C.I.T., CENTRAL, JAIPUR vs. BHERU LAL SURANA

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR J U D G M E N T (1) D.B. INCOME TAX APPEAL NO.75/2010 (CIT., CENTRAL, JAIPUR VS. BHERU LAL SURANA) (2) D.B. INCOME TAX APPEAL NO.04078/2010 (CIT., CENTRAL, JAIPUR VS. JAI PAL SURANA) (3) D.B. INCOME TAX APPEAL NO.04115/2010 (CIT., UDAIPUR VS. JAI PAL SURANA) (4) D.B. INCOME TAX APPEAL NO.04117/2010 (CIT., CENTRAL, JAIPUR VS. BHERU LAL SURANA) (5) D.B. INCOME TAX APPEAL NO.36/2011 (CIT., CENTRAL, JAIPUR VS. BHERU LAL SURANA) (6) D.B. INCOME TAX APPEAL NO.37/2011 (CIT., CENTRAL, JAIPUR VS. BHERU LAL SURANA) (7) D.B. INCOME TAX APPEAL NO.38/2011 (CIT., CENTRAL, JAIPUR VS. JAI PAL SURANA) (8) D.B. INCOME TAX APPEAL NO.39/2011 (CIT., CENTRAL, JAIPUR VS. SMT. GEETA DEVI) (9) D.B. INCOME TAX APPEAL NO.40/2011 (CIT., CENTRAL, JAIPUR VS. BHERU LAL SURANA) (10) D.B. INCOME TAX APPEAL NO.41/2011 (CIT., CENTRAL, JAIPUR VS. BHERU LAL SURANA) Date of Judgment : 15.03.2011 HON'BLE MR. JUSTICE A.M. SAPRE HON'BLE MR. JUSTICE C.M. TOTLA Mr. K.K. Bissa, for the appellant. BY THE COURT : (PER HON'BLE SAPRE,J.)

2 The decision rendered in this appeal shall govern the disposal of other connected appeals being DB ITA Nos. 04078/2010, 04115/2010, 04117/2010, 36/2011, 37/2011, 38/2011, 39/2011, 40/2011 and 41/2011 because all these appeals more or less involve similar points and secondly arise between the same parties and lastly all were disposed of by one order by the Tribunal. 2. This is an appeal filed by the Income Tax Department under Section 260-A of the Income Tax Act against an order dated 17.11.2009 passed by I.T.A.T., Jodhpur Bench, Jodhpur (for short called Tribunal) in I.T.A. No.126/JU/2009 and Cross Appeal No.109/JU/2009 for the period AY 2001-02. 3. By the impugned order, the Tribunal partly allowed the appeal of Revenue and cross-objection of the assessee and to some extent modified the order of Commissioner of Appeals impugned in those appeals / cross objections on the issues raised in this appeal. 4. So the question that arises for consideration in these appeals is whether it involves any substantial question of law within the meaning of Section 260-A ibid? 5. Having heard the learned counsel for the appellant and on perusal of record of the case, we are inclined to dismiss the appeal in limine as in our opinion the appeal does not involve any substantial question of law as is required to be made out within the meaning of Section 260-A ibid. 6. The issue in all these appeals essentially relates to addition/deletion of certain amount (it varies in each appeal) done on the basis of re-determination of G.P. ( % of Gross Profit Rate) in the yearly turn-over of the assessee and further in each case in relation to giving of set off for determining the net turn over. The A.O. did not accept the explanation offered by assessee fully and accordingly added the sum claimed in his total income. The CIT (Appeal) upheld it in part and the Tribunal by impugned order further interfered to

3 some extent and granted partial relief to both. In other words, the CIT (Appeal) and Tribunal partially accepted the factual explanation coupled with the evidence tendered by assessee in relation to the impugned additions made by A.O. and held that since the same have been properly explained in part and hence, the disputed sum has to be given adjustment to some extent. 7. As observed supra, the basic questions which were debated before the A.O., CIT (Appeal) and Tribunal were in relation to addition of certain amount due to variation in % of G.P. Rate and grant of set-off. This question was essentially based on factual aspect and the explanation offered by Assessee as to why a particular rate of G.P. Rate should be applied. Keeping in view the scope, extent of our jurisdiction and parameters laid down, we are not able to notice any legal error in the reasoning and conclusion of Tribunal. 8. In fact perusal of the impugned finding would go to show that Tribunal did examine the explanation offered by assessee in detail and then recorded a finding for its acceptance in part. Such finding when challenge in appeal does not constitute a substantial question of law within the meaning of Section 260A ibid in an appeal arising out of such order. In other words, this Court in its appellate jurisdiction 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 assessee and which found acceptance to the Tribunal is good or bad, or whether it was rightly accepted, or not. It is only when the factual finding recorded had been found to be entirely dehors 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 else not. Such does not appear to be a case of

4 this nature though argued. 9. Learned counsel for the Revenue contended that firstly Tribunal erred in accepting the explanation offered by assessee. His second submission was that what was offered by the assessee was not an explanation and hence it should not have been accepted. His third submission was to persuade us through factual scenario of the explanation to contend that it cannot be taken as satisfactory explanation for deleting the addition made by Assessing Officer and in last, he contended that finding recorded by Tribunal is perverse. We do not agree to any of these submissions for more than one reason. 10. In our opinion, 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 assessee. Thirdly, once the explanation is found acceptable though inpart by appellate authorities, then in such event, a finding recorded on such explanation is binding on the High Court. 11. We thus, do not find any merit in the appeal. It fails and is dismissed in limine by holding that it does not involve any substantial question of law. No costs. [C.M. Totla ], J. [A.M. Sapre],J. /Anil/