TMI Blog1999 (7) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee company. The assessee preferred an appeal before the Commissioner of Income-tax (Appeals), who deleted the disallowance of Rs. 15,000 and Rs. 3,07,501 holding that no nexus was established between the interest-bearing funds raised and the interest-free advance. The Department preferred a second appeal before the Appellate Tribunal, which has been dismissed by the impugned order dated November 10, 1998. Mr. Sundeep Bhandawat, learned counsel appearing for the Commissioner, contends that the company might have borrowed large amounts for the purpose of its business every year, but no explanation has been given for the huge advances to the directors/shareholders. It is submitted that had this money not been advanced to the directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to formulate that question. Section 260A reads as follows : "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) An appeal under this section shall be--- (a) filed within one hundred and twenty days from the date on which the order appealed against is communicated to the appellant; (b) accompanied by a fee of ten thousand rupees where such appeal is filed by an assessee ; (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 inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion so formulated. The said amendment was introduced in the Civil Procedure Code as far back as in the year 1976. In spite of the fact that the jurisdiction of the High Court has been confined only in a case where substantial question of law is involved, it is felt the purpose of the amendment has not been achieved, because of liberal use of the provision. Thus, the apex court recently in Kondiba Dagadu Kadam v. Savitribai Sopan Gujar, AIR 1999 SC 2213 ; [1999] 3 SCC 722, was at pains to observe thus (page 2214 of AIR 1999 SC) : "Despite amendment by the amending Act 104 of 1976, section 100 of the Code of Civil Procedure appears to have been liberally construed and generously applied by some judges of various High Courts with the resu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Civil Procedure Code. There are also later decisions of the apex court, some of which deserve to be referred to, as Mahindra and Mahindra Ltd. v. Union of India [1979] 49 Comp Cas 419 and Panchugopal Barua v. Umesh Chandra Goswami, AIR 1997 SC 1041 ; [1997] 4 SCC 713. With a view to ensure that the purpose of amendment in the Income-tax Act introducing section 260A is not frustrated, it is expedient to state the parameters culled out from the aforesaid decisions as follows : (a) An appeal under section 260A cannot be entertained simply because on the same question of law, a reference has been made and it has been admitted for hearing by the High Court. (b) The finding of fact, howsoever erroneous, cannot be disturbed by the High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies in the absence of any factual format, a litigant should not be allowed to raise that question as a substantial question of law in appeal under section 260A. Where it is found that the Tribunal or appellate authority has assumed jurisdiction which did not vest in it, the same can be adjudicated in the appeal, treating it as a substantial question of law. It is contended by learned counsel that a question, whether the Tribunal was justified in deleting the disallowance in the identical circumstances was considered to be a question of law by this court in CIT v. Udaipur Mineral Development Syndicate Pvt. Ltd. [1995] 211 ITR 555. At the first instance, the said case is distinguishable from the present case. Even if it is found that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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