Kerala H.C : Both these petitions under s. 256(2) of the IT Act, 1961 relate to the assessment made on one Indira Rani for the asst. yr. 1983-84.

High Court Of Kerala

CIT vs. Smt. B. Indira Rani

Section 256(2)

Asst. Year 1983-84

T.L. Viswanatha Iyer & Mrs. K.K. Usha, JJ.

OP Nos. 6628 & 6702 of 1991

27th September, 1994

Counsel AppearedN.R.K. Nair, for the Petitioner : G. Sivarajan, for the Respondent


Both these petitions under s. 256(2) of the IT Act, 1961 relate to the assessment made on one Indira Rani for the asst. yr. 1983-84. Though the assessee filed a return of income of Rs. 3,793 it was subsequently revised disclosing an income of Rs. 5,71,984. The ITO completed the assessment enhancing the income to Rs. 15,57,040 making an addition of Rs. 9,79,829 as income from other sources besides unexplained investment in the purchase of a car of Rs. 70,000 and subscription to a chitty of Rs. 10,281. The assessee disputed this addition in appeal before the CIT who allowed it in part, deleting an amount of Rs. 1,45,497 out of the income added under the head `other sources’, but sustaining the assessment in other respects. On further appeal to the Tribunal by the assessee, the Tribunal while sustaining the additions relating to the investments on the car and the chitty, deleted the entirety of the addition made under the head `other sources’. The Revenue has filed O.P. No. 6628 of 1991 against the deletion under the head `other sources’ made by the Tribunal, while the assessee challenges the sustaining of the additions relating to car and chitty by the Tribunal. The reference applications filed by both sides were dismissed by the Tribunal as not disclosing any question of law and these two petitions are therefore filed under s. 256(2) to compel reference of the very same questions. Assessee’s father was an abkari contractor who was a partner of the firm DKB & Co. who had substantial abkari dealings. This firm had offered an amount of Rs. 41,00,000 for assessment during the period in question and that had been brought to assessment in the hands of that firm. The amount sought to be added under the head `other sources’ to the assessee’s income pertained substantially to the amount deposited in her bank account in the Federal Bank, Quilon branch in which a deposit of Rs. 7,60,276 was made on 30th March, 1983. The assessee’s explanation was that this amount belonged to her father Bharathan, who was a partner of the firm DKB & Co. According to her, Bharathan had substantial share of income from the firm and had been depositing the money in various names. The deposit in question was one such. The Tribunal accepted this plea of the assessee and it was on that basis that the Tribunal deleted the entirety of the addition made under the head `other sources’.

It must be noted here that the CIT(A) had himself deleted an amount of Rs. 1,44,497 out of the total addition of Rs. 9,79,829 made under the head `other sources’. That finding was accepted by the Department and was not challenged in appeal before the Tribunal. The finding of the Commissioner was that amount had been deposited in the Mylapore Branch of the Punjab National Bank in the joint names of the assessee and her father, but the amount belonged to the father. This was taken as a circumstance to indicate that Bharathan, the father, had been depositing money in the name of the assessee in various accounts. The Tribunal noted that the assessee did not have the use of the money deposited in her name in the Quilon Branch of the Federal Bank. That account which was opened on 30th March, 1983 was actually closed on 2nd March, 1984. An amount of Rs. 10,00,000 was withdrawn from this account and the Tribunal noted that it had been deposited in the account of the assessee’s mother and withdrawn subsequently for other purposes. The Tribunal held that the assessee’s father had been making such deposits from the above circumstances and others and it was on that basis that it came to the conclusion that the amount of the deposit in question belonged to the assessee’s father Bharathan and not to the assessee. This finding of the Tribunal is based on the materials and the evidence on record and is made on a thorough apprisal of the materials available in the case. The inference made by the Tribunal is a possible inference on the evidence and materials available. This inference being essentially a question of fact, it cannot be said that a question of law arises out of the order of the Tribunal liable to be referred to this Court for decision.

In the course of the discussion the Tribunal had observed that the assessment of Rs. 41 lakhs in the hands of DKB & Co. had been accepted and that no appeal had been filed by the firm DKB & Co. therefrom. Counsel for the Revenue pointed out that the statement that no appeal had been filed was a mistake since an appeal had, as a matter of fact, been filed by the assessee. According to counsel for the Revenue it was this mistaken belief that no appeal had been filed that had prompted the Tribunal to reach the conclusion that the deposit in question belonged to the assessee’s father and not herself. But we are not in a position to agree with the counsel on this submission. The Tribunal has discussed this question very elaborately from paragraph 18 onwards. We do not find that the alleged non-filing of the appeal by DKB & Co. has influenced the Tribunal in its decision that the amount belonged to Bharathan and not to the assessee. Even otherwise it was pointed out by counsel for the assessee before us that the Tribunal had in its order in ITA Nos. 992 of 1986 and 858 of 1988 relating to the assessment of DKB & Co. for the year 1983-84 affirmed the assessment made on that firm on the amount of Rs. 41 lakhs offered by it for assessment. Counsel also referred to the assessment made on DKB & Co. for the year 1986-87 where the ITO had accepted the position that an amount of Rs. 9,35,236 namely the amount deposited in the Federal Bank as mentioned earlier and another had been utilised by the assessee and was not available to DKB & Co. for payment of over Rs. 11 lakhs of income-tax during the year. Having regard to all these circumstances, we do not find any purpose in compelling reference to this Court in relation to the deletion of the income under the head `other sources’. So far as the assessee’s petition O.P. No. 6702 of 1991 is concerned, we do not find any merit in it. The petition was pressed only in relation to the amount of Rs. 70,000 utilised for the purchase of the car. According to the assessee, the car had been purchased with funds furnished by her mother. It was stated that both the mother and the daughter-assessee had undisclosed sources of income and the mother had, in the course of the assessment proceedings, accepted that she had furnished the amount of Rs. 70,000 for purchase of the car. The Tribunal has found as a fact that this cannot be true. The Tribunal noted that apart from the mother’s statement accepting the advancement of the amount for purchase of the car, there was no other evidence to show that the mother had actually advanced any amount or that she had even source of any funds for providing the advance. It was also noted that the assessee had transferred the car subsequently to her own business. The finding that the amount of Rs. 70,000 belonged to the assessee and had not been advanced by the mother is again a question of fact on which all the authorities had concurrently found against the assessee on an appreciation of the evidence in the case. No question of law arises for reference in that case as well.

Both the original petitions are therefore without merit. They are accordingly dismissed.

[Citation : 211 ITR 382]

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