Judgment:
N.N. Mathur, J.
1. This appeal under Section 260A of the Income-tax Act, 1961, is preferred by the assessee against the order of the Income-tax Appellate Tribunal, Jodhpur Bench, dated March 3, 2000, with respect to the assessment year 1993-94.
2. The appellant-assessee is running a shop in the name of Kishan Mishthan Bhandar engaged in manufacture and sale of sweets and namkeen. A survey was undertaken under Section 133A of the Income-tax Act of the shop as well as the factory premises by the income-tax authorities on December 5, 1995.The books of account of the appellant were impounded in accordance with the provisions of Section 131 of the Income-tax Act. The Sales Tax Department also conducted a survey independently at the premises of the assessee on February 15, 1995. The assessing authority observed a number of defects in the books of account maintained by the appellant such as non-maintenance of stock register, purchase and sales were not fully vouched, lumpsum payments were made to the labourers, wage register not maintained. On scrutiny of impounded documents, it was found that certain entries were not verified. Relying on specific defects, the Assessing Officer invoked the provisions of Section 145(2) of the Income-tax Act after giving specific opportunity to the appellant. The appellant was confronted with the entire material before the assessing authority. The Assessing Officer on the basis of the record and the statements of the various karigars and salesmen made the addition to the trading results declared by the assessee. The assessing authority completed the assessment under Section 143(3) of the Income-tax Act. The appellant preferred an appeal against the order of the assessing authority before the Commissioner of Income-tax (Appeals), Bikaner. The Appellate Commissioner reduced the estimation of sales and also the gross profit to a great extent. The appellant-assessee preferred a further appeal to the Income-tax Appellate Tribunal. The Appellate Tribunal considered all the contentions raised in depth and detail. The Appellate Tribunal dismissed the appeal by a well reasoned judgment dated March 3, 2000.
3. It is contended by Mr. Mahendra Gargieya, learned counsel appearing for the appellant-assessee, that the Appellate Tribunal was not justified in considering and heavily relying upon the statements of various workers and salesmen as their statements were recorded behind the back of the appellant, who was never given an opportunity to cross-examine them. According to learned counsel such evidence could not have been relied upon. We are not impressed with the contention of learned counsel. Under the newly added provisions of Section 260A of the Income-tax Act, a second appeal is maintainable under the Income-tax Act only on a substantial question of law. It is a well settled position of law that a competent income-tax authority can inspect the business premises and record the statements under the provisions of Section 133A. Such an authority cannot demand collection of tax on the alleged undisclosed income then and there. Such an authority is required to send the statement of the material collected to the Assessing Officer if he himself is not the income-tax authority carrying out the survey operation. There is no provision for permitting a cross-examination of the person, whose statement is recorded during the survey. In the instant case, the estimation of sales has not been made solely on the basis of the statements of the witnesses recorded during the survey. It is based on the entire facts relating to the business of the assessee which includes location of the shop, past history, various defects in thebooks of account and the statements of the persons available on the spot during the survey. Thus, it cannot be said that the estimation is solely on the basis of the statements of the witnesses recorded on the spot. The conclusion arrived at by the assessing authority and modified by the Appellate Commissioner is based on the material on record. The finding has been confirmed by the Appellate Tribunal. The sufficiency or adequacy of evidence necessary for reaching the conclusion of fact does not give rise to a question of law much less a substantial question of law. Thus, no substantial question of law arises from the order of the Tribunal.
4. Thus, this appeal being bereft of merit, is dismissed.