TaxTMI 
TaxTMI 
2001 (1) TMI 24
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....t as well as after independence, by the Government of India. The assessee frequently used to visit Britain especially during the polo season. He had bank accounts in Britain throughout the relevant period which fell within the realm of the respective assessment years 1953-54 to 1969-70. During this period, the assessee received certain payments in the bank accounts in Britain in each year from the companies on the board of which members of the Leiners families were in controlling positions and the assessee has utilised that amount for meeting his expenses. 3. Apart from the three companies, namely, P. Leiner and Sons Ltd., P. Leiner and Sons (Wales) Ltd. and Treforest Chemical Co. Ltd. (hereinafter called the three "Leiner companies"), there was a fourth company, namely, Leiner Overseas Ltd. (hereinafter called "the Overseas"), which was incorporated on or about October 10, 1952, as a private company. This was a subsidiary of P. Leiner and Sons Ltd. 4. The assessee and two persons, namely, Hari Singh and Vijay Singh, were directors of the Hira Crushing (India,) Company Ltd. incorporated on or about January 19, 1953. This was a company of the assessee and the members of his fa....
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....excess of the amount received in the bank account, the difference between the receipts in the bank account and excess expenditure estimated to have been made by the assessee by the Income-tax Officer was further added to the taxable income of the assessee by way of income from undisclosed sources. 7. These additional sums were for the assessment year 1954-55 and for the assessment years 1959-60 to 1966-67, as per the table showing a summary of findings in the assessment order dated June 16, 1972. In the said table, separate amount received and treated as income of the assessee for each assessment year from 1952-53 to 1969-70 was also detailed. 8. The assessee aggrieved by the order passed by the Income-tax Officer appealed before the Appellate Assistant Commissioner against the assessment of each year. The Appellate Assistant Commissioner by his order dated January 22, 1973, agreed with the explanation offered by the assessee and held that no element of income was there in the deposits made in the account of the assessee by the three Leiner companies with whom the assessee or Hira Crushing Co. Ltd. had no business connection whatever. The Appellate Assistant Commissioner also....
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.... the stage at which the Appellate Assistant Commissioner passed orders. This is being doubted on behalf of the assessee but we need not go into the truth of the matter because the test in the matter of admitting additional evidence is quite different as stated above. We indicated to learned counsel for both sides that we may proceed in the first instance to hear them on the basis of the evidence available on record and if we should feel that additional evidence was required to enable us to pronounce the judgment or for any other substantial cause, we may consider admitting fresh evidence. Having heard the parties, we have not. found it necessary to admit any fresh evidence and we have not done so." 12. On the merits of the case, the Tribunal recorded a categorical finding that the material on the record does not show that the receipts in question were of the nature of commission and taxable income. Thus, the Tribunal reached its conclusions despite noticing that the burden of proving, when the source of receipt is disclosed, that it is taxable income is on the Department, independent of the question of burden of proof. This is apparent from the following statement in the order: ....
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....on of law unless it can be disputed or found that in exercising that discretion, the Tribunal has ignored some well settled legal principle in the matter of exercise of such discretion or has acted so grossly or arbitrarily that no authority trained and disposed to adjudicate the rights of the litigating parties as a judicial or quasi-judicial Tribunal would exercise such discretion in that manner. 19. It is seen from the order of the Tribunal that apart from pleading interest of justice no other cause was pleaded for taking additional evidence on record. In order to raise a question of law which would entitle a party before the income -tax appellate authority to seek mandamus for reference of such question to the High Court for seeking its decision thereon is inhibited by inherent limitation. 20. Firstly, a question which is not a question of law but a question of fact cannot be made the subject-matter of reference. 21. Secondly, even if it be a question of law, if the answer is evident or is settled by the decisions of the Supreme Court, such questions need not be referred to the court for its opinion. 22. We are of the opinion that this application must fail on both ....
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....tion obviously is not invoked in the present case. 27. So far as the first condition in the rule, namely, "if the Tribunal requires the additional evidence to enable it to pass orders or for any other substantial cause", is concerned it is to be noticed that this expression is often used in the statutes in clothing the appellate courts or Tribunal with power to allow parties to lead additional evidence and does not give rise to any new principle than what has been settled by a long chain of decisions of various High Courts, the Privy Council as well as of the Supreme Court. 28. The principle is well settled. This expression finds place in Order 41, rule 27(1)(b), of the Code of Civil Procedure which is a provision governing the authority of the appellate courts to permit any party to lead any additional evidence, which otherwise is prohibited, in the circumstances narrated therein. 29. Like rule 29 referred to above, Order 41, rule 27(1)(b), of the Civil Procedure Code, reads as under: "27. Production of additional evidence in appellate court.-(1) The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, in the app....
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....the application is made to import it. The true test, therefore, is whether the appellate court is able to pronounce judgment on the materials before it without taking into consideration the additional evidence sought to be adduced." 33. In the aforesaid case the lower court had admitted additional evidence without examining the existing material on record for finding whether it is possible to pronounce judgment on the basis of existing material. The Supreme Court opined that the discretion exercised by the lower appellate court to be vitiated for having failed to take into consideration the essential requirement of invoking Order 41, rule 27(1)(b). 34. Again in Natha Singh v. Financial Commissioner, Taxation, AIR 1976 SC 1053, the court said: "The true test to be applied in dealing with applications for additional evidence is whether the appellate court is able to pronounce judgment on the materials before it, without taking into consideration the additional evidence sought to be adduced." 35. Thus, reiterating the principle enunciated in Arjun Singh alias Puran's case, AIR 1951 SC 193, as the court did not experience difficulty in rendering the judgment on th....