1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR J U D G M E N T INCOME TAX APPEAL NO.70/2010 COMMISSIONER OF INCOME TAX, UDAIPUR Vs. MAHESH KUMAR Date of Judgment : 27.9.2010 HON'BLE MR. JUSTICE A.M. SAPRE HON'BLE MR. JUSTICE DINESH MAHESHWARI Mr. K.K. Bissa, for the appellant. BY THE COURT : (PER HON'BLE SAPRE,J.) This is an intra court appeal filed by the Income Tax Department under Section 260-A of the Income Tax Act against an order dated 9.4.2009 passed by I.T.A.T., Jodhpur Bench, Jodhpur (for short called Tribunal) in I.T.A. No.331/JU/2006 for the period AY 2001-2002. 2. By the impugned order, the Tribunal allowed the assessee's appeal in part and reversed the order of Commissioner of Appeals on the issue raised in this appeal. 3. So the question that arises for consideration in this intra court appeal is whether it involves any substantial question of law within the meaning of Section 260-A ibid? 4. Having heard the learned counsel for the appellant and on perusal of record of the case, we are inclined to dismiss the appeal 2 in limine as in our opinion the appeal does not involve any substantial question of law as is required to be made out within the meaning of Section 260-A ibid. 5. The issue relates to certain additions made by the A.O. in the course of assessment proceedings initiated against the assessee under the Act. The A.O. did not accept the explanation offered by assessee and treating the said amount to be that of assessee added in his total income. The CIT (Appeal) upheld it but the Tribunal set aside the order of A.O. and that of CIT (Appeal) in so far as it related to additions made by him (AO). In other words, the Tribunal accepted the factual explanation coupled with the evidence tendered by assessee in relation to the impugned additions made by A.O. and held that since the same have been properly explained and hence, they can not be included while computing the total income of the assessee. 6. In substance, the issue involved in the appeal was in relation to addition/deletion of Rs.15,45,000/- added by AO under Section 69 of the Act in the hands of assessee in the assessment year under consideration The AO did not find explanation offered by assessee to be plausible and accordingly added the amount treating it to be an income from unexplained source under Section 69A ibid. It was upheld by CIT (Appeal) but reversed by Tribunal in an appeal filed by the assessee when his appeal was allowed in part in so far as the impugned additions is concerned. This is what Tribunal held by accepting the explanation of assessee:- “While passing the assessment order, the Assessing Officer is having both the statements recorded on 10.12.2003 and 16.3.2004 of Shri Thimma Reddy, he has relied on the statement dated 10.12.2003 only and completely ignoring the statement dated 16.3.2004. On careful examination of both the statements, in the light of answers given by the said deponent 3 Thimma Reddy to the question put by the representative of the assessee to him, it is clear that the said Thimma Reddy is nothing but a novice as he categorically gave answers to the questions put by the assessee' representative while examined on 16.3.2004 that he do not know who gave the statements and as to when the statement has been recorded. While replying to another question, he unequivocally said that he did not know how much land was sold to the assessee and to another question put by ld. A.R of the assessee he categorically stated that he was told to sign the statement and he had to sign it. In the statement recorded on 10.12.2003, though it was stated that what was recorded has been stated without any fear or coercion or threat and it was translated to the deponent in Telugu by Shri N.C. Nandish and Shri Jagdish, grandsons of the deponent, but there is no such verification nor signatures found in the statement of the said two persons who alleged to have translated in Telugu to the deponent Shri Thimma Reddy. Whereas in statement dated 16.3.2004, there is verification at the end of the statement to the effect that the statement was recorded in the presence of Shri therefore,. Venkataswamy and Shri therefore,. Gajendra who explained the questions in Telugu to the deponent, that is Shri Thimma Reddy and they signed the same. Therefore, the statement dated 10.12.2003, that was heavily relied on by the departmental authoritieswill be no effect, moreso, when analyzed in the light of statement given on 16.3.2004 which is duly signed by the translators, which was not at all properly appreciated by the 4 departmental authorities. However, if the statement of said Shri Thimma Reddy given on 10.12.2003 was appraised in the light of statement given on 16.3.2004, it is clear that the said Thimma Reddy is a novice and not a reliable one. Even though there are as many as 7 executants as per sale deed dated 10.4.2000 under which the assessee has purchased plot at Bangalore, the department is satisfied with the statement of Thimma Reddy