TaxTMI 
TaxTMI 
2007 (2) TMI 185
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.... 2. The relevant facts of this case are that a search operation under section 132 of the Act was carried out in Usha India Ltd. and the assessee is one of the promoters of the said company. During the course of search one agreement to sell marked as AD 46 was seized from the premises of the assessee which was in respect of land situated at Daulatabad Road, Shivana, Gurgaon. In this agreement it has been mentioned that an earnest money of Rs. 34,01,784 will be paid by the transferee to transferor at the time of signing of this agreement and the balance consideration of Rs. 1,36,07,140 would be paid within the maximum period of three months, i.e., up to April 16, 2001. This agreement was duly signed by Mr.Jaswant Rai (vendor) and Sh. Anil Goe....
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....our of the assessee vide the impugned order. 6. It is argued by learned counsel for the Revenue that the impugned order of the Tribunal is liable to be set aside as the Tribunal has failed to appreciate that the agreement was complete after the same was signed by the vendor and the vendee. Secondly, documents were seized from the premises of the assessee and it was for the assessee to satisfactorily explain about the documents but the assessee has not given satisfactory explanation about the receipt of earnest money. Further, the assessee has not been able to prove the source of the cash found from his bed room nor could he furnish satisfactory explanation about the same. It is also contended that the order of the Income-tax Appellate Tr....
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.... entries and the contents of the document cannot be held to be raising a substantial question of law. But where it is found that the first appellate court has assumed jurisdiction which did not vest in it, the same can be adjudicated in the second appeal, treating it as substantial question of law. Where the first appellate court is shown to have exercised its discretion in a judicial manner, it cannot be termed to be an error either of law or of procedure requiring interference in second appeal." 10. In another case reported as Panchugopal Barua v. Umesh Chandra Goswami, AIR 1997 SC 1041, it has been laid down that existence of substantial question of law is sine qua non for the exercise of jurisdiction. It was held (page 1044) : ....
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....t nexus between the conclusion of fact and the primary fact upon which that conclusion is based. But, it is not possible to turn a mere question of fact into a question of law by asking whether as a matter of law the authority came to a correct conclusion upon a matter of fact. In Edwards v. Bairstow [1955] 28 ITR 579 (HL), Lord Simonds observed that even a pure finding of fact may be set aside by the court if it appears that the Commissioner has acted without any evidence or on a view of the facts which could not be reasonably entertained. Lord Radcliffe stated that no misconception may appear on the face of the case, but it may be that the facts found are such that no person acting judicially and properly instructed as to the rel....
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....dors only. The learned Assessing Officer has also ignored the fact that the agreement was not complete, in as much as the assessee had not signed the agreement. The reasoning given by the learned Assessing Officer is entirely guess work. It is well settled legal position in respect of Income-tax assessment proceedings that although strict rules of Evidence Act do not apply to Income-tax proceedings, assessments cannot be made on the basis of imagination and guess work. Reference in this respect may be made to the judgment of the hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd. v. CIT [1954] 26 ITR 775 and a host of the Supreme Court and the High Court\qs judgments thereafter on the subject. We, there fore, direct deleti....
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....counsel for the Revenue is with regard to the addition of Rs. 2.5 lakhs on account of cash amounting to Rs. 3,76,800 found in the bed room of the assessee at the time of search. 15. The assessee has not disputed this recovery. However, the case of the assessee is that this represented cash remaining from the withdrawal from his bank account from time to time and a sum of Rs. 2 lakhs was received on December 4, 2000 by cheque No. 345947 and the assessee has furnished cash flow statement to this effect also. 16. This cash flow statement furnished by the assessee was rejected by the Assessing Officer which is on the basis of suspicion that the assessee must have spent the amount for some other purposes. The orders of the Assessing Office....