Unsigned draft agreement and incomplete inquiry were insufficient to disturb factual findings sustaining the tax addition.

An unsigned draft agreement found during survey, without examination of the scribe or witnesses and without the inquiry being carried to its logical end, was treated as insufficient proof of an executed transaction. The first appellate authority and the Tribunal relied on surrounding factual circumstances, including separate dealings with third parties and the limited nature of the transaction with United Special Ispat Limited, to hold that the draft agreement was only a starting point for inquiry. In the absence of supporting evidence, those factual findings were not perverse and the addition made by the Assessing Officer was left undisturbed.

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Issues: Whether the findings of the first appellate authority and the Tribunal that the draft agreement to sell was not executed, signed or implemented were perverse so as to justify interference with the addition made by the Assessing Officer.

Analysis: The Assessing Officer relied on an unsigned draft agreement found during survey but did not examine the scribe or witnesses, and the investigation was not carried to its logical end. The first appellate authority and the Tribunal relied on several factual circumstances, including separate transactions with third parties and the limited nature of the transaction with United Special Ispat Limited, to conclude that the draft agreement was only a starting point for inquiry and not proof of an executed transaction. In the absence of further investigation and supporting evidence, the factual findings could not be characterized as perverse.

Conclusion: The findings of fact were upheld and the addition was not interfered with.

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