Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2022 (10) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (10) TMI 405 - HC - Income TaxRight to appeal u/s 260A - Addition on account of transport creditors - Tribunal setting aside the disallowance - as per revenue ITAT erred deleting addition as credit worthiness of the transport creditors was not established by the assessee and not appreciating that the assessee had not provided even the identity of the Transport Creditors in the absence of which the assessing authority was not in a position to conduct further enquiries"? - HELD THAT:- The appeal, be it of the Revenue or the Assessee, lies only " if the High Court is satisfied that the case involves a substantial question of law " Sub-Section (7) of Section 260A states that the provisions of Code of Civil Procedure, 1908 relating to appeals to the High Court, as far as may be, apply to these appeals. This Section is analogous to Section 100 of CPC. Noticeably, both these Sections i.e., Section 260A of 1961 Act and Section 100 of CPC do not define the expression 'substantial question of law'. The substantial question of law on which an appeal shall be heard need not necessarily be a question of law of general importance. To be 'substantial', a question of law must be debatable and it must have a material bearing on the decision of the case in the sense that if answered either way insofar as the rights of the parties are concerned. The tests are stated to be illustrative and in no way exhaustive of the powers of the High Court to entertain an appeal, if there is other substantive ground of law. It hardly needs to be stated that a provision for appeal should be liberally construed and read in a reasonable & practical manner. Substantial question of law - The question on which the appeal is admitted involves, in the first place, the ascertainment of facts as to the business expenditure in question, and in the second, the application of the correct principle of law to the fact so ascertained. Therefore, essentially such a question is only a mixed question of fact & law as observed by the Apex Court in COMMISSIONER OF INCOME TAX vs. GREAVES COTTON [1967 (5) TMI 11 - SUPREME COURT]. Therefore, we are not sure if the Revenue could maintain this appeal on the subject question. Added, there is a certain difference between an ordinary question of law on the one hand and a mixed question of fact & law, on the other vide JANARDHANA RAO [2005 (1) TMI 14 - SUPREME COURT] Ordinarily, to answer a question of law of the kind, there is no need to consult the statute book; such a question can be answered just by turning the pages of evidentiary record of the Assessment Proceedings concerned. Therefore, the said question is miles away from the precincts of Section 260A which employs the expression 'substantial question of law'. Burden of proof and impossibility of its discharge - There is absolutely no explanation as to why the AO did not choose to invoke this provision in the fitness of things. Nothing prevented him from summoning the books of accounts/documents or at least copies thereof from the custody of CBI. AO having not done his duty, could not have recorded a finding that the claim of Assessee as to transport expenditure was not substantiated. There is yet another aspect, which merits a bit deliberation. The books of accounts & documents being in the exclusive custody of the CBI Police, the Assessee except pleading this could not have done anything beyond. Arguably, in a sense, the case of Assessee was one of lack of evidence for proving the expenditure. Absence of evidence at hands is not the evidence of absence. If the Assessee fails to produce cogent evidence to prove the entirety of the claim, it is the duty of the AO to assess the allowable part of the expenditure to the best of his judgment vide CIT vs. S.P. NAIK [1998 (1) TMI 518 - KERALA HIGH COURT]. It is more so because the Assessment Order was made under Section 143(3) without rejecting the books of account under Section 145. This Appeal being devoid of merits, is liable to be rejected and accordingly it is, costs having been made easy.
|