Commissioner of Income-tax Vs. Destiny Investments (P.) Ltd. - Court Judgment

Excerpt:
- indian penal code, 1890.section 306 :[dalveer bhandari & harjit singh bedi,jj] abetment of suicide deceased, a married woman, committed suicide - allegation of abetment of suicide against appellant husband and in-laws - ocular evidence was sketchy - dying declaration recorded by tahsildar completely exonerated all accused in-laws of any misconduct dispelling any suspicion as to their involvement - letter of threat allegedly written by appellant to father of victim was concocted piece of evidence held, though presumption against appellant can be raised, it cannot be said that onus shifts exclusively and heavily on him to prove his innocence. conviction of appellant is liable to be set aside. a.r. tiwari, j. 1. the applicant, commissioner of income-tax, bhopal, has filed this application under section 256(2) of the income-tax act, 1961, seeking a direction to the income-tax appellate tribunal, indore, to state the case arid refer the question of law to this court arising out of its order dated october 20, 1993, passed in i. t. a. no. 889/(ind) of 1992.2. the facts lie in a narrow compass. the assessee was a leasing company and was observing the calendar year as its accounting period since before the assessment year 1989-90. it was also observing cash system. with effect from june 15, 1988, after the amendment of section 209 of the companies act by the companies (amendment) act, 1988, it had to switch over to the mercantile system of accountancy. therefore, it regularised all its accounts in accordance with the mercantile system. the liabilities were provided for. the assessee thus made a provision of rs. 1,84,381 regarding interest payable to maheshwari nutrients limited for the period december 1, 1986, to march 31, 1989. the assessing. officer disallowed interest of rs. 1,16,175 on the ground that the same pertained to the period december 1, 1986, to march 31, 1987, uncovered by the instant assessment year. on appeal, the commissioner of income-lax (appeals) set aside the assessment with the observation that it needed to be verified as to how the money received was utilised. on further appeal, the tribunal held that the interest accrued during the period when the assessee was observing the cash system of accountancy can be allowed in which it had to switch over to the mercantile system of accountancy by virtue of the amendment of the companies act. the tribunal, therefore, deleted the entire provision of rs. 1,16,175. aggrieved by the order of the tribunal, the applicant filed the application for statement of the case and reference of the question of law as proposed. the application was rejected. the applicant, therefore, filed this application under section 256(2) proposing the undernoted question of law :'whether, on the facts and in the circumstances of the case, the tribunal was justified in holding that the interest accrued during the period when the assessee was observing cash system of accountancy can be allowed in the assessment year in which it had to switch over to the mercantile system of accountancy by virtue of the amendment of the companies act ?'3. on september 25, 1995, a show-cause notice against the admission was issued.4. we have heard shri d.d. vyas, learned counsel for the applicant, and shri j.w. mahajan, learned counsel for the non-applicant, on the question of admission.5. the tribunal concluded and allowed the appeal as under :the addition is apparently arbitrary without advertence to the facts on record. it is not the case of the revenue that the payment of interest at 18 per cent. to some of the creditors of the assessee was not genuine. similarly, it is not the case that charging of interest from heo sack pvt. ltd. at 14 per cent. was not genuine. the assessee had paid and received interest at contractual rates in view of the exigencies of the business. the tax authorities should only look to the genuineness and the reality of the transaction and should not try to introduce their wisdom