1997 (4) TMI 39 - HC - Income Tax

High Court upholds Tribunal decision, rejects Revenue application under Income-tax Act section 256(2).

The High Court dismissed the Revenue's application under section 256(2) of the Income-tax Act, upholding the Tribunal's decision. The Tribunal's findings ... Reference, Revision, Prejudicial, Question Of Law Issues Involved: Application u/s 256(2) of Income-tax Act, 1961 for reference of questions of law to High Court regarding correctness of assessment order and jurisdiction of Commissioner u/s 263.Assessment Order Correctness: The assessing authority completed the assessment for the year 1988-89, assessing income at Rs. 61,160, differing from the declared Rs. 41,060 by the assessee. The Commissioner of Income-tax, Jodhpur, found the assessment erroneous and prejudicial to Revenue's interests u/s 263 due to inadequate inquiries by the Income-tax Officer, remanding the case for fresh assessment.Tribunal's Findings: The Income-tax Appellate Tribunal, Jaipur, allowed the appeal by the assessee, stating that the Income-tax Officer had conducted proper inquiries before making additions to the declared results. The Tribunal found no justification for the Commissioner's interference, as the assessment was based on thorough examination of trading results, salary payments, and interest payments to partners' relatives.Legal Conclusion: The Tribunal's findings were factual, not raising any legal questions. Hence, the Tribunal rightfully rejected the Revenue's application u/s 256(1) of the Act. As no legal issues arose from the Tribunal's judgment, the High Court dismissed the Revenue's application u/s 256(2) of the Income-tax Act, upholding the Tribunal's decision.