Law: Income Tax Act, 1961

Section: 256,256(2)

Income tax.... Reference Question of law Additions made on account of bogus purchases and unaccounted income from sales Appellate Tribunal -Deleting additions Does not give rise to question of law Indian Income Tax Act, 1961, S.256(2). Whether the Appellate Tribunal was right in deleting additions made on account of bogus purchases of ground nut cakes as well as additions made on account of unaccounted income from sale of ground nut oil does not involve a question of law. The order of the Karnataka High Court (M.F. Saldanha and D.V. Shylendra Kumar, JJ.), dated February 28th, 2001, delivered by Saldanha, J., was as follows: We have heard the petitioners learned counsel and the respondents learned counsel at considerable length in this civil petition. Whereas it is the case of the Revenue that a reference is not only justified but is necessary on the record of the present case, principally on the ground that the circumstances under which the original assessment order was set aside and the appellate order was confirmed, are vulnerable in law, the respondents learned counsel has vehemently submitted that a careful scrutiny of the record will indicate that this is a case in which the authorities at each level were concerned only with a pure appreciation of evidence. It was also our view with a certain degree of force, that the conclusions that were arrived at by the original assessing authority were virtually run away conclusions in so far as these findings cannot be justified on the basis of whatever materials are on record and that consequently, where the authority had rightly interfered, the present attempt is to reopen the issue relating to the appreciation of evidence. Our attention has been drawn to a long list of s wherein the Courts have unequivocally held that if the issue is confined to a pure appreciation of evidence or pure question of fact that it is totally beyond the scope of a reference to the High Court. We are in respectful agreement with this proposition, but what we need to record at this stage is that, a careful assessment of the present record will indicate that there is a definite point of law involved in the present proceedings and that…

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