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Issues Involved:
1. Double claim on the write-off of 1.2 crore units of the Unit Trust of India. 2. Double claim on the adjustment loss of Rs. 7,55,31,164 related to fictitious sale and interest on loan and capital loss with Videocon International Ltd. Issue-wise Detailed Analysis: 1. Double Claim on the Write-off of 1.2 Crore Units of the Unit Trust of India: The assessee declared a loss of Rs. 50,74,40,280 in their income return, which was processed under section 143(1)(a) of the Income-tax Act, determining the loss at Rs. 50,71,95,468. The assessing authority added back Rs. 18,23,82,925, being the amount written off for 1.2 crore units of the Unit Trust of India, arguing that this amount was claimed twice-once while adopting the closing stock and again as a write-off. The assessee contended that the dealer had fictitiously recorded transactions, leading to an overstatement of the balance units by 1.20 crore units, which were written off in the books. The Commissioner of Income-tax, after examining the records, ordered the deletion of this addition, a decision that was upheld by the Income-tax Appellate Tribunal. The Tribunal found that the assessee did not claim this amount as a separate deduction and that the discrepancy was reconcilable upon detailed examination of the complex accounting system used by the assessee. The Tribunal rejected the Revenue's request for a reference to the High Court, stating that the findings were factual and no question of law arose. 2. Double Claim on the Adjustment Loss of Rs. 7,55,31,164 Related to Fictitious Sale and Interest on Loan and Capital Loss with Videocon International Ltd.: The assessee claimed a trading loss of Rs. 7,55,31,164, explaining that this amount was in settlement of an agreement with Videocon International Ltd. The payment was set off against the sum due from Videocon International Ltd. on the sale of debentures of Videocon Appliances Ltd. The assessing authority treated this as a capital loss rather than a trading loss and added it back. The Commissioner found that the sum was erroneously credited to the income side of the trading account and that the profit was overstated by the amount of Rs. 7.50 crores. The Tribunal upheld the Commissioner's decision, stating that the loss was not separately claimed in the income computation statement and that the assertion of a double claim by the Assessing Officer had no basis. The Tribunal again rejected the Revenue's request for a reference to the High Court, emphasizing that the findings were based on a factual examination of the accounts and materials. General Observations and Conclusion: The High Court noted that the Tribunal is the final fact-finding authority and that its findings can only be challenged if they are perverse or not based on evidence. The Court emphasized that mere disagreement with the Tribunal's findings does not constitute a question of law. The Court also criticized the Department for filing petitions in virtually every case decided against it by the Tribunal, urging a more judicious scrutiny process to avoid unnecessary litigation. The Court highlighted that the Tribunal's findings were based on detailed factual examination and were not opposed to any provisions of law or material facts. Consequently, the High Court rejected the Revenue's petition, stating that no question of law arose for consideration. The Court also warned the Department to ensure a proper scrutiny process before filing such petitions in the future, failing which exemplary costs might be imposed. Separate Judgment: M. F. Saldanha J. emphasized the need for the Department to conduct a judicious scrutiny process before filing petitions and criticized the Department's cavalier presentation of its case before the Tribunal. He reiterated that the High Court should not be used as a corrective or remanding agency and that the Department must present valid points of law rather than mere factual disagreements. The Court concluded by rejecting the petition and instructing that a copy of the judgment be forwarded to the concerned officers of the Department.
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