidence tendered by the assessee to prove the source of additions made by the Assessing Officer i.e. Rs.5,79,616/— and Rs.l,00,000/-.- The Tribunal held that sufficient evidence was brought on record by the assessee to support and substantiate his claim and came to the conclusion that the learned CIT(Appeals) was fully justified in accepting the said claim on proper appreciation of supporting evidence produced by the assessee as well as keeping in View the fact that the stock of Bantulsa Seed for the year under consideration was rightly carried forward by the assessee from the preceding year at Rs.6,l6,514/— and the addition of Rs.5,79,616/— made by the A.O, adopting the said stock at Rs.36,924/- was not warranted and with regard to the agricultural income shown by the assessee, the agricultural incomes shown by the assessee in the preceding years were accepted by the department and nothing was brought on record to disapprove the same. The appeal of the Revenue was accordingly dismissed by the Tribunal. It is against this order, the Revenue has filed this appeal under Section 260—A of the Act.

In substance, the issue involved in the appeal is in relation to addition/deletion of certain amount in the hands of assessee made in the assessment year 1994—95. The A.O. did not find explanation offered by the assessee to be plausible and accordingly added the amount treating it to be an income from unexplained source which as stated supra, was deleted by CIT (Appeals) and upheld by the Tribunal.

Learned counsel for the appellant (Revenue) contended that the Tribunal erred in accepting the explanation offered by the assessee in relation to his income. It was contended that the assessee had failed to offer plausible and good explanation with regard to his income. Learned counsel for the appellant (Revenue) made sincere attempt on his part after taking us through factual scenario of the explanation and contended that it cannot be taken as satisfactory explanation and hence, if the Assessing Officer was right in adding the money in the hands of the assessee, the CIT (Appeals) and the Tribunal were not right in deleting it by accepting the explanation offered by the assessee. We do not agree to the above submissions made by the Revenue.

In the first place, What is involved in this case is a pure question of fact and not any question of law much less substantial question of law. Secondly, this Court cannot again in this appeal undertake the examination of factual issues nor can draw factual inferences on the basis of explanation offered by the assessee. Thirdly, once the explanation is found to be worthy of acceptance by two appellate authorities namely CIT (Appeals) and the Tribunal, then in such event, a finding recorded on such explanation being concurrent in nature is binding on the High Court.

Perusal of the impugned finding would go to show that the CIT (Appeals) and the Tribunal did examine the explanation offered by assessee coupled with the evidence in detail and then recorded a finding for its acceptance. Such finding when challenged, no substantial question of law can be constituted within the meaning of Section 260A ibid in an appeal arising out of such order.

In our opinion, therefore, once the CIT (Appeals) and the Tribunal did not accept the explanation of the appellant (Revenue) and accordingly, deleted the impugned additions made by A.O., then it would not involve any substantial issue of law as such. In other words, this Court in its appellate juri iction under Section 260—A ibid, would not again denovo hold yet another factual inquiry with a view to find out as to Whether explanation offered by Revenue and which did not find acceptance to the Tribunal is good or bad, ‘T or whether it was rightly accepted, or not. It is only when the factual finding recorded had been entirely de hors the subject, or that it had been based on no reasoning, or based on absurd reasoning to the extent that no prudent man of average judicial capacity could ever reach to such conclusion, or that it had been found against any provision of law, then a case for formulation of substantial question of law on such finding can be said to have been made out.

We thus, do not fmd any merit in the appeal. It fails and is dismissed by holding that it does not involve any substantial question of law and even if it is held to involve, the same is answered against the appellant and in respondent’s favour.

No cost. Shyna l- — G. MINHAJUDDIN (Abnay Manohar Sapre) JUDGE ’7 Judge