COMMISSIONER OF INCOME TAX VS SMT. MARJINDER KAUR
1999 P T D 1778
[226 I T R 408]
[Madhya Pradesh High Court (India)]
Before A. K. Mathur, C. J. and S. K. Kulshrestha, J
COMMISSIONER OF INCOME TAX
Versus
Smt. MARJINDER KAUR
M.C.C. No. 625 of 1992, decided on 19/08/1996.
Income-tax----
----Reference---Deductions---Payment of interest to children---Deduction disallowed by I. T. O.---Voluntary disclosure certificates of children produced at appellate stage---Accepted and deduction allowed---Findings of fact---No question of law arises---Indian Income Tax Act, 1961, S. 256(1).
The assessee claimed deduction of interest paid to her children. R, N and S. In the absence of any evidence, the Income Tax Officer disallowed the same. On appeal, the assessee filed voluntary disclosure certificates of the children and stated that they had deposited their money with the assessee. The Appellate Assistant Commissioner allowed the deduction in respect of interest paid to two children. The Tribunal confirmed the same. On a reference:
Held, that at the time the matter was argued before the Income Tax Officer no evidence was produced. At the appellate stage, voluntary disclosure certificates of R, N, and S were produced. Since it was not known when R converted gold into cash, interest paid to R was not allowed. The Appellate Assistant Commissioner accepted the same in evidence in respect of N and S. All the questions were purely questions of fact. No question of law arose.
V. K. Tankha for the Commissioner.
B. L. Nema for the Assessee.
JUDGMENT
This is an income-tax reference under section 256(1) of the. Income Tax Act, 1961, at the instance of the Revenue and the following three questions of law had been referred by the Tribunal for answer by this Court.
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law to hold that there was no good reason or new fact to interfere with the order of the Appellate Assistant Commissioner who directed to allow the claim of deduction of payment of interest by the assessee to her two minor children?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in confirming the order of the Appellate Assistant Commissioner to the effect that production of V.D. certificates in the name of two minor children was sufficient proof of genuineness of the loans and consequential allow ability of the interest?
(3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in nor setting aside the order of the Appellate Assistant Commissioner, which was passed by admitting fresh evidence without giving an opportunity to the Assessing Officer to controvert the same?"
The brief facts giving rise to this case are that the assessee had claimed to have paid interest to her children, namely, Ku. Ravinder Kaur, Ku. Navneet Kaur and Sardar Narender Singh. The Income-tax Officer disallowed the payment of interest in the absence of any evidence. Against the order of the Income-tax Officer, the assessee preferred an appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner held that the interest paid to the children could be allowed and accordingly, directed the Income-tax Officer to allow the payment of interest as deduction from the income of the assessee. However, he confirmed the disallowance of the assessee in respect to Ku. Ravinder Kaur. Aggrieved against this order, the Revenue approached the Tribunal and the Tribunal confirmed the finding of the Appellate Assistant Commissioner. Hence, the Revenue approached the Tribunal for making reference of the aforesaid questions for answer by this Court. Accordingly, the Tribunal has referred the aforesaid three questions to this Court.
It is relevant to mention that at the time the matter was argued before the Income-tax Officer, no evidence was there. However, at the appellate stage, counsel for the assessee a produced voluntary disclosure certificate of Ku. Ravinder Kaur, Ku, Navneet Kaur and Sardar Narender Singh wherein they have disclosed Rs.25,000 each. It was said that they had deposited their money with the assessee. It was also pointed out by counsel that Ku. Navneet Kaur and Sardar Narender Singh could give loan because they disclosed cash but it is not known as to when Ku. Ravinder Kaur converted the gold into cash and gave it to the assessee therefore, this aspect was negatived. However, so far as the loan by two minor children is concerned, it was accepted. The said findings have been confirmed by the Tribunal. We have gone through both the orders of the Appellate Assistant Commissioner and the Tribunal and we are of the opinion that these are purely questions of fact as the voluntary disclosure certificates were not produced before the Income-tax Officer and, therefore, the Income-tax Officer rightly recorded the finding of disallowance and when they were produced before the appellate authority, i.e., the Appellate Assistant Commissioner, the same were accepted in evidence in respect of Ku. Navneet Kaur and Sardar Narender Singh. In this view of the matter, in our view, the Tribunal has correctly approached the matter. All the three questions referred by the Tribunal are purely questions of fact and no question of law is involved therein. In view of the concurrent findings of the two Courts below, there is no question of law involved for answer by this Court. Consequently, this reference is answered against the Revenue and in favour of the assessee.
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