Madhya Pradesh H.C : Whether, on the facts and in the circumstances of the case, the Hon’ble Tribunal was justified in deleting the additions of Rs. 70,60,749 and Rs. 66,78,000 holding that the assessee has discharged its primary onus even when the same was not discharged ?

High Court Of Madhya Pradesh : Indore Bench

CIT vs. Sheokumar Ramprasad Country Liquor Contractor & Co.

Section 256(2)

Asst. Year 1987-88

A.M. Sapre & Ashok Kumar Tiwari, JJ.

IT Ref. No. 67 of 1998

6th October, 2004

Counsel Appeared :

R.L. Jain with Ku. Mandlik, for the Applicant

JUDGMENT

A.M. Sapre, J. :

This is an application made by the Revenue (CIT) under s. 256(2) of the IT Act consequent upon the dismissal of their application made under s. 256(1) of the Act by the Tribunal in RA No. 126/Ind/1997, which, in turn, arises out of an order passed by the Tribunal, dt. 17th July, 1997, in ITA No. 887/Ind/1992, pertaining to the asst. yr. 1987-88. By impugned order, the learned Members of the Tribunal were of the view that the questions proposed by the Revenue do not involve any question of law which are capable of being referred to the High Court for its opinion. Accordingly, the reference application made by the Revenue under s. 256(1) of the Act before the Tribunal was dismissed, holding that the questions proposed are essentially questions of facts. It is this order against which or consequent upon which, this application has been presented by the Revenue by taking recourse to the provisions of s. 256(2) of the Act praying for calling of the questions proposed by the Revenue to be answered by this Court. Heard Shri R.L. Jain with Ku. Mandlik, learned counsel for the applicant. These are the questions which the Revenue has proposed for being answered by this Court on a reference being called from the Tribunal under s. 256(1) of the Act :

“(i) Whether, on the facts and in the circumstances of the case, the Hon’ble Tribunal was justified in deleting the additions of Rs. 70,60,749 and Rs. 66,78,000 holding that the assessee has discharged its primary onus even when the same was not discharged ?

(ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in confirming the order of CIT(A) deleting the addition of Rs. 3,53,58,424 on account of suppressed sales ?

(iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition of Rs. 4,24,600 on the ground that the same is made on surmises even when the same was made on the basis of documentary evidence for rent from chicken shop and cycle stand ?

(iv) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition of Rs. 1,68,000 on the basis that the same has been made without evidence on account of excess cash utilised elsewhere for earning income ?”

Having heard learned counsel for the petitioner and having perused record of the case, we are of the opinion that no referable question arises in this case and the question really involved in the case, is question of fact. Accordingly, Tribunal did not commit any error when it declined to make a reference to this Court. Basically, the question before the taxing authority and which travelled upto the Tribunal was in regard to addition/deletion of some amount as mentioned in the proposed questions. This question was examined by the taxing authorities and after obtaining the explanation from the assessee, decided the same in favour of the assessee by accepting the deletion so made by the AO (sic). The Tribunal while deciding the second appeal, held that the explanation offered by the assessee is genuine, bona fide and consequently, the deletions deserve to be upheld. The explanation, thus, offered by the assessee in regard to the deletion was accepted being satisfactory.

In our opinion, the questions referred supra, proposed by the Revenue do not involve any question of law. The explanation offered by assessee was accepted by the Tribunal. The Tribunal had the jurisdiction to accept the explanation offered by the assessee and it was rightly accepted. This Court cannot go into the question, i.e., as to whether the explanation offered by an assessee constitutes sufficient cause or not in proceedings under s. 256(1) of the Act ? We, therefore, agree with the observations made by the learned Members of the Tribunal while dismissing the application made by the Revenue under s. 256(1) of the IT Act and hold that this application does not involve any referable question of law so as to call the same from Tribunal for being answered by this Court on merits. As a consequence, the application fails and is hereby dismissed. No costs.

[Citation : 273 ITR 505]

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