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Malti Prasad Ram Prasad Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference Application No. 190 of 1983
Judge
Reported in(1985)45CTR(All)87; [1986]157ITR601(All); [1985]22TAXMAN162(All)
ActsIncome Tax Act, 1961 - Sections 69, 69A and 256(2)
AppellantMalti Prasad Ram Prasad
RespondentCommissioner of Income-tax
Appellant AdvocateS.P. Gupta and ;Rajesh Kumar, Advs.
Respondent AdvocateBharatji Agrawal and ;M. Katju, Advs.
Excerpt:
- .....the business premises of the assessee on august 20, 1976, and there certain articles relating to pawn business were discovered, against which the pawn business to the extent of rs. 54,100 was carried on. the assessee was called upon to explain the investment of rs. 54,100 in the pawn business. then the assessee explained that pawn business to the extent of rs. 54,100 had been carried on by one shrimathi janki devi, daughter of shrimati bhami devi. shrimati janki devi is the wife of haiti prasad, one of the partners in the assessee-firm. she filed an affidavit in support of the contention that the pawn business to the extent of rs. 54,100 belonged to her and not to the assessee-firm. she was cross-examined on the affidavit and from her statement, the assessing authority drew a.....
Judgment:

Om Prakash, J.

1. This is an application under Section 256(2) of the Income-tax Act, 1961, by the assessee, a firm, engaged in the business of pawning and sale of ornaments during the assessment year 1977-78, for which previous year ended on Diwali, 1976, for asking the Tribunal to referthe following questions:

' 19(a) Whether, on the facts and in the circumstances of the case, the Tribunal's order sustaining the addition of Rs. 54,100 in the hands of the assessee-firm is wrong and perverse based on irrelevant material and without consideration of relevant and material evidence ?

(b) Whether, on the facts and in the circumstances of the case, the Tribunal's order sustaining the addition of Rs. 82,400 in the hands of the assessee-firm is wrong and perverse based on irrelevant material and inadmissible evidence and without consideration of relevant and material evidence ?

(c) Whether the Tribunal was justified in law in sustaining the additions of Rs. 54,100 and Rs. 82,400 made by the Department by taking recourse to the provisions of section 69 and section 69A of the Income-tax Act, 1961, without the Department having discharged the onus which lay on it to prove that the investments were made by the assessee-firm and/or it was the owner of the money, bullion, etc., in respect of which the additions were made, on the facts and in the circumstances of the case ?

(d) Whether the Tribunal was right in holding that silver ornaments, bullion and coins represented unexplained income of the assessee when the original source of their existence had been explained--the source being that they were coming in their hands for the last thirty years ?

(e) Whether the valuation of the silver ornaments at Rs. 82,400 is based on any legal evidence ?

(f) Whether the Income-tax Appellate Tribunal was justified in not adjudicating on the ground of appeal No. 3 relating to the addition of Rs. 41,000 for alleged unexplained value of gold ornaments and whether their order is not vitiated on that account ?

(g) Whether in view of the fact that out of the total gold ornaments weighing at 1,975 grams found from the business premises, the explanation in respect of the gold ornaments weighing 1,479 grams has been accepted as belonging to other persons on their admission, the Tribunal was justified in rejecting the claim of, 496 grams of gold ornaments belonging to Smt. Janki Devi who has also admitted the gold ornaments of 496 grams as belonging to her '

2. We have heard Sri S. P. Gupta., learned counsel for the assessee, and Sri Mankandey Katju, learned standing counsel for the Revenue. Sri Gupta pressed before us the question, as stated in paragraph 19(a) and (e). He states that questions as stated in paragraph 19 (b), (c) and (d) are nothing but elaboration of question in para 19(a).

3. First we take up the question as stated in paragraph 19(a). There was a search and seizure operation at the business premises of the assessee on August 20, 1976, and there certain articles relating to pawn business were discovered, against which the pawn business to the extent of Rs. 54,100 was carried on. The assessee was called upon to explain the investment of Rs. 54,100 in the pawn business. Then the assessee explained that pawn business to the extent of Rs. 54,100 had been carried on by one Shrimathi Janki Devi, daughter of Shrimati Bhami Devi. Shrimati Janki Devi is the wife of Haiti Prasad, one of the partners in the assessee-firm. She filed an affidavit in support of the contention that the pawn business to the extent of Rs. 54,100 belonged to her and not to the assessee-firm. She was cross-examined on the affidavit and from her statement, the assessing authority drew a conclusion that pawn business to the extent of Rs. 54,100, for which the addition was made in the assessment of the assessee, belonged to the assessee and not to Shrimati Janki Devi. In her statement, Shrimati Janki Devi appeared to be fully oblivious of the details of the pawn business and, therefore, the assessing officer drew the conclusion that she had not carried on pawn business during the relevant year. The Tribunal has agreed with the finding of the assessing officer which was based on an appraisal of the statement of Smt. Janki Devi. The question is whether any question of law arises from such finding of the Tribunal. In our opinion, no question of law arises from the finding of the Tribunal. It was also stated by Shrimati Janki Devi that she had startedpawn business with an amount of Rs. 20,000 which she purportedly received under a will which was executed by her mother. The scribe of ' the will and an attesting witness to the will had been produced before the assessing officer. The argument of Shri Gupta is that the statement of the scribe and the attesting witness were not at all considered by the Tribunal and there being material omission on the part of the Tribunal, a question of law has arisen. We do not find any force in the submission of Sri Gupta. The main question was whether the pawn business was carried on by Shrimati Janki Devi. On this question, the statements of the scribe and the attesting witness to the will throw no light. Consequently, the omission on the part of the Tribunal to take into consideration, the statements of the scribe and the attesting witness cannot be said to be a material omission and that does not give rise to any question of law so far as addition of Rs. 54,100 is concerned.

4. So far as the question as stated in paragraph 19(e) is concerned, it is patently a question of fact and no direction can be given to the Tribunal to refer the same to this court under Section 256(2) of the Act. Weight of the silver ornaments, bullion and coins has not been disputed. There is no dispute about the rate also that has been applied by the assessing officer. The only argument of Sri Gupta in this regard is that impurity was not correctly estimated by the assessing officer and the appellate authority. On the given facts and circumstances, what should be the impurity is purely a question of fact and no question of law arises from the findings arrived at regarding this question.

5. In the result, the application is dismissed. No order as to costs.


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