J. J. ENTERPRISES VS COMMISSIONER OF INCOME-TAX
2004 P T D 2111
[254 I T R 216]
[Supreme Court of India]
Present: S. P. Bharucha and Y. K. Sabharwal, JJ
J. J. ENTERPRISES
Versus
COMMISSIONER OF INCOME‑TAX
Civil Appeal No.6384 of 2001, decided on /01/.
th
September, 2001. (Appeal by Special Leave from the order, dated August 16, 2000 of the Allahabad High Court in I.T.A. No.35 of 1999).
Income‑tax‑‑‑
‑‑‑‑Reference‑‑‑Question of law‑‑‑Appellate Tribunal‑‑‑Finding that addition made to income was on pure guess work‑‑‑Finding of fact‑‑‑No question of law 'arises‑‑‑Tribunal's conclusion final‑‑‑No question of remanding matter for re‑determination‑‑‑Indian Income Tax Act, 1961, S.256(2).
Where the Appellate Tribunal had held that an addition to the income of the assessee was unsustainable because it had been made "on the basis of pure guess work": Held, that no question of law arose out of the order of the Tribunal. The finding of the Tribunal was one of fact in respect of which the Tribunal's conclusion was final and there was no question of remanding the matter to the, Assessing Officer for re examination of the same question.
The order of the Allahabad High Court (M. Katju and D.R. Chaudhary JJ.) dated August 16th, 2000, was as follows:‑‑
Heard counsel for the parties.
This is an application under section 256(2) of the. Income Tax Act, 1961. On the facts of the case we are of the opinion that the following question of law arises out of the order of the Tribunal.
"Whether, on the facts and in the circumstances of the case, the Income‑tax Appellate Tribunal was legally correct in upholding the deletion of Rs.19,66,550 instead of setting aside the same to the file of "the Assessing Officer for re‑examination and opportunity to the assessee?"
We, therefore, direct the Tribunal to state a case and refer the above questions for our opinion,
The assessee preferred an appeal to the Supreme Court by special leave.
G.C. Sharma, Senior Advocate (R.K. Raghavan, Ms. Kamini Jaiswal, Mrs. Shomita Bakhsi and Ms. Aishwarya Rao for Appellant.
Ranbir Chandra and B.V. Balram Das for Respondent.
ORDER
Leave granted.
The Tribunal had declined to make a reference, at the instance of the Revenue, the following question:
"Whether, on the facts and in the circumstances of the case, the Income‑tax Appellate Tribunal was legally correct in upholding the deletion of Rs.19,66,550 instead of setting aside the same to the file of, the Assessing Officer of the re‑examination and opportunity to the assessee?"
In its principal order, the Tribunal had concluded that the addition was unsustainable because it had been made "on the basis of pure guess work". The Revenue moved the High Court under section 256(2) of the Income Tax Act, 1961, and the High Court called for a reference on the basis that the question was question of law. We are unable to agree with the High Court. In the first place, the Tribunal has held that the addition had been made on the basis of pure guess work and this is a matter of fact in respect of which the Tribunal's conclusion is final. In the second place, there was no question of remanding the matter to the Assessing Officer for re‑examination of the same question.
It is not often that we interfere when the High Court calls for a reference under section 256(2) but when, as here, the question is a pure question of fact, our interference is called for.
The appeal is allowed. The order under challenge is set aside.
No order as to costs.
M.B.A./1092/FCAppeal allowed.