1993 (11) TMI 26 - HC - Income Tax

Court upholds Tribunal decision, directs review on question of law, with costs imposed.

The court found that the Income-tax Appellate Tribunal was justified in deleting the credit in the name of a specific individual as overwhelming evidence ... Cash Credits, Income Tax Act, Question Of Law Issues:1. Whether the Income-tax Appellate Tribunal was legally correct in deleting the credit appearing in the name of a specific individual.2. Whether the order of the Income-tax Appellate Tribunal gives rise to a question of law.Analysis:Issue 1:The case involved a dispute regarding a deposit of Rs. 50,000 in the account books of a private limited company for the assessment year 1985-86. The Income-tax Officer treated the deposit as income from undisclosed sources under section 68 of the Income-tax Act due to discrepancies in the confirmation provided by the depositor, who claimed to be assessed to income tax in a specific circle. However, an inquiry revealed that the depositor did not exist in the mentioned circle and had no past assessment record. Despite additional evidence submitted, the Commissioner of Income-tax (Appeals) upheld the assessment order. The Income-tax Appellate Tribunal later deleted the addition, stating that the identity of the depositor and the source of the deposit were proven with overwhelming evidence presented before the Commissioner of Income-tax (Appeals).Issue 2:The court considered whether the order of the Income-tax Appellate Tribunal raised a question of law. It was argued that the Tribunal did not address all aspects of the addition made by the Income-tax Officer and relied on additional evidence without proper inquiry or findings regarding its admissibility. The court held that while the Tribunal's decisions on facts are generally final, if it fails to consider all essential matters or disregards lower authorities' findings without reason, a question of law arises. Citing precedents, the court determined that the Tribunal's failure to address fresh evidence or reasons for reversing lower authorities' decisions could lead to a question of law. Consequently, the court found that the Tribunal's order did raise a question of law and directed the Tribunal to refer the specific question for the court's opinion.In conclusion, the court allowed the application, directing the Income-tax Appellate Tribunal to prepare a statement of the case and refer the question raised for the court's opinion, with costs assessed at Rs. 150.