AI Drafter 
TaxTMI 
TaxTMI 
2004 (9) TMI 97
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....of India being annexures E and E-1, which are binding on the Department were suppressed by the Department and were not placed before the court and if these documents were produced, the court would not have drawn the inference that has been drawn adverse to the assessee. He then contended that the amount was not a cash credit but was share capital and as such it would not come within section 68 of the Act and thus the whole exercise of jurisdiction by the income-tax authority was incompetent and this court had omitted to note this important material fact. In support of his contention, Mr. Banerjee had relied on the decisions in CIT v. Hunger-ford Investment Trust Ltd. [1935] 3 ITR 188 (Cal); CIT v. Bansi Dhar and Sons [1986] 157 ITR 665 (SC); Additional CIT v. Hasmat Rai Raj Pal [1988] 170 ITR 191 (All); CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589 (SC); CIT v. Kundan Investment Ltd. [2003] 263 ITR 626 (Cal) and Hindustan Tea Trading Co. Ltd. v. CIT [2003] 263 ITR 289 (Cal). Opposite party/Department's submission: On the other hand, Mr. Deb contended that the review is not maintainable. In support of his contention, he relied on CIT v. Hungerford Investment Trust....
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....the Commissioner of Income-tax (Appeals) disallowed Rs. 19,88,750 under section 68 on the basis of the findings of fact arrived at by him relying on the materials produced. On appeal, the Tribunal had held that since these were paid by cheques, therefore, this could not have been disallowed. In the facts and circumstances of the said case, we had answered question No. 1 in the affirmative, in favour of the Revenue and question No. 2 in the negative against the assessee. Points for consideration: In this review application, two hurdles have been raised by way of preliminary objection by Mr. Deb, namely, first, the High Court has no jurisdiction to review its order passed on reference; second even if it is assumed for argument's sake that the High Court has jurisdiction to review, it can be exercised within the limited scope of review as available within the scope of the 1961 Act and not beyond; third, in exercise of such jurisdiction to review the High Court cannot correct any mistake which is not apparent on the face of the record but requires long drawn argument to establish the same in respect whereof two opinions are possible. If these hurdles are crossed then we may lo....
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.... of adjournment, restoration of matters dismissed in default, extension of time for filing paper book, etc. But it does not include grant of stay of recovery of taxes, etc. It was so held in CIT v. Bansi Dhar and Sons [1986] 157 ITR 665 (SC). In CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589 (SC), it was held that the High Court hearing a reference does not exercise appellate, revisional or supervisory jurisdiction. It acts purely in an advisory capacity. It can decide only questions referred to it and not any other question. Thus, we find that the High Court while exercising jurisdiction under section 256 has no power to review and the limited power within which the High Court can exercise power of rectification is very limited. In CIT v. Hungerford Investment Trust Ltd. [1935] 3 ITR 188 (Cal), this court had held that the jurisdiction conferred upon this court under section 66 of the 1922 Act (now section 256) was a special jurisdiction and forms no part of the court's original or appellate jurisdiction. Its functions are confined strictly to the disposal of reference on points of law. In Additional CIT v. Hastnat Rai Raj Pal [1988] 170 ITR 191 (All), the Allahabad....
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....ion has been observed to be doubtful in Bengal Iron Corporation v. CTO [1993] 90 STC 47 (SC). In any event circulars cannot be utilised for altering the provisions of the Act. It is normally used for the purpose of giving effect to the provisions of the Act. Therefore, omission to consider the circular cannot afford a ground for review to the assessee. In Hindustan Aeronautics ltd. v. CIT [2000] 243 ITR 808, it was held that the circulars or instructions given by the Board are no doubt binding in law on the authorities under the Act but when the Supreme Court or the High Court has declared the law on the question arising for consideration, it will not be open to a court to direct that a circular should be given effect to and not the view expressed in a decision of the Supreme Court or the High Court. Thus, the existence of the circular will not enable the court to retract or reverse its decision when it feels that the law is otherwise. Therefore, the omission to consider this circular would not be a ground for review. Then A again, how far circulars would help the assessee/applicant is a question, which requires to be established by long drawn argument and with regard to which i....
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....und on fact that the transaction could not be established as a subscription to share capital, though admitted to be so shown, then the entries made in the books of account would not be a share capital. If it is not a share capital, then it would definitely be an entry in the book, which is a credit entry and a credit entry to be treated as cash since it does not form part of the share capital on account of absence of proof of the three ingredients with regard to the identity of the subscriber, its creditworthiness and the genuineness of the transaction. In the present case, on the facts, it was apparent that the assessee failed to establish these three ingredients. Therefore, it is nothing but cash credit. Thus, this ground also is not a ground for review. Effect of non-requirement of furnishing PAN for transaction below 20,000: If the transaction is within Rs. 20,000, in that event, the subscriber is not supposed to disclose PAN. But that does not mean that when section 68 is resorted to the burden that lay on the assessee would be discharged simply on the disclosure of the list of subscribers without establishing his creditworthiness even if the identity is established. The....