Madhya Pradesh High Court
The Pr. Commissioner Of Income Tax 1 vs Shri Vinod Bhandari on 28 May, 2024
Author: Sushrut Arvind Dharmadhikari
Bench: Sushrut Arvind Dharmadhikari
1
I.TA. No. 12 of 2021
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND
DHARMADHIKARI
&
HON'BLE SHRI JUSTICE GAJENDRA SINGH
ON THE 28th OF MAY, 2024
INCOME TAX APPEAL No. 12 of 2021
BETWEEN:-
THE PR. COMMISSIONER OF INCOME TAX 1 AAYKAR
BHAWAN, WHITE CHURCH ROAD, INDORE (MADHYA
PRADESH)
.....PETITIONER
(MS VEENA MANDLIK, LEARNED COUNSEL FOR THE
APPELLANT)
AND
SHRI VINOD BHANDARI 21 GF BHANDARI HOUSE
TALKIES SCHEME NO 54, VIJAY NAGAR INDORE
(MADHYA PRADESH)
.....RESPONDENTS
(SHRI SUMIT NEMA - SENIOR ADVOCATE WITH SHRI
GAGAN TIWARI - ADVOCATE FOR THE RESPONDENT
[CAVEAT)
-------------------------------------------------------------------------------------
This appeal coming on for order this day, Justice Sushrut
Arvind Dharmadhikari passed the following:
ORDER
With the consent of the parties the matter is heard finally.
This is an appeal filed by the appellant under Section 260A of
the Income Tax Act, 1961 (hereinafter referred to as 'the Act of 1961)
being aggrieved by the order dated 20.03.2021 passed by the Income
Tax Appellate Tribunal, (ITAT) Bench Indore Vinod Bhandari vs.
PCIT (IT Appeal No.66(IND) of 2017) for the assessment year 2012-
2. This appeal was admitted by this Court vide order dated
12.09.2021 whereby the following substantial question of law was
framed:
"Whether on the facts and circumstances of the case and in
law the ITAT was justified in deleting the addition of
Rs.7,34,79,097/- made by the AO under section 68 of the
Income Tax, Act 1961 on account of unexplained cash
credit, holding that the assessee is entitled for the telescopic
benefit of the income surrendered during the year to the cash
deposit of Rs.7,34,79,097/- in Bank account treating the
same as maturity proceeds of hundies during the year,
particularly when no specific source of cash deposit were
submitted by the assessee and assessee failed to produce the
reliable and cogent evidence to establish the claim
regarding source of cash?"
3. Learned Senior Counsel for the respondent has argued that the
case does not involve any substantial question of law and the
substantial question of law framed on 12.09.2021 is in fact not as such
and is merely factual in nature. The Senior counsel has straight away
drawn the attention of this Court to paras 55 to 58 of the ITAT's order
to buttress the fact that no substantial question of law is involved in
the case.
4. The Counsel for the appellant has on the other hand relied on
the findings recorded by the CIT(A) to submit that the Tribunal has
not taken into consideration the finding of CIT(A) before deciding the
issue and the source of deposit of amount in the bank account
remained unexplained and thus the substantial question of law so
framed deserves to be answered in favour of the appellant.
5. The brief facts of the case are that during a survey under Section
133A of the Income Tax Act, 1961 conducted at the business premises
of the respondent on 23/09/2011 revealed undisclosed income
amounting to Rs.7.00 crore represented by Hundi receipts(promissory
notes) advanced by the respondent aggregating to an amount of
Rs.7,00,00,000/- which the respondent declared as undisclosed income
(surrendered during the survey) in his return of Income for the A.Y.
2012-13.
6. It appears from the Assessment order that following the survey,
the respondent fully recovered the hundi loans in the F.Y. 2011-12,
albeit with a delay from their due dates due to the original receipts
being in possession of the Income-tax Department with interest and
this sum so recovered against loans advanced and interest thereon was
deposited in the bank account of the respondent. The facts reveal that
the respondent duly informed the Assessing Officer via letter filed on
09/04/2012, notifying the recovery and subsequent deposit of the
hundi loans into the bank account of the respondent.
7. In the income tax return filed under section 139(1) for the A.Y.
2012-13, the respondent declared Rs. 7,01,74,054/- as taxable income.
Subsequently return was revived on 18.07.2013 for adding the interest
income and thereby Respondent declared income of Rs.7,41,07,850/-.
