TMI Blog1998 (6) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... dopted a circuitous route apparently to avoid payment of the stamp duty payable on any such transfer. This included the dissolution of the original partnership and constitution of two new partnership firms one in the name of Laxmi Estates and the other in the name of Saraswati Estate. While the petitioners K. L. A. Padmanabha and K. S. Swamy, were inducted as partners in Saraswati Estate, Sri K. L. Srihari and K. L. Swamy, were taken as partners in the other partnership, namely, Laxmi Estate, in terms of two partnership deeds both executed on November 17, 1984. These partnerships were within a period of three months dissolved by two different deeds dated March 6, 1985, under which all other partners except the petitioners retired on being paid their share in cash. The net effect was that the estates stood transferred to the petitioners in lieu of the capital brought in by them. The payments made to the out going partners in each one of the partnerships, was shown to be Rs. 45 lakhs so that a total sum of Rs. 90 lakhs Was paid as consideration for the transfers in question. Shortly after the finalisation of the above deal a search and seizure was carried out by the Income-tax Depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... summoned Thyagarajan for the purpose of cross-examination on March 14, 1988. Instead of cross-examining Thyagarajan and challenging his version above the payment of an additional payment of Rs. 25 lakhs towards the consideration for the sale of the estate in question, the petitioners chose to surrender the opportunity granted to them and on March 14, 1988, itself filed two returns-one for the assessment year 1980-81 and the other for 1985-86 disclosing a sum of Rs. 10 lakhs and Rs. 15 lakhs, respectively, as taxable income in their capacity as a body of individuals. Based on these returns, the Department made a protective assessment reserving its right to make a substantive assessment against the petitioners in their individual assessments.. The Department's view apparently was that the petitioners were assessable as individuals for the amounts disclosed by them and not as a body of individuals. This position was assailed by the petitioners in art appeal preferred before the Commissioner of Income tax (Appeals), who accepted the petitioners' contentions and held that they were liable to be assessed as a body of individuals and not as individuals. The result was that the protective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs to file their returns to avoid any adverse consequences. Reliance was in support placed by Mr. Sarangan, on the decisions of this court in (1) Jadav Desai (S. R.) v. WTO (Sixth) [1980] 121 ITR 531 ; (2) Shantha Devi (Smt.) v. WTO [1980] 121 ITR 703 (Kar). Reliance was also placed by him upon the decisions of the Allahabad and Bombay High Courts in Hakam Singh v. CIT [1980] 124 ITR 228 and Rohitkumar and Co. v. F. J. Bahadur, CIT [1991] 190 ITR 93 (Bom). The crucial question that falls for consideration is : Whether the disclosures made by the petitioners in the returns filed by them were voluntary and in good faith. The question it is obvious is a mixed question of law and fact with two distinct facets one relating to the true meaning of the expressions "voluntary" and "good faith" appearing in section 273A of the Act and the other relating to the factual matrix to which the said expressions shall have to be applied. Judicial pronouncements on analogous questions would therefore be relevant only to the extent the same interpret the two expressions. The decisions relied upon by Mr. Sarangan, and those that were referred to by Mr. Sheshachala, do not however show any cleavage in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deal had been blown and thus they could not escape a finding on the basis of the available material to the effect that they had paid an undisclosed sum of Rs. 25 lakhs to Mr. Thyagarajan, in connection with the sale in question. The "inevitability" of such a finding was according to the Revenue, the sole reason under lying the disclosures made by the petitioners the question then is whether this inference of the Revenue is justified and whether this court would be justified in substituting its own finding on that factual aspect of the matter for that of the Commissioner. It is now fairly well settled that this court does not exercise appellate powers in the name of proceedings under article 226 so as to reappreciate the facts and the evidence involved in the determination by the authorities below and to substitute its own findings for those returned by such authorities. This court would be justi fied in interfering with a finding of fact only in cases where the finding is perverse in that there is no evidence to support the same or that no rational person could have arrived at the conclusion recorded by the authority on the basis of the available material. Short of perversity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the amount disclosed was the additional consideration for the purchase of estates by the Khodays and that the said payment was according to them assessable in their hands as a body of individuals and not as individuals. Having thus disclosed the amount and by necessary implication accepted its utilisation towards the purchase of the estates it is not possible for the petitioners to contend that any such disclosure or admission was made or accepted not because any such consideration had actually changed hands but with a view to buy peace with the Department and avoid a long term and expensive legal battle over the question. The petitioners are in my opinion estopped from raising any such contention specially when the disclosures come after an initial denial of the making of the payments and only when Thyagarajan stood his ground and offered himself for cross-examination in support of his version that such a payment was made. In the totality of these circumstances I do not see any error of law in the view taken by the Commissioner that the disclosure was involuntary. The disclosure cannot even be termed as one made in good faith. The expression "good faith" means an act done ..... 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