Rajasthan H.C : The assessee against the order of the Tribunal, Jodhpur Bench, dt. 3rd March, 2000, with respect to the asst. yr. 1993-94.

High Court Of Rajasthan

Rameshwar Lal Mali vs. CIT

Section 260A

Asst. Year 1993-94

N.N. Mathur & Harbans Lal, JJ.

IT Appeal No. 63 of 2001

6th February, 2002

Counsel Appeared

Mahendra Gargieya, for the Appellant : L.M. Lodha, for the Respondent



This appeal under s. 260A of the IT Act, is preferred by the assessee against the order of the Tribunal, Jodhpur Bench, dt. 3rd March, 2000, with respect to the asst. yr. 1993-94. The appellant-assessee is running a shop in the name of Kishan Mishthan Bhandar engaged in manufacture and sale of sweets and Namkeen. A survey was undertaken under s. 133A of the IT Act of the shop as well as the factory premises by the IT authorities on 5th Dec., 1995. The books of accounts of the appellant were impounded in accordance with the provisions of s. 131 of the IT Act. The ST Department also conducted a survey independently at the premises of the assessee on 15th Feb., 1995. The assessing authority observed number of defects in the books of account maintained by the appellant such as non-maintenance of stock register, purchase and sales were not fully vouched, lump sum payments were made to the labourers, wage register not maintained. On scrutiny of impounded documents, it was found that certain entries were not verified. Relying on the specific defects, the AO invoked the provisions of s. 145(2) of the IT Act after giving specific opportunity to the appellant. The appellant was confronted with the entire material before the assessing authority. The AO on the basis of record and the statement of the various Karigars and salesman made the addition to the trading results declared by the assessee. The assessing authority completed the assessment under s. 143(3) of the IT Act. The appellant preferred an appeal against the order of assessing authority before the CIT(A), Bikaner. The Appellate Commissioner reduced the estimation of sale and also the gross profit to a great extent. The appellant-assessee preferred a further appeal to the Tribunal. The Tribunal considered all the contentions raised in depth and detail. The Tribunal dismissed the appeal by a well reasoned judgment dt. 3rd March, 2000.

It is contended by Mr. Mahendra Gargieya, learned counsel appearing for the appellantassessee, that the Tribunal was not justified in considering and heavily relying upon the statements of various workers and salesman as their statements were recorded at the back of the appellant, who was never given an opportunity to cross-examine them. According to learned counsel such an evidence could not have been relied upon. We are not impressed with the contention of the learned counsel. Under the newly added provisions of s. 133A [sic-s. 260A] of the IT Act, a second appeal is maintainable under the IT Act only on a substantial question of law. It is well-settled position of law that a competent IT authority can inspect the business premises and record the statements under the provisions of s. 133A. Such an authority cannot demand collection of tax on the alleged undisclosed income then and there.

Such an authority is required to send the statement of the material collected to the AO if he himself is not the IT authority carrying out the survey operation. There is no provision for permitting a cross-examination of the person, whose statement is recorded during the survey. In the instant case, the estimation of sale has not been made solely on the basis of statements of the witnesses recorded during the survey. It is based on the entire facts relating to business of the assessee which includes location of the shop, past history, various defects in the books of accounts and the statements of the persons available on the spot during the survey. Thus, it cannot be said that the estimation is solely on the basis of the statements of the witnesses recorded on the spot. The conclusion arrived at by the assessing authority and modified by the Appellate Commissioner is based on the material on record. The finding has been confirmed by the Tribunal. The sufficiency or adequacy of evidence necessary for reaching conclusion of fact does not give rise to a question of law much less the substantial question of law. Thus, no substantial question of law arises from the order of the Tribunal.

4. Thus, this appeal being bereft of merit, is dismissed.

[Citation : 256 ITR 536]

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