The income offered to return included the income of Rs.7.00 crores
offered to tax during proceedings u/s 133A being undisclosed Hundi
loans the original receipts whereof were seized by the department
during Survey action. Further the income returned also included an
interest income of Rs.34,79,097/- recovered from the Hundi loans.
8. It is submitted by the respondent that the respondent had
recorded all the realization, which was in cash, from loans given on
Hundi, in his books of account, as and when realized and major
portion of the amount was deposited in his bank accounts from time to
time. During assessment a date-wise statement of extract from books
of account of recovery of loans given on Hundi out of surrendered
income along with books of account was provided to the Assessing
officer during the assessment proceeding.
9. Thereafter the Assessing officer gave a show cause to the
Respondent asking the assesse to produce the persons to whom, the
loans on Hundi were advanced in absence of which, the AO gave a
notice to add the amount of loan recovered by the Appellant in cash,
from recovery of loans lent on hundi, as unexplained cash credit u/s
68of the IT Act.
10. The respondent filed a reply contending that the amount
recovered in cash has been recorded in the books of account as and
when recovered and is nothing but flow of funds from source which
has already been offered to tax during the course of action u/s 133A
and in subsequent Income tax return filed. Consequently, receiving the
money in cash and deposit of the same in bank account is nothing but
an application of an already offered income and counting the same
again will amount to double counting and taxation of the same income.
Relying on various judgments the respondent pointed out to the
Assessing officer that he is entitled to telescopic set off of unexplained
income surrendered as income against its subsequent application.
11. Thereafter the Assessing officer rejected the respondent's
contention and vide assessment order dated 24.03.2015 passed under
Section 143 (3) of the IT Act and making addition as unexplained cash
deposit of Rs 7,34,79,097. The assessing officer, relying on the
Vyapam scam wherein the respondent was an accused, concluded that
the respondent failed to adequately explain the cash deposits in the
bank account by not providing details about the individuals named in
the hundis found during the survey.
12. Thereafter, in appeal CIT(A) upheld the order of the Assessing
Officer, asserting that the deposits made into the respondent's bank
account occurred after the due dates specified on the hundis. The CIT
(A) noted that the respondent failed to provide any explanation for the
delay in receiving these amounts. Furthermore, the CIT(A) determined
that merely passing entries in the books of accounts did not fulfill the
appellant's burden of justifying and proving the claims made.
Consequently, the bunching of all cash deposits was deemed dubious,
considering the background of the appellant.
13. Thereafter in further appeal by the respondent the ITAT vide
order dated 20.03.2021 allowed the appeal of the respondent.
14. For the sake of examining whether this case involves any
substantial question of law the relevant finding of ITAT as recorded in
para 55-58 of its order is reproduced below hereunder for convenience
and ready reference :
55. We have heard rival contentions and perused the
records placed before us. The sole grievance of the assessee is
against the action of Ld. A.O confirming the addition of
Rs.7,34,79,097/- as unexplained credit u/s 68 of the Act. This
unexplained cash credit is the amount of cash deposited in the
bank account held in the name of the assessee during
February, 2012 and March, 2012. Ld. A.O refused to accept
the contention of the assessee that source of cash deposited is
the maturity proceeds of the hundis i.e. short term advances
for which investment was made from unaccounted income
surrendered during the course of survey and offered to tax in
the return of income. Ld. A.O made the addition for
unexplained cash deposit merely in order to prove that since
the assessee is accused in "Vyapam case" cash so deposited
should have been from the income earned from alleged bribe
received for admission in medical colleges. In the preceding
paras we have observed that the proceeding initiated against
the assessee under the Vyapam case fall in financial year
2012-13 i.e. subsequent year whereas cash was deposited
during Financial Year 2011-12. There is no evidence on the
record to substantiate this fact that assessee received any
unaccounted income in the form of bribe for admission in
medical college during financial year 2011-12. It seems that
Ld. A.O merely on the basis of surmises and conjectures have
taken this view. He ignored the fact that the assessee has
surrendered Rs.7 crores as unaccounted income during the
year. This unaccounted income in cash was used in earning
interest income by way of giving short term advance on
hundis. Such hundis are normally issued through brokers.
