Income-tax---

----Reference---Income from undisclosed sources---Unexplained investment- Search in assessee's premises---Discovery of ornaments and cash, etc.-- Evidence considered by Revenue Authorities---Additions to income sustained by Tribunal were justified---No question of law arose---Indian Income Tax Act, 1961, Ss. 69 & 256(2).

A search took place at the residential house of the assessee and cash and gold ornaments, fixed deposits, silver coins, etc. were discovered. A summary order was passed under section 132(5) of the Income-tax Act, 1961. For the relevant year 1984-85, the assessee filed a return showing income of Rs.1,27,169. The Assessing Authority assessed the total income at Rs.5,38,717 making addition for unexplained investment and undisclosed income discovered during the search. On appeal, the appellate authority granted substantial relief to the assessee after taking into account the evidence on record and outer explanations filed by the assessee. Against that order, the. assessee filed another appeal before the Tribunal. The appeal was dismissed. On an application to direct reference:

Held, dismissing the application, that although the Commissioner of Income-tax (Appeals) had not discussed the evidence as desired by the assessee, there had been application of mind to the material available on the record. The Tribunal was justified, in upholding the assessment. No question of law arose from its order. .

CIT v. Indian Woollen. Textiles Mills (1964) 51 ITR 291 (SC); Omar Salay Mohamed Sait v. CIT (1959) 37 ITR 151 (SC); Roshan Di Hatti, v. CIT. (1969) 68 ITR 177 (SC) and Shree Meenakshi Mills Ltd: v. CIT (1957) 31 ITR 28 (SC) ref.

Anjay Kothari for the Assessee.

Sandeep Bhandawat for the Commissioner.

JUDGMENT

M. P. SINGH, J.---This income-tax reference case arises out of the order passed by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, rejecting the application under section 256(1) of the Income-tax Act, 1961, requiring the .Tribunal to refer the following questions of law to the High Court.

"(1) Whether, the learned Tribunal was, right in law in not excluding the old gold ornaments of Smt. Amrit Bai, wife of the assessee, weighing 291.500 gins. from the assessment of the assessee and holding its value as unexplained investment by the assessee when such ornaments were found in the possession of Smt. Amrit Bai, her statements were, recorded; the claim was accepted by the Commissioner of Income-tax in the order tinder section 132(12). Smt. Amrit Bai was assessed to wealth tax for the assessment years 1981-82 to 1987-88 and owners and there was no evidence that the assessee made investment during the previous year under assessment?

(2) Whether, the learned Tribunal was right in law in not excluding the old gold ornaments of Children of the family weighing 95-720 gins from the assessment of the assessee and holding its value as unexplained investment by the assessee when such ornaments were found in the possession of the children or/and their parents and the inventories contain items of the children and there was no evidence that the assessee trade investment during the previous year under assessment.

(3) Whether, the learned Tribunal was right in law in rejecting the claim of the assessee regarding ornaments of the children when such claim was made before the Assessing Officer, objection was raised before the Commissioner of Income-tax (Appeals) (who ?) has not expressed any opinion on such ground and the said ground remained un-disposed of by the Commissioner of Income-tax (Appeals)?

(4) Whether the learned Tribunal was right in law in not excluding the old gold ornaments of the assessee individual weighing 48-440 gins front the assessment of the assessee and holding its value as .unexplained investment by the assessee when the Commissioner of Income-tax (Administration) in order under section 132(12) gave a finding that ornaments of the assessee individual was at 1,310 gms and not at 1,261,560 grins and wealth tax assessments for the assessment years 1981-82 and 1982-83 were completed assessing ornaments at 1,310 gins and there was no evidence that the assessee made investment during the previous year under assessment?

(5) Whether the learned Tribunal was right in law in not excluding the old gold ornaments weighing 15 tolas from the assessment of the assessee individual when evidence was adduced that Smt. Subhadra, daughter of the assessee, was married in the lifetime of the assessee's father and she had been given ornaments by the assessee's father?

(6) Whether the learned Tribunal was right in law in holding that the amount to be added under section 69 shall be different than the value of unexplained asset computed or computable under Wealth Tax Act?

(7) Whether the learned Tribunal was justified .in law in holding 512.460 gms of old ornaments as unexplained, in commuting its value at Rs.93.054 and in sustaining addition of such amount under section 69 of the Act? '

(8) Whether the learned Tribunal had material to hold that ornaments of wife of the assessee, children of the family, etc., found in different rooms in the ancestral house remained unexplained and its value was assessable in the individual hands of the assessee under section 69 of the Act?

(9). Whether the findings given by the learned Tribunal in para. 13 of the appellate order are not perverse and have not been vitiated in law?

(10) Whether the learned Tribunal was right in law in sustaining addition of Rs.17,000 as investment in silver bullion weighing 4.865 kgs. when same is unsupported by the inventory and was well-explained?

