High Court Of Punjab & Haryana
CIT vs. Kulwant Singh & Co.
Section 4
Asst. Year 1988-89
D.K. Jain, C.J. & Surya Kant, J.
IT Appeal No. 198 of 2004
9th January, 2006
Counsel Appeared :
Dr. N.L. Sharda, for the Appellant
JUDGMENT
D.K. Jain, C.J. :
This appeal by the Revenue under s. 260A of the IT Act, 1961 (for short “the Act”), is directed against order dt. 24th Feb., 2004, passed by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (for short “the Tribunal”), in ITA No. 659/Asr/1997 pertaining to the asst. yr. 1988-89.
2. According to the Revenue, the order gives rise to the following substantial question of law :
“1. Whether, the learned Tribunal was right in law in dismissing the appeal of the Revenue by holding that the payment was made by Shri Kulwant Singh, although the facts as found for the CIT (A) in order dt. 8th Oct., 1992, for the asst. yr. 1989-90 were different ?
Whether, the Tribunal was justified in holding that no AOP was in existence when it is undisputed that payment to excise authorities was made on behalf of three persons (Sh. Kulwant Singh, Sh. Balbir Singh and Sh. Daljit Singh) who later on formed a firm w.e.f. 1st April, 1988 ?
Whether the order of the Tribunal was perverse as it was based on unsupported version of the assessee ?”
Briefly stated, the material facts giving rise to the filing of this appeal are as follows :
In respect of the asst. yr. 1989-90, the AO, while framing the assessment for the said assessment year, made an addition of Rs. 3,75,000 as unexplained investment. The assessment was framed under s. 144 of the Act in the status of association of persons (for short “the AOPs”). However, on the assessee’s challenge to the said order in appeal before the CIT(A), the addition was deleted on the ground that the alleged investment was made during the previous year, relevant to the asst. yr. 1988-89.
In view of the said order of the Tribunal, the AO initiated action under s. 148 of the Act in respect of the asst. yr. 1988-89, and framed an assessment under s. 144 on the respondent, taking its status as AOP.
Aggrieved, the assessee preferred an appeal to the CIT(A) who annulled the assessment, inter alia, on the ground that since the assessee-firm came into existence only with effect from 1st April, 1988, no assessment could be framed on an AOP prior to the said date. Not being satisfied with the order, the Revenue took the matter in further appeal to the Tribunal. By the impugned order, the Tribunal has upheld the view taken by the CIT(A). Hence, the present appeal.
It is vehemently argued by Dr. N.L. Sharda, learned counsel for the Revenue, that since an excise licence had been issued in the name of M/s Kulwant Singh & Co.–assessee herein, in March, 1988, in favour of the three partners of the said firm, namely, Sarv Shri Kulwant Singh, Balbir Singh and Daljit Singh, a firm or an AOP is deemed to have come into existence in the previous year, relevant to the asst. yr. 1988-89.
We are unable to agree with learned counsel. Merely because an excise licence is stated to have been issued in the name of three persons, who constituted a firm w.e.f. 1st April, 1988, it cannot be said that a firm or an AOP had in fact come into existence prior to the said date. Whether or not a firm or AOP came into existence is a pure question of fact, to be determined on the basis of evidence on record. Admittedly, in the present case, except the excise licence, no other material was placed before the Tribunal in support of the stand of the Revenue that an AOP was in fact in existence in the asst. yr. 1988-89. In this view of the matter, no fault can be found with the finding recorded by the Tribunal that neither a firm nor an AOP being in existence in the previous year relevant to the asst. yr. 1988-89, no assessment could be framed in the said status. The finding recorded by the Tribunal is a pure finding of fact, giving rise to no question of law, much less a substantial question of law.
Consequently, we decline to entertain the appeal. Dismissed.
[Citation : 283 ITR 301]