Only the name of person receiving the money, his signature,
amount given as advance, rate of interest, date of entering
into the hundi agreement and the maturity date of receiving
the money are provided. When the assessee shows the original
hundi he receives the principal and interest. The assessee had
surrendered his income from other source as unexplained
money which was not recorded in the books of accounts and
the assessee failed to offer any explanation about the nature
and source of acquisition of these unexplained money/income.
The hundis were impounded during the course of survey
which itself is sufficient evidence that unaccounted income
has been invested. The unaccounted income has been offered
to tax which is not in dispute.
56. We find that the assessee subsequently fully recovered the
hundi loans in the F.Y. 2011-12 but with a delay from their
due dates, on account of original receipts being in possession
of the Department. Interest on the delayed period was also
recovered. The total sum against loans advanced and interest
thereon was recovered in cash and deposited in Bank
accounts of the Appellant. The appellant duly informed the
Income tax department vide its letter filed on09/04/2012 of
hundi loans having been recovered and deposited in his bank
account. This unaccounted income was given as short term
advance through hundis which were found during the course
of survey. Necessary entries in the books of accounts were
made on the date of survey by debiting parties account and
crediting the income from undisclosed source offered to tax.
The party account were made on the basis of names
mentioned on the hundis. The original hundis impounded by
the Income Tax Department were released and given to
assessee in November, 2011 and December, 2011. The
amounts were recovered from Hundis on following dates:-
DR.VINO
D
BHANDA
RI
DETAILS
OF LOAN
GIVEN
TO
HUNDI
INTEREST
AMOUNT RECD. ON TOTAL
S. GIVEN ON HUNDI AMOUNT DUE DATE
NO. PAYEE NAME HUNDI AMOUNT RECEIVED OF HUNDI
BHAVARLAL
MAHENDRA
1 KUMAR 5000000 150410 5150410 23-Jul-11
HUKAM
CHAND
2 LODHI 5000000 226850 5226850 23-Sep-11
KISHAN
SINGH
3 PAWAR 4000000 189510 4189510 06-Oct-11
MANGILAL
4 MOTWANI 4000000 240658 4240658 24-Aug-11
MANOJ
5 SHRIVAS 5000000 300822 5300822 13-Aug-11
NARENDRA
6 KUMAVAT 3500000 183822 3683822 28-Sep-11
RAJMOHAN
7 SHAH 4500000 236345 4736345 29-Sep-11
8 RAM SINGH 2500000 114045 2614045 27-Oct-11
RAMESH
9 AGRAWAL 2500000 112195 2612195 08-Oct-11
RAMESH
10 CHAND JAIN 5000000 262605 5262605 13-Sep-11
SURAJ
11 KULKARNI 5000000 229315 5229315 28-Nov-11
SURENDRA
12 KOTHARI 3000000 136110 3136110 20-Sep-11
SURESH AND
13 SONS 5000000 337810 5337810 19-Jul-11
VALLABH
CHAND
14 MUNDRA 5000000 229315 5229315 28-Oct-11
VIJAY
15 DHAKAD 2500000 113425 2613425 19-Sep-11
VIJAY
16 DHAKAD 4000000 179510 4179510 05-Oct-11
VIJAY
VARGIYA
17 RATHORE 4500000 236345 4736345 27-Sep-11
TOTAL 70000000 3479092 73479092
57. When the amount was recovered on belated dates as
against the maturity dates mentioned in the show cause
notice issued by Ld. A.O which included principal and
interest, they were entered in the books and the cash in
hand kept on increasing. Total of principal amount is
Rs.7 crores and Rs. 34,79,097/- being the interest
received on various dates and the assessee had this
amount as cash in hand which was deposited in the bank
on various dates in February 2012 and March, 2012.
Apparently there is a direct nexus of the cash so received
on maturity of hundis with the cash deposited in the bank
account. Whether the assessee is entitled to the
telescoping benefit of the surrendered income with the
cash deposited in the bank account needs to be analysed
in light of following judicial pronouncements :-
a. In Veerasinhaiah& co vs CIT (1980) 123 ITR 457
(SC), the Supreme court has clearly held that Secret
profit/ Undisclosed income of an Appellant earned may
constitute a fund, even thouqh concealed from which the
Appellant may draw subsequently...
