Commissioner Of Income-Tax vs R.N. Anand Construction P. Ltd.
1992 Latest Caselaw 430 Del

JUDGMENT

1. The petitioner seeks reference of the following question to this court :

"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally correct in holding that, even if the liability of Rs. 4,49,600 shown in the balance-sheet on account of purchase of plot of land is not genuine, the addition cannot be made to the declared income simply because no deduction had been claimed for the cost of land in the profit and loss account for the year under consideration ?"

2. In this case, the assessed had claimed that it has purchased land for a sum of Rs. 4,49,600 but the price of the same had not been paid. The land was alleged to have been purchased from one P. K. Tripathi. The Income-tax Officer, in the assessment order, came to the conclusion that the documents produced by the assessed were not genuine and that the assessed had not been able to show that the liability of Rs. 4,49,600 in favor of the assessed was genuine. It then held that this amount was the assessed's own money and was treated "as the income of the assessed as income from other sources". The assessed went up in appeal to the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax addressed himself to the question as if the Income-tax Officer had made an addition of Rs. 4,49,600 by disallowing the liability claimed by the assessed. The Commissioner of Income-tax (Appeals) observed that, as the assessed had not claimed this liability, the question of its being disallowed does not arise. The amount of Rs. 4,49,600 added to the income of the assessed was, therefore, deleted.

3. The Income-tax Officer came up in appeal before the Income-tax Appellate Tribunal. In the order dismissing the appeal of the Income-tax Officer, the Tribunal, at the very start of its order, reproduced the grounds in the appeal and one of the grounds was as follows :

"The learned Commissioner of Income-tax (Appeals) has wrongly allowed the above amount without considering the facts brought out by the Income-tax Officer in the assessment order to the effect that the liability was not genuine and actually represented funds the source of which had not been explained by the assessed."

4. The Tribunal then observed that : "the Assessing Officer had made an addition of Rs. 4,49,600 on account of land liability not proved as genuine" and thereafter also observed that it had heard the Departmental representative and counsel for the assessed and had perused the records. The order of the Tribunal does not thereafter refer to or deal with any contention of any of the parties specifically but the Tribunal proceeded to decide the appeal and observed that the assessed had neither made any claim nor had the Assessing Officer brought any material on record to suggest that the amount in question had been paid. The appeal of the Income-tax Officer was dismissed.

5. It is contended by learned counsel for the assessed that the question proposed was neither raised nor considered by the Tribunal and that it does not arise from the Tribunal's order. He refers to M. B. Abdulla v. CIT .

6. In our opinion, this contention is not right. As already stated hereinabove, the basis for adding this amount in the income of the assessed was that this sum of Rs. 4,49,600 was held by the Income-tax Officer to represent the income of the assessed from other sources. The Tribunal reproduced the ground of appeal in which this contention is raised and thereafter did not deal with it. It is not possible for us to accept the contention of Mr. Aggarwal that this contention was not raised. The mere fact that the grounds of appeal have been set out by the Tribunal in its order where this contention is specifically raised and the observation of the Tribunal that it had heard the Departmental representative without the Tribunal elaborating as to what other contentions the Departmental representative contended leaves us to believe that whatever was set out in the grounds of appeal must have been considered. The only basis for the amount to be added in the income of the assessed was that it was the undisclosed income of the assessed and it was not a case of exemption being claimed and the same being disallowed by the Tribunal. In our opinion, the question was raised and if the Tribunal chose not to deal with it or discuss it, it would not mean that the question does not arise at all.

7. We, therefore, direct the Tribunal to state the case and refer the aforesaid question to this court. There will be no order as to costs.