Law:

Section:

Section 260A of the Income-tax Act, 1961 - High Court, appeals to - Assessment year 1994-95 - Whether question as to whether explanation offered by assessee in relation to particular credit or debit entry in profit and loss account is acceptable or not, is a question of fact and High Court in appeal under section 260A cannot go into same with a view to find out whether reasoning assigned by Tribunal in accepting that explanation is right or not - Held, yes - Whether it is only when an appellant is able to point out extreme perversity in that factual finding, such as it being totally de hors provisions of Act, or any law, or explanation offered, a substantial question of law emerges out of such finding - Held, yes FACTS The assessee derived income from liquor contract. In the course of its assessment, dispute arose in regard to four entries, which included debiting of higher purchase price of country liquor by assessee in its profit and loss account. The Assessing Officer made the assessment. The Commissioner, finding certain defects/infirmities in regard to certain entries relating to excessive sealing charges, purchase of country liquor and its purchase price and shortage of one M.G. to be prejudicial to the interest of revenue, passed an order under section 263, not accepting the assessee's explanation. On appeal, the Tribunal allowed the assessee's appeal in part. On revenue's appeal : HELD There was no substantial question of law as contemplated under section 260A. None of the questions sought to be raised by the revenue satisfied the rigour of section 260A and, hence, the appeal was liable to be dismissed. [Para 11] The appeal did not involve any interpretation of section, rule or circular. It also did not involve any interpretation of judicial decisions. The question as to whether explanation offered by an assessee in relation to particular credit or debit entry in profit and loss account is acceptable or not is a question of fact. What was not accepted by the Commissioner in section 263 proceedings initiated against the assessee, found acceptance of the Tribunal in part. The High Court in further appeal could not go into the same with a view to find out…

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