b. In CIT V.s. K.S.M. GuruswamyNadar& Sons (1984)
149 ITR 127 (Madras) it was held that "In this case, in
addition to the Bogus cash credit there is an addition
towards the Suppression of profit, 171 such a case as
this When there are two additions it is always open to the
Assessee to explain that the suppressed profit during the
year has been brought in as cash credits and therefore
one has to be telescoped into the other and there can be
only one addition".
c. In Addl CIT Vs. Dharamdas Agrawal (l983) 144 ITR
143, the Madhya Pradesh High court based on the
Veerasinhaiah&Co's decision in Supreme court upheld
the Assessee's contention of undisclosed Income of the
Assessee earned in earlier asst. years being the source of
Subsequent expenditure and or debits in Assessee's
accounts.
d. In Arun Kala Vs. Asstt. CIT [2005} 98 TTJ (Jp.) 1046
the tribunal ruled that "By considering the totality of the
facts and circumstances of the case, we are of the view
that benefit of telescoping or set, Off Of secret profits or
undisclosed income of the assessee may constitute a fund
from which the assessee draw subsequently for meeting'
the expenditure or making investments. The AO may also
allow benefit of telescoping/ setting off of income against
expenditure/investment, even during the current year)
after looking into the fact that unexplained
expenditure/investment could be reasonably attributed to
the pre-existing fund of concealed income or they were
reasonably explained by reference to the concealed
income earned in the relevant year. Reliance is placed
on the case of AnantharamVeersinghaiah& Co, (supra).
e Jaqadnmba Construction CO. VS. ITO [2004] 3 SOT
670 (Jodh.) (c) RadheyShyamTanwar Vs. Asst. CIT /
20C2] 77 TTJ (Jodh. 505.)
"58. From going through the above decisions it can be
inferred that if there are two funds one which is already
taxed and other has not and there was remittances
during the accounting year for certain sum, the source of
which is not indicated then the presumption is that the
remittances should have been from the fund which has
already suffered tax. It is noteworthy that the Ld. A.O
has not rejected the books of accounts and its extracts
produced before him. In such situation as held in the
case of TolaramDaga V/s CIT 59 ITR 632 such
unchallenged account books are prima facie proof of the
correctness of the entries made therein. It is also brought
to our notice that during the survey proceedings hundis
of Rs.23.65 crores were found out of which hundis of
Rs.7 crores were in the name of the assessee and hundis
of Rs.16.65 crores in the name of BHRC. Ld. Senior
Counsel for the assessee stated that in the scrutiny
proceedings u/s 143(3) of the Act carried out in the case
of BHRC for Assessment Year 2012-13 the Ld. A.O has
accepted the assessee's contention that the deposit in
bank account of BHRC are out of the cash in hand as per
the books of accounts of BHRC which in turn was built
up on account of recovery of amount advanced as hundi
loans against which income was surrendered during
survey action. Hon'ble High Court of Punjab & Haryana
in the case of Jaswant Rai (1977) 107 ITR 477 has held
that "it was not open to department to adopt different
yard sticks in the case of different assesses where the
issue of addition to wealth pertained to the same
common asset". Accordingly here also the hundi which
were seized in one common survey account of one
common parties office location i.e. in the case of
assessee as well as BHRC of which the assessee is the
partner the department should not have taken adifferent
view. We, therefore respectfully following above
decisions are of the confirmed view that assessee is
entitled for the telescoping benefit of the income
surrendered during the year to the cash deposited in the
bank account and thus find merit in the contention of the
Ld. Senior Counsel for the assessee that the source of
cash deposits of Rs.7,34,79,097/- is the maturity
proceeds of hundis during the year which were made out
of the unaccounted surrendered income offered to tax in
the return of income for Assessment Year 2012-13. We
therefore set aside the finding of Ld. CIT(A) and find no
justification in the action of the Ld. A.O making addition
u/s 68 of the Act for unexplained cash credit of
Rs.7,34,79,097/-. We accordingly delete the addition and
allow the sole ground No.2 raised by the assessee.
15. From perusal of the aforesaid finding it is evident that the ITAT
has accepted the fact that the respondent is entitled to the telescoping
benefit of the surrendered income on which tax has been paid in the
income tax return as the source which explains the cash deposited in
the bank account, as there was a direct nexus between the cash
deposited and the maturity proceeds of the hundis found during the
survey proceedings. In coming to this conclusion the ITAT has also
extracted the names of the persons to whom hundi loans were given as
the hundis were seized during survey and the dates of maturity
mentioned therein and the said recovery of loans was accepted as the
source of deposits in the bank.
