Kanaiyalal Mirchandani vs. Commissioner Of Income Tax Central Rev

However, on hearing the learned counsel for the parties and perusing the aforesaid questions of law and going through the record, we find that the aforesaid questions are not questions of law and are purely questions of fact which cannot be gone into by this court in this appeal. We therefore refuse to go into the same or answer the same as in our considered opinion, questions of fact cannot be decided by this court by interfering in the finding of the fact recorded by the authorities below.

The learned counsel for the appellant however submits that two other questions of law arise which may be framed and answered. It is submitted by the learned counsel for the appellant that a survey in the business premises of the assessee was conducted by the authorities on 30.09.1994 and during the course of survey an excess stock of Rs.1,53,320/- was found under section 133-A of the Income Tax and the appellant has agreed to show the aforesaid excess stock found as additional income. It is submitted that another survey under section 133-A of the Act was again conducted on 26.10.1994 during which the appellant disclosed the excess stock of Rs.4,51,198/- as increase on the regular income.

After the aforesaid surveys, the appellant filed a return and while doing so he has duly showed addition of Rs.1,53,320/- in taxable income. This aspect has been considered by the Assessing Authority in his order and he has observed as under:- “A survey u/s 133 A was conducted in the business premises of the assessee by the assessing officer on 30.09.1994 and stock was found in excess of Rs.1,53,320/-. Thereafter, another survey u/s 133-A was conducted in the premises by ADIT (Inv.) on 26.10.1994 and stock was found in excess of Rs.4,51,198/-. During the course of survey u/s 133 A on 30.09.1994 and 26.10.1994 the assessee has agreed to show the excess stock found as income over and above the regular income in the return of income for assessment year 1995-96 but in the return of income filed the assessee has shown excess stock found during survey u/s133 A on 30.09.1994 at Rs.1,53,320/-.”

It is submitted that though the assessee had already included Rs.1,53,320/- in his return, the assessing authority while computing the total income of the appellant again included a sum of Rs.1,53,320/- as income from other sources in the total income assessed by the authority by adding Rs.1,53,320 and Rs.4,51,198/-. It is submitted that it is therefore apparent that the authorities have added an amount of Rs.1,53,320/- twice for the purpose of computing the total income of the appellant.

It is submitted that the appellant has specifically taken up this issue as ground no. 19 in the appeal filed by him before the CIT and as ground no. 15 before the ITAT but neither of the two authorities have adverted to this issue. It is submitted that in view of the aforesaid facts it is apparent on the face of the record that the appellant has been subjected to tax twice in respect of Rs.1,53,320/-. It is submitted that impugned orders suffer from perversity which is apparent from the face of the record giving rise to a question of law for adjudication by this court.

The learned counsel for the appellant further contends that the appellant has been assessed to tax in respect of the amount of Rs.2,90,800/- invested by him for constructing a house. He further submits that as per the survey conducted by the department itself, the aforesaid amount of Rs.2,90,800/- for constructing the house was invested by the appellant between the year 1992-94. It is submitted that in view of the provisions of section 69 of the Income Tax Act, the amount invested by the appellant for the financial year immediately preceding the year of assessment could only have been taken into consideration by the assessing authority but the authority totally ignoring the fact that as per their own survey report the amount that had been invested by the appellant in a span of three years i.e. the financial year prior to the year preceding the year of assessment, have included the same for the purpose of assessing the taxable income of the appellant.

It is submitted that this is a pure question of law which was required to be considered by the CIT as well as ITAT however, inspite of the fact that the appellant has specifically raised the this issue in ground nos. 15 and 17 of the appeal before the CIT and ITAT the same has not been decided. It is submitted that in such circumstances, as the aforesaid two issues, though raised, were not considered by the authorities concerned, a question of law arises for adjudication and the matter deserves to be remitted back to the authorities for readjudication.

The learned counsel appearing for the respondent per contra submits that the aforesaid aspects have been considered by the authorities in the impugned order and therefore the aforesaid questions which are pure questions of fact need not be gone.

Having heard the learned counsel for the parties and having perused the orders passed by the CIT as well as ITAT and the grounds of the appeal which have been filed by the appellant, we find that the aforesaid two issues, though raised by the appellant, have not been considered by either of the authorities. In the circumstances, we are of the considered opinion that the following question of law arise for adjudication:- “(I) Whether the authorities have committed perversity in not considering the issue of taxing an amount of Rs.1,53,320/- twice and of adding investment made by the appellant prior to the financial year immediately preceding the year of assessment though raised by the appellant before the authorities in the ground of appeal thereby giving rise of a question of law for adjudication ?”

Having heard the learned counsel for the parties on the aforesaid question of law and having perused the record, we are of the considered opinion that apparently the appellant has raised the aforesaid issues before the authorities but there is no application of mind or adjudication on these issues by the authorities. At the same time it is also apparent that the issue regarding adding the income twice and section section 69 of the Income Tax Act can only be decided by reappraising the record and the facts. We therefore of the considered opinion that while the question of perversity is answered in favour of the appellant, the case deserves to be and is hereby remitted back to the assessing authority for re-adjudication/assessment in respect of only the aforesaid issues.

The appeal is accordingly allowed and the matter is remitted back to the assessing authority to the extend indicated above. (RAVI SHANKAR JHA) JUDGE (RAJENDRA MAHAJAN) JUDGE MSP