who is aged more than 70 years and knowing only vernacular language and not even properly sign his name. They have not chosen to examine the other remaining executants to cull out real nature of the transaction under the said sale deed. In the absence of statements of other executants of the sale deed, the statement given by Shri Thimma Reddy on 10.12.2003 will not stand moreso in the light of his answers given to the questions put forth by ld. A.R on his examination on16.3.2004. In a way, to put in a nut shell the department is basing on an unreliable statement. The authorities relied on by the ld. A.R before the Tribunal rendered in the following cases: 1.CIT Vs. P.Kalyanasundaram 128 ITR 259[Mad] 2.Usha Kant N Patel Vs. CIT 282 ITR 553 [Guj] 3.Ishwarya K. Rai Vs, DCIT 104 ITD 166 [Mum][TM] are also supporting this proposition. Therefore, it is found that in our considered view the addition of Rs.15,45,000/- made u/s 69 of the I.T. Act in the hands of the assessee made by the departmental authorities is only under surmises and on misappreciation of evidence made available on record. Hence the same 5 is hereby directed to be deleted by allowing the issue raised by the assessee. ” 7. Learned counsel for the appellant (Revenue) contended that firstly Tribunal erred in accepting the explanation offered by Assessee in relation to source of income. His second submission was that what was offered by the Assessee was no explanation at all and hence it should not have been accepted. His third submission was to persuade us through factual scenario of the explanation to contend that it can never be taken as satisfactory explanation for deleting the addition made by Assessing Officer and in last, he contended that when there were two statements made by assessee on the explanation relating to the impugned additions in proceedings before A.O. i.e. the one on 10.12.2003 and other on 16.3.2004, then the Tribunal should have relied on the one which supported the Revenue. We do not agree to any of these submissions for more than one reason. 8. In the first place, what is involved in the case is a pure question of fact and not any question of law much less substantial question of law. Secondly, this Court cannot again in this appeal undertake the examination of factual issues nor can draw factual inferences on the basis of explanation offered by assessee. Thirdly, once the explanation is accepted by an appellate court (Tribunal in this case), then in such event, a finding recorded on such explanation is binding on the High Court. 9. Perusal of the impugned finding quoted supra would go to show that Tribunal did examine the explanation offered by assessee in detail and then recorded a finding for its acceptance. Such finding when challenged does not constitute a substantial question of law within the meaning of Section 260A ibid in an appeal arising out of such order. 10. In our opinion, therefore, once the Tribunal accepted the explanation of assessee and accordingly, deleted certain additions 6 made by A.O. then it would not involve any substantial issue of law as such. In other words, this Court in its appellate jurisdiction under Section 260-A ibid, would not again denovo hold yet another factual inquiry with a view to find out as to whether explanation offered by assessee and which found acceptance to the Tribunal is good or bad, or whether it was rightly accepted, or not. It is only when the factual finding recorded had been entirely dehors the subject, or that it had been based on no reasoning, or based on absurd reasoning to the extent that no prudent man of average judicial capacity could ever reach to such conclusion, or that it had been found against any provision of law, then a case for formulation of substantial question of law on such finding can be said to have been made out. 11. In our view, no such error could be noticed by us in the impugned order because as observed supra, the Tribunal did go into the details of explanation offered by assessee and then accepted the explanation. As a consequence thereof, the additions made by Assessing Officer came to be deleted. 12. Coming to the last submission of learned counsel for the appellant as to which out of two statements should have been relied on, we find no merit in the same because even this issue was rightly dealt with and appreciated by the Tribunal in para quoted above. In our view it does not involve any substantial question of law because it is only a matter relating to explaining the source of income by the assessee and nothing else. It was for the Tribunal which is the last Court on facts to appreciate the explanations offered by the assessee and then record the finding on such facts. It was done. It is end of the issue so far as facts are concerned. 7 12. We thus, do not find any merit in the appeal. It fails and is dismissed in limine by holding that it does not involve any substantial question of law. No costs. [Dinesh Maheshwari ], J. [A.M. Sapre],J. /Anil/