16. Thus, it is apparent that the ITAT's finding of telescoping
benefit of surrendered income vis-à-vis subsequent bank deposits was
reached only after due analysis of all the facts, circumstances, relevant
documents and evidence, statements recorded during the survey. The
ITAT has accepted the contention of the respondent that the cash
deposited in the bank accounts originated from the cash balance on
hand as per the books of account. This cash balance was, in turn,
derived from the loans recovered in cash from the individuals to whom
the loans were advanced, against which hundis were seized from the
assessee during the survey proceedings.
17. The ITAT, being the final authority for fact-finding, has
adjudicated the issue comprehensively, taking into account the
relevant facts, circumstances, documents/evidence, and judicial
rulings.
18. The finding of the ITAT as extracted, stand as matter of fact,
with no discernible error of law. Moreover, the department has not
highlighted or pointed out any factual inaccuracies or incorrect
findings recorded by the ITAT. Consequently, the entitlement of the
assessee to the telescopic benefit does not constitute any question of
law, as the benefits of telescoping must be judged and allowed based
on the facts and circumstances of the case, which has already been
thoroughly examined by the ITAT.
19. The benefit of telescoping has been approved in Principal
Commissioner of Income-tax v. Aliasgar Anvarali Varteji reported
in [2018] 96 taxmann.com 231 (Gujarat) wherein it was held that,
when the entire unaccounted income discovered during the search was
included in the overall disclosure, and the negative balance in the
books of account was due to payments made from this unaccounted
income, the assessee should not be denied the benefit of telescoping of
the initial disclosure. It was held :
3. We have heard Mrs. Mauna Bhatt, learned advocate
appearing on behalf of the revenue. At the outset, it is
required to be noted that the learned Assessing Officer
made the addition of Rs. 2,27,86,693/- on account of
peak of negative cash in the books of account.
However, the assessee explained the same and
submitted that such negative balance was on account
of payment made out of the unaccounted income, and
therefore, it was submitted that when the entire
unaccounted income found during the search was
offered as a part of the overall disclosure, the same
cannot be added in the total income as undisclosed
investment. It is required to be noted that the learned
Tribunal has rightly observed that such negative
balance was made on unaccounted income and when
necessary entries were made in the books of account, it
is bound to result in negative cash balance. We are in
complete agreement with the view taken by the learned
Tribunal. Considering the aforesaid facts and
circumstances of the case and more particularly when
the entire unaccounted income, which was found
during the search, was offered as part of overall
disclosure, learned Tribunal has rightly held that the
assessee shall be entitled to the benefit of telescoping
of negative cash balance against the disclosure made.
Under the circumstances, the learned Tribunal has
rightly allowed the assessee the benefit of telescoping
the original disclosure made against the negative
balance in the books of accounts. No substantial
question of law arises. Under the circumstances,
present Tax Appeal deserves to be dismissed and is
accordingly dismissed.
20. The ITAT has unequivocally provided clear finding of fact on
the issues raised in the present appeal. Importantly, no additional
material has been presented before this Court to demonstrate any
perversity in the findings of fact arrived at by the Tribunal.
21. The argument of the counsel for the appellant that the assessee
has not been able to establish or produce the persons to whom hundi
loans were given is answered by the ITAT by extracting the names of
the persons to whom loans were given and coupled with the fact that
these hundis were seized by the department itself leading to surrender
of income in the return shows that the department itself has accepted
these hundis as such and the income surrendered there-for and thus
now it cannot turnaround and argue that these persons are not genuine.
Moreover the argument that source of deposits in bank account is
because of Vypam scam has not been proved at any stage by the
department as has been observed by the ITAT. It is imperative to note
that the Tribunal serves as the final authority for fact-finding, and to
challenge such findings, there must be substantial evidence indicating
a perverse finding of fact by the Tribunal. In the absence of any such
substantial question having been raised to point out perversity in the
order of the ITAT, it cannot be asserted that any question of law arises
for consideration, let alone a substantial question of law, as envisaged
under Section 260A of the Income Tax Act.
22. As per Section 260A of the Income Tax Act, it is apparent that
an appeal to this Court from an order of the ITAT is permissible only
if a "substantial question of law" arises for consideration. In Shri
Chunilal V. Mehta and Sons Ltd. v. Century Spinning and Mfg.
