2001 (9) TMI 6 - SC - Income Tax

Income-tax assessment addition based on 'pure guesswork' challenged; factual finding upheld, remand and reference u/s256(2) set aside

Whether an addition based on 'pure guess work' could be sustained or remanded for re-examination was the dominant issue. The SC held that the tribunal's ... Addition made on the basis of pure guess work - Whether, the Income tax Appellate Tribunal was legally correct in upholding the deletion instead of setting aside the same to the file of the Assessing Officer for the re-examination and opportunity to the assessee? - HELD THAT:- We are unable to agree with the High Court. In the first place, the Tribunal has held that the addition had been made on the basis of pure guess work and this is a matter of fact in respect of which the Tribunal's conclusion is final. In the second place, there was no question of remanding the matter to the Assessing Officer for re-examination of the same question. It is not often that we interfere when the High Court calls for a reference under section 256(2) but when, as here, the question is a pure question of fact, our interference is called for. The appeal is allowed. The order under challenge is set aside. The Supreme Court allowed the appeal and set aside the order challenged by the Revenue. The Tribunal's decision to delete the amount was upheld as it was based on pure guesswork. The High Court's call for a reference on a question of law was disagreed with as the Tribunal's factual conclusion was final. No costs were awarded.