THE COMMISSIONER OF INCOME TAX vs. M/S CENTRAL STORES

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ITR/26/2000HC KeralaKLHC01015321200021 February 2008Bench: HONOURABLE MR.JUSTICE T.R.RAMACHANDRAN NAIR,HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no question of law arose from the Tribunal's finding on the facts of the case. The Tribunal had made a factual finding that there was an available cash balance with the assessee, and it had accepted the assessee's explanation for this balance. The Revenue's argument that the cash balance could only be introduced for assessment year 1985-86 was based on a factual premise that the Tribunal had already addressed and found acceptable in favor of the assessee. Since the Tribunal's decision was based on its appreciation of facts and the explanation provided by the assessee was found acceptable by it, the High Court declined to interfere. The question referred to the High Court was answered against the department and in favor of the assessee.

What were the facts?

This case involves a reference to the High Court of Kerala concerning an addition made by the Revenue. The dispute centers on a difference between the cash balance shown in the assessee's cash book and its Balance Sheet. The Income Tax Appellate Tribunal (ITAT) had previously found that there was an available cash balance with the assessee due to an addition made in the assessment for the assessment year 1982-83. The Revenue contended that if this cash balance was to be introduced, it should only be for the assessment year 1985-86, as accounts were closed for subsequent years. The ITAT, however, accepted the assessee's explanation regarding the cash balance.

What were the issues?

1. Whether a question of law arises from the Tribunal's finding on facts regarding the availability of cash balance with the assessee, considering the assessment year for which it could be introduced. The Assessee's contention: The assessee argued that the Tribunal's finding on facts, accepting the explanation for the cash balance, was acceptable. Therefore, no question of law arose for consideration by the High Court. The Revenue's contention: The Revenue argued that the cash balance, if introduced, should only be for the assessment year 1985-86 because accounts were closed for subsequent years. The Revenue implicitly challenged the Tribunal's acceptance of the explanation for the cash balance and its consequential treatment.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR THURSDAY, THE 21ST FEBRUARY 2008 / 2ND PHALGUNA 1929 ITR.No. 26 of 2000() -------------------- (RA 232/COCH/98 IN ITA NO. 1042/COCHIN/91 OF ITAT,COCHIN BENCH,COCHIN) APPLICANT: ----------- THE COMMISSIONER OF INCOME TAX, TRIVANDRUM. BY ADV. SRI.P.K.R.MENON(SR.),SR.COUNSEL FOR IT SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENTS: ------------- M/S. CENTRAL STORES, KOTTAYAM. BY ADV. SRI.JOHN RAMESH K.I.JOHN THIS TAX REFERENCE HAVING BEEN FINALLY HEARD ON 21/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

C .N. RAMACHANDRAN NAIR & T.R. RAMACHANDRAN NAIR, JJ. -------------------------------------------- I.T.R. No. 26 OF 2000 -------------------------------------------- Dated this the 21st day of February, 2008 JUDGMENT C.N. Ramachandran Nair,J. Heard standing counsel for the applicant and counsel appearing for the respondent. The question referred to us pertains to addition on account of difference between the cash balance shown in the cash book and in the Balance Sheet. We find that the Tribunal has given a finding that there is cash balance available with the assessee on account of addition made in the assessment for the year 1982-83. According to counsel, since accounts were closed for subsequent years, it could be introduced only for the assessment year 1985-86. Since the tribunal on facts found that the explanation was acceptable, we do not think any question of law arising from the finding of Tribunal on these facts. We therefore answer the question referred against the department and in favour of the assessee. A copy of this judgment shall be forwarded to the Income Tax

2 Appellate Tribunal, Cochin Bench, Cochin. (C.N.RAMACHANDRAN NAIR) Judge. (T.R.RAMACHANDRAN NAIR) Judge. kk

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