A.M. ZAINALABDEEN MUSLIAR VS COMMISSIONER OF INCOME-TAX, 1998 PTD-KERALA-HIGH-COURT-INDIA 1322 (1996)

Income-tax---

----Reference---Tribunal on facts reducing addition and affirming inclusion of an amount as income from other sources---Questions of fact---Levy of Central sales tax lifted---Provision for payment of it by assessee disallowed- No question of law arises---Indian Income Tax Act, 1961, S.256(2).

The Tribunal discussed the materials and reduced an addition relating to value of purchases and affirmed the inclusion of an amount as income from other sources. The provision made by the assessee for payment of Central Sales Tax on local purchases was disallowed as the levy had been lifted by amendment to the Central Sales Tax Act. The application for reference was rejected. On an application to direct reference:

Held, that no question of law arises.

C. Kochunni Nair and C.S. Ullasan for Petitioner.

N.R.K. Nair for Respondent.

JUDGMENT

MRS. K. K. USHA, J.---The petition is under section 256(2) of the Income-tax Act, 1961, challenging the order passed by the Income-tax Appellate Tribunal, Cochin Bench, dated March 7, 1994, and it seeks a direction to the Tribunal to refer questions Nos. 5 to 17 set out in paragraph 4 of the petition for decision of this Court. For the assessment year 1978-79, the assessee filed returns of income on January 17, 1979, disclosing an income of Rs.1,02,790 and an agricultural income of Rs.1,000. The Income-tax Officer proposed to tax the assessee on an income of Rs.11,63,600. A draft order, dated March 13, 1981, was issued to the assessee on March 17, 1981, and objections were filed on March 31, 1981. On receipt of the draft order as well as the objections, the Inspecting Assistant Commissioner posted the proceedings for enquiry on September 19, 1981. Since notice of enquiry was received by the assessee only on September 23, 1981, without hearing the assessee directions under section 144-B happened to be issued on September 25, 1981, approving various additions and disallowances proposed by the Income-tax Officer. The assessment was completed on September 26, 1981, which was challenged by the assessee before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) set aside the assessment order on the ground that the assessee was not given an opportunity before the Inspecting Assistant Commissioner and directed the Income-tax Officer to pass fresh orders in accordance with law. The above order also taken in appeal by the assessee before the Tribunal, which was dismissed by order dated November 17, 1983. Thereafter, the Inspecting Assistant Commissioner heard the Assessee's representative and pursuant to the directions issued, the Income tax Officer passed assessment orders under section 143(3) read with section 144-B on January 20, 1984, after giving a fresh opportunity of being heard to the assessee. The above order was also challenged before the Commissioner of Income-tax (Appeals), which challenge was rejected. The matter was taken in appeal before the Tribunal, which held that the assessment order, dated January 20, 1984, was not null and void. In the reference application questions Nos. 1 to 4 were directed against the above finding of the Tribunal and those questions have been referred for consideration of this Court.

Questions Nos. 5 to 10 relate to the finding of the Income-tax Officer in regard to 38,727 Kgs. of shelled cashew kernels for Rs.9,57,158.95. The Income-tax Officer found that purchase to the extent of Rs.7,87,377 was bogus and that the assessee had brought in his own unaccounted stock in the guise of purchases from outsiders. The addition to the extent of Rs.7,48,377 was made towards value of purchases under other sources not proved. On appeal, the Commissioner of Income-tax (Appeals) limited the addition to Rs.4.5 lakhs under the head "other sources". The Revenue as well as the assessee appealed against the above order before the Tribunal which dismissed both the appeals sustaining the addition of ks.4.5 lakhs. The Tribunal discussed the materials and evidences in detail and came to the conclusion that the addition of Rs.4.5 lakhs will meet the ends of justice. The Commissioner of Income-tax filed O.P. No. 12196 of 1993 seeking reference of question relating to reduction of the addition to Rs.4.5 lakhs from Rs.7,48,377. The prayer was rejected by this Court (see (1995) 212 ITR 20) by a judgment dated October 21, 1994, on the ground that it cannot be said that the finding was either perverse or unreasonable or unsupported by any material and no question of law arose out of that part of the Tribunal's order. For the very same reasoning we hold that the Tribunal is not liable to be directed to refer questions Nos. 5 to 10.

Questions Nos. 11 or 14 relate to the inclusion of Rs.30,000 as income from other sources. The addition was made by the Income-tax Officer when the assessee could not adduce any acceptable evidence in support of his explanation. The Tribunal has discussed in detail all the material before affirming the inclusion of Rs 30000 as income from other sources. We are of the view that it is a finding on a pure question of fact Therefore, we decline to direct reference of questions Nos. 11to 14.

Questions Nos. 15 to 17 relates to the provision made by the assessee for payment of the Central sales tax on local purchase of kernels to the extent of Rs.61,656. The Income-tax Officer disallowed the same on the ground that levy of Central sales tax on local purchase of kernels was lifted by an amendment to the Central Sales Tax Act with effect from September 7, 1976. This view was affirmed by the Income-tax Officer as well as the Tribunal. It was not denied by the assessee before the Tribunal that by the amendment, dated September 7, 1976, purchase of cashew kernels was exempted under the Central Sales Tax Act. If that be so, there is no question of the assessee providing for payment of Central sales tax on local purchase of kernels. No question of law arises on this aspect also. We decline directions to refer questions Nos. 15 to 17.

In the light of the above, the petition stands dismissed.

M.B.A./1393/FCPetition dismissed.