(11) Whether the learned Tribunal was right in law in rejecting the unrebutted documentary evidence in support of cash of Rs.60,923 holding it unexplained and sustaining its addition in the hands of appellant individual?"

The dispute relates to the assessment made in the assessment year 1984-85.

A search took place at the residential house of the assessee, in his individual capacity at village Salumber on December 21, 1983, and, inter alia, following assets were found and seized:

After recording the statement of the family members of the petitioner under section 132(4) of the Act, a summary order was passed under section 132(5) on December 23, 1983. The assets seized were retained by the Department.

On appeal against the order, dated December 23, 1983, .the Commissioner of Income-tax exercising the power under section 132(12) passed an order on June 14, 1984, and recorded a finding that certain assets, were found to be duly explained. But that order was passed without prejudice to any proceedings under any direct tax laws.

For the relevant year 1984-85, the assessee had filed a return of income of Rs.1,27,169 on September 13, 1985, including an amount of Rs.1,06,594 which -was surrendered as undisclosed investment of money in business; besides this, the assessee had shown only share income from Champa Lal Goverdhan Lai, Salumber, in which he had fifty per cent. share alongwith the son.

The assessing authority, vide order; dated August 29, 1986, however, assessed the total income of Rs.5,38,717 making addition for alleged unexplained investment and undisclosed. income discovered during the course of search proceedings.

Against the order of assessment, dated 'August 29, 1986, in which the total income computed at Rs.5,38,717 included additions for unexplained investment and gold ornaments, silver money-lending and other goods, etc., appeal was filed.

In appeal, the appellate authority granted -substantial relief to the assessee after taking into account the evidence on record and other explanations filed by the assessee. Against that order, the assessee filed another appeal before the Tribunal. The appeal was dismissed. Thereafter, the present application for reference has been filed by the assessee.

The main contention of learned counsel for the assessee was that the Commissioner of Income-tax (Appeals) while passing the order, dated August 3, 1988, has not taken into consideration the following evidence:

1.Copies of relevant entries, in the books of accounts of the appellant's father showing payment of Rs.1,001 made in S.Y. 1995 to Shri Jorawarmal.

2. Declaration 'given by Shri Dev Chard Doshi, eldest son-in-law of Shri Jorawarmal, confirming the payment made by him to the appellant in S.Y. 2002.

3. Affidavit of Shri Dev Chard confirming the handing over of Rs.3,000 to the appellant.

4. Affidavit of Shri Badamilal, son of Shri Nawal Chand, confirming the payment made of Rs.3,000 by Shri Dev Chard to the appellant in the S.Y.2002.

5. Affidavit of Shri Jodhkaran, son of Shri Ratanlal, confirming the payment of Rs.3,000 by Shir Dev Chard to the appellant.

6. Affidavit of Shri Manu Ram. claiming sale of milk on behalf of the appellant for the last 20 years.

7. Copies of various entries in the old books of account confirming purchase of cattle from time to time and details of expenses incurred for maintenance of such cattle.

8. It is evident from record that most of the expenses on fodder meant for cattle were met out of :agricultural produce from the ancestral agricultural :land.

A reading of the order, dated August 3, 1988, of the appellate authority shows that the Commissioner (Appeals) has not discussed the evidence as desired by the assessee but there has been application of mind to the material available on the record. Apart from this, counsel for the appellant has failed to show us that these evidences were so material as it would have changed the final result of the appeal. This case is only against the order rejecting the reference application and the points which have been raised, in our opinion, do not relate to any question of law for the reference to be made to the High, Court.

Learned counsel has referred to the following cases:

(1) Shree Meenakshi Mills Ltd. v. CIT (1957) 31 ITR 28 (SC);

(2) Roshan Di Hatti v. CIT (1968) 68 ITR 177 (SC);

(3) CIT v. Indian Woollen Textiles Mills (1964) 51 ITR 291 (SC)and

(4) Omar Salay Mohamed Sait v. CIT (1959) 37 ITR 151 (SC).

Amongst the cases cited above, the leading case is ofShree Meenakshi Mills Ltd. v. CIT (1957) 31 ITR 28, wherein the Supreme Court while considering the matter was of the view that if a finding of fact has been recorded by the .Tribunal, the High Court normally would not interfere on a reference unless it. appears that there was no evidence before the Tribunal upon which any reasonable man could come to the conclusion to which they have come. Apart from this if the Tribunal has recorded a finding by referring to all the evidence, whether it is sound or not, the cumulative effect of all the facts leading to the finding are only to be looked into. None of the other cases cited above, is of any assistance to the assessee inasmuch as we are also convinced that the evidence to which the reference, has been made by learned counsel, if discussed as he wanted it to be discussed, would not have changed the view taken by the Tribunal.

Under these circumstances, we are of the view that the order rejecting the reference application does not suffer from any illegality and no question of law arose for making the reference to the High Court.

Accordingly, the reference application is rejected.

M.B.A./4021/FC Application rejected.