Co. Ltd., reported in AIR 1962 SC 1314, Constitution Bench of the
Supreme Court held as follows:-
"18. The proper test for determining whether a
question of law raised in the case is substantial
would, in our opinion, be whether it is of general
public importance or whether it directly and
substantially affects the rights of the parties and if so
whether it is either an open question in the sense that
it is not finally settled by this court or by the Privy
Council or by the Federal Court or is not free from
difficulty or calls for discussion of alternative views.
If the question is settled by the highest court or the
general principles to be applied in determining the
question are well settled and there is a mere question
of applying those principles or that the plea raised is
palpably absurd the question would not be a
substantial question of law."
23. It is a settled principle of the law that an appeal to the High
Court from a decision of the Tribunal lies only when a substantial
question of law is involved, and where the High Court comes to the
conclusion that a substantial question of law arises from the said order,
it is mandatory that such question(s) must be formulated.However, the
expression "a substantial question of law" is not defined in the Income
Tax Act but has acquired a definite connotation through various
judicial pronouncements.
24. At this juncture it is pertinent to peruse Section 260A of the IT
Act which is extracted below:-
260A. Appeal to High Court.
(1)An appeal shall lie to the High Court from every order
passed in appeal by the Appellate Tribunal, if the High
Court is satisfied that the case involves a substantial
question of law.
(2)[The Chief Commissioner or the Commissioner or an
assesseeaggrieved by any order passed by the Appellate
Tribunal may file an appeal to the High Court and such
appeal under this sub-section shall be-
(a)filed within one hundred and twenty days from the date
on which the order appealed against is [received by the
assessee or the Chief Commissioner or Commissioner]
(b)******
(c)in the form of a memorandum of appeal precisely stating
therein the substantial question of law involved.
(3)Where the High Court is satisfied that a substantial
question of law is involved in any case, it shall formulate
that question.
(4)The appeal shall be heard only on the question so
formulated, and the respondents shall, at the hearing of the
appeal, be allowed to argue that the case does not involve
such question:Provided that nothing in this sub-section shall
be deemed to take away or abridge the power of the Court to
hear, for reasons to be recorded, the appeal on any other
substantial question of law not formulated by it, if it is
satisfied that the case involves such question.
(5)The High Court shall decide the question of law so
formulated and deliver such judgment thereon containing the
grounds on which such decision is founded and may award
such cost as it deems fit.
(6)The High Court may determine any issue which-
(a)has not been determined by the Appellate Tribunal; or
(b)has been wrongly determined by the Appellate Tribunal,
by reason of a decision on such question of law as is referred
to in sub-section (1).
(7)[ Save as otherwise provided in this Act, the provisions of
the Code of Civil Procedure, 1908 (5 of 1908), relating to
appeals to the High Court shall, as far as may be, apply in
the case of appeals under this section.] [ Inserted by Act 27
of 1999, Section 87 (w.e.f. 1.6.1999).]
25. The Supreme Court in Santosh Hazari v. PurushottamTiwari
reported in [2001] 3 SCC 179 has made the following observations:-
"A point of law which admits of no two opinions may
be a proposition of law but cannot be a substantial
question of law. To be 'substantial' a question of law
must be debatable, not previously settled by law of the
land or a binding precedent, and must have a material
bearing on the decision of the case, if answered either
way, insofar as the rights of the parties before it are
concerned. To be a question of law 'involving in the
case' there must be first a foundation for it laid in the
pleadings and the question should emerge from the
sustainable findings of fact arrived at by court of facts
and it must be necessary to decide that question of
law for a just and proper decision of the case. An
entirely new point raised for the first time before the
High Court is not a question involved in the case
unless it goes to the root of the matter. It will,
therefore, depend on the facts and circumstance of
each case whether a question of law is a substantial
one and involved in the case, or not; the paramount
overall consideration being the need for striking a
judicious balance between the indispensable
obligation to do justice at all stages and impelling
necessity of avoiding prolongation in the life of any
lis."
