1997 (4) TMI 50 - HC - Income Tax

Summary

Issues: Interpretation of a 'kacha bill' in an income tax assessment.

Summary:
The High Court of Himachal Pradesh addressed the issue of whether the Appellate Tribunal was correct in upholding the addition of Rs. 1,12,275 based on a 'kacha bill' acknowledged by the partner of the firm. The assessee, a forest contractor, presented a bill of Rs. 1,12,275 to the Income-tax Department, which was later confirmed by a partner as a 'kacha bill' prepared by an accountant no longer associated with the firm. The Income-tax Officer made the addition based on this information.

Upon appeal, the Commissioner of Income-tax overturned the addition, stating that the bill was not from the official bill books and was not recognized as belonging to the firm, with the purchasers denying the transaction. However, the Tribunal reversed this decision and reinstated the Income-tax Officer's findings, highlighting the partner's responses regarding the bill not being a part of the regular accounts but still accepted as genuine by the assessee.

The High Court emphasized that the issue was factual rather than legal, noting that the Tribunal's reference for natural justice was not in line with the Income-tax Act's requirement to refer legal questions. Despite this, the Court affirmed the Tribunal's decision, stating that the addition based on the 'kacha bill' acknowledged by the partner was justified. The Court answered the referred question in the affirmative, supporting the Tribunal's stance on the matter.