M/S G.R.CONTRACTORS vs. I.T.O.WARD-1,SRIGANGANAGAR

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR J U D G M E N T INCOME TAX APPEAL NO.87/2010 M/S. G.R. CONTRACTORS Vs. ITO, WARD -1, SRI GANGANAGAR Date of Judgment : 7.10.2010 HON'BLE MR. JUSTICE A.M. SAPRE HON'BLE MR. JUSTICE DINESH MAHESHWARI Mr. Suresh Ojha, for the appellant. BY THE COURT : (PER HON'BLE SAPRE,J.) 1. This is an intra court appeal filed by the Assessee under Section 260-A of the Income Tax Act against an order dated 26.6.2009 passed by I.T.A.T., Jodhpur (for short called Tribunal) in I.T.A. No.24/JU/2009 for the period AY 2003-2004. 2. By the impugned order, the Tribunal allowed the Revenue's appeal and reversed the order of Commissioner of Appeals on the issue raised in this appeal. 3. So the question that arises for consideration in this intra court appeal is whether it involves any substantial question of law within the meaning of Section 260-A ibid? 4. 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.

2 5. The issue relates to certain additions which were made by the A.O. in the course of assessment proceedings initiated against the assessee under the Act. The A.O. did not accept the explanation offered by assessee and treating the said amount to be that of assessee added in his total income by taking recourse to Section 68 ibid. The CIT (Appeal) reversed it but the Tribunal set aside the order of CIT (Appeal) and restored that of A.O. in so far as it related to deletion made by CIT (Appeal). In other words, the Tribunal did not accept 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 has not been properly explained and hence, they have too be included by adding the same while computing the total income of the assessee. 6. In substance, the issue involved in the appeal was in relation to addition/deletion of Rs.94,900/- in the hands of assessee in the assessment year under consideration The AO did not find explanation offered by assessee to be plausible and accordingly added the amount treating it to be an income from unexplained source added the same by taking recourse to Section 68 ibid. It was reversed by CIT (Appeal) but again reversed by Tribunal in an appeal filed by the Revenue when appeal filed by Revenue was allowed. This is what Tribunal held by not accepting the explanation of assessee:- “On going through the orders passed by the departmental authorities, undisputedly it is noticed that the creditor is Smt. Saroj Kumar. The assessee is not able to produce the evidence of capacity of said Smt. Saroj Kumari nor produce the said Smt. Saroj Kumari for examination by the Assessing Officer, nor the affidavit of such Saroj Kumari confirming the transaction andd disclosing her credit worthiness as well as copy of returns filed by her or copy of bank account to

3 show that at the relevant time she had sufficient

funds

with

her. Undisputedly, the amount consisted of Rs.75,000/- deposited by cheques and 19,900/- was deposited in cash. Therefore, it is clear that there is no evidence practically from the creditor Smt. Saroj Kumari, nor the bank account copy of said Smt. Saroj Kumari were filed by the assessee. Therefore, the credit of Rs.94,900/- remained unexplained and accordingly made addition u/s 68 of the Act. The ld. CIT(A) is relying on the order of the Tribunal for assessment year 2004- 05 and finding that the Assessing Officer has traveled beyond the direction of the Tribunal is not convincing for the reason that the present assessment year is 2003-04 whereas the Tribunal order laid down by the ld. CIT(A) is for assessment year 2004-05. Accordingly, we are of the considered view that the decision reached at by the ld. CIT(A) is not sustainable for legal scrutiny, hence the same is hereby set aside by substituting that of the Assessing Officer order on this issue.” 7. Learned counsel for the appellant (assessee) contended that firstly Tribunal erred in not accepting the explanation offered by Assessee in relation to his source of income. His second submission was that assessee had offered plausible and good explanation and hence it should have been accepted by A.O. and lastly learned counsel made sincere attempt on his part after taking us through factual scenario of the explanation and contended that it can be taken as satisfactory explanation for deleting the addition made by Assessing Officer. We do not agree to this submission for more than one reason. 8. In the first place, what is involved in the case is a pure

4 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 to be not worthy of acceptance by an appellate court (Tribunal in this case), then in such event, a finding recorded on such explanation is binding on the High Court. 9. Perusal of impugned finding quoted supra would go to show that Tribunal did examine the explanation offered by assessee in detail and then recorded a finding for its not acceptance. Such finding when challenged does not constitute a substantial question of law within the meaning of Section 260A ibid in an appeal arising out of such order. 10. In our opinion, therefore, once the Tribunal did not accept the explanation of assessee and accordingly, added certain additions made by A.O. amounting to Rs.94,900/-, then it would not involve any substantial issue of law as such. 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 did not find 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 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. 11. In our view, no such error could be noticed by us in the impugned order because as observed supra, the Tribunal did go into the details of explanation offered by assessee and then did not find

5 any merit in the explanation. As a consequence thereof, the additions made by Assessing Officer came to be upheld. 12. 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. [Dinesh Maheshwari], J. [A.M. Sapre],J. /Anil/