26. Similarly in Hero Vinoth (Minor) v. Seshammal reported in
[2006] 5 SCC 545, 556,Hon'ble Supreme Court has observed that:
"The general rule is that High Court will not interfere with
the concurrent findings of the courts below. But it is not an
absolute rule. Some of the well-recognised exceptions are
where (i) the courts below have ignored material evidence
or acted on no evidence; (ii) the courts have drawn wrong
inferences from proved facts by applying the law
erroneously; or (iii) the courts have wrongly cast the
burden of proof. When we refer to 'decision based on no
evidence', it not only refers to cases where there is a total
dearth of evidence, but also refers to any case, where the
evidence, taken as a whole, is not reasonably capable of
supporting the finding."
27. In Mangalore Ganesh Beedi Works v. Commissioner of
Income-tax, Mysore reporting (2015) 378 ITR 640 (SC) following
observations were made:-
19. We are not at all impressed with the submission of
learned counsel for the Revenue. There is a clear finding of
fact by the Tribunal that the legal expenses incurred by the
Assessee were for protecting its business and that the
expenses were incurred after 18th November, 1994. There is
no reason to reverse this finding of fact particularly since
nothing has been shown to us to conclude that the finding of
fact was perverse in any manner whatsoever. That apart, if
the finding of fact arrived at by the Tribunal were to be set
aside, a specific question regarding a perverse finding of
fact ought to have been framed by the High Court. The
Revenue did not seek the framing of any such question. In
this regard, reference may be made to K. Ravindranathan
Nair v. CIT [2001] 247 ITR 178/114 taxman 53 (SC)
wherein it was observed: "The High Court overlooked the
cardinal principle that it is the Tribunal which is the final
fact-finding authority. A decision on fact of the Tribunal can
be gone into by the High Court only if a question has been
referred to it which says that the finding of the Tribunal on
facts is perverse, in the sense that it is such as could not
reasonably have been arrived at on the material placed
before the Tribunal. In this case, there was no such question
before the High Court. Unless and until a finding of act
reached by the Tribunal is canvassed before the High Court
in the manner set out above, the High Court is obliged to
proceed upon the findings of fact reached by the Tribunal
and to give an answer in law to the question of law that is
before it."
20. Accordingly, we hold that the High Court was not
justified in upsetting a finding of fact arrived at by the
Tribunal, particularly in the absence of a substantial
question of law being framed in this regard. Therefore, we
set aside the conclusion arrived at by the High Court on this
question and restore the view of the Tribunal and answer
the question in favour of the Assessee and against the
Revenue."
28. Upon reviewing the impugned order passed by ITAT, it is
evident that the findings of the ITAT reflect a thorough examination of
the presented facts and are firmly rooted in established legal principles
and precedents, as outlined in the order. The revenue has failed to
effectively challenge the tribunal's findings and has not provided any
evidence or documentation to support an alternative interpretation or
contradictory information. The entire basis of the department's appeal
relies on an alleged misinterpretation of the law and a
misrepresentation of the tribunal's findings. However, upon closer
examination, it is clear that the tribunal's conclusions are not only
well-founded but also consistent with established legal principles and
precedents.
29. When tested on the anvil of the afore-noted legal principles, it is
pertinent to note that in the instant case no substantial question of law
arises from the order of the Tribunal as the appellant has raised all the
question of facts and have disputed the fact findings of the ITAT in the
garb of substantial questions of law which is not permitted by the
statute itself. No intervention is requiredin this appeal as there is no
perversity in the order passed by the ITAT since the ITAT has dealt
with all the grounds raised by the appellant in the order impugned and
has passed a reasoned and speaking order taking into consideration all
the material available on record. The Tribunal being a final fact
finding authority, in the absence of demonstrated perversity in its
finding, interference with the concurrent findings of the CIT(A) as
well as the ITAT therewith by this Court is not warranted.
30. For the aforesaid reasons, it is pertinent to note that no question
of law, much less any substantial question of law arises from the order
of the Tribunal requiring consideration of this court. There is no merit
in the appeal as making question of allowing telescoping benefit and
for making addition/deletion cannot formulate a substantial question
of law. Therefore, the present case does not involve any substantial
question of law so as to meet the provisions of section 260(A) of the
Act. Thus the substantial question of law framed on 12.09.2021 is held
not to be a substantial question of law warranting interference of this
Court since on examination of the finding rendered by ITAT it is
evident that it involves no substantial question of law.In the backdrop
of the aforesaid the present appeal does not involve any substantial
question of law and is hereby dismissed accordingly.
(S.A. Dharmadhikari) (Gajendra Singh)
Judge Judge
sh/-
