TMI Blog1976 (11) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... d precious stones. During the course of the examination of the books of the assessee, the Income-tax Officer came across certain loans alleged to have been taken on hundis by the assessee and was of the view that those loans are not real and had not been taken for business purposes. After examining the partners as also a broker through whom sonic of the loans under the hundies had been taken, the Income-tax Officer held the view that the assessee did not get actually cash as loans through the broker, but really brought in his own unaccounted monies in a circuitous way. The Income-tax Officer, therefore, took the peak credit of Rs. 1,25,000 which was the largest amount of such camouflaged loans as disclosed in the books and treated it as the income of the assessee from undisclosed sources. He added on this sum to the income of the assessee and made certain other additions and passed the final order of assessment dated March 29, 1966. The assessee took up the matter in appeal to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner agreed with the assessing officer and also took the view that the sum of Rs. 1,25,000 represented the assessee's own money; but the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable income. The argument is that once the peak credit in the account books remained unexplained, then there should be an automatic addition of such a credit to the income of the assessee without any more consideration of other facts. We are unable to agree. Though the powers of the Tribunal are expressed in sections 253 and 254 of the Income-tax Act, 1961, equivalent to section 33 of the earlier Act, and even though, prima facie, the appellate powers of the Tribunal are expressed to be so wide, yet there are in-built restrictions regarding exercise of the jurisdiction of the Tribunal under the very same section which creates such a power. Section 254, equivalent to section 33(4) of the earlier Act, binds the Tribunal to limit the scope of the appeal to the subject-matter before it. Obviously, therefore, it cannot traverse beyond the scope of the appeal. The Supreme Court in Hukumchand Mills Ltd. v. Commissioner of Income-tax [1967] 63 ITR 232 expressed the view that the apparent wide scope of the power of the Tribunal as could be culled out from the expression " pass such order as the Tribunal thinks fit " would include all powers, excepting the power of enhancement, which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction which is created by statute and circumscribed by the ratio in several authoritative judicial pronouncements; particularly if the question involved revolves round facts and appreciation of the same; the matter becomes more difficult for this court, when an occasion arises for a judicious interference with the findings of the Tribunal. Even though the normal rules of evidence bind the taxing officers, yet the Tribunal which has a peculiar judicial function, to perform has certain inhered responsibility within the framework of the exercise of such jurisdiction. When in a given case it is reasonably clear that all the evidence before the Tribunal has not been considered in its correct perspective and if important evidence which touches upon the subject-matter has either been ignored or not traversed or due consideration and reasonable care has not been given to the weighty facts appearing on the record, then the court of reference should not be slow to interfere and do justice as justice should, always seem to be done. The learned counsel for the department referred to Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax [1954] 26 ITR 775 (SC). The Supreme Court therein sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon some evidence only ignoring other essential matters that would amount to a misdirection in law and the finding would give rise to a question liable to be referred to the court. In Killick Nixon and Co. v. Commissioner of Income-tax [1967] 66 ITR 714, the Supreme Court reiterated the position by stating that the Tribunal being the final authority on the questions of fact, it was bound to consider all the evidence and arguments raised by the parties and a bare recording of a conclusion without setting out any reason in support thereof would amount to a misdirection and was equivalent to non-application of its mind properly to the material on record. The only embargo which is set upon the jurisdiction of the High Court is to prevent the High Court from sitting as a court of appeal in a reference and to embark upon a reappraisal of the evidence and a reappreciation thereof. It is in the light of the above decisions, the material available on record in this case has to be considered and it is to be found whether the Tribunal adverted to such material fully and reasonably and whether it has given due consideration and care to such impact which such material may have in the circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of Rs. 56,258 in the assessment. In any event, therefore, the loans to the extent of Rs. 56,258 was properly retained by the Appellate Assistant Commissioner. We do not see sufficient justification to interfere with the addition of the sum of Rs. 56,258. " The next aspect to be considered is as to whether the Tribunal has given any reason which can be accepted by a court of law as to why the hundies should be treated as non-genuine and should be ignored. It is not in dispute that some of the bankers discounted the said hundies. This is seen, for example, from the account of Seth Kubchand Vashumal. There, they referred to the fact that they have discounted the hundies in the course of their business and we find from their account books that the so-called non-genuine advances to L.K.S. Jewellers is also entered there. This is only illustrative of the fact that the bankers who gave evidence and who even according to the Tribunal wanted to save their skin, admittedly discounted the hundies in question. If the hundies are merely fictitious, it is not possible to accept with precision that they could be the subject-matter of discounting. The bankers' vague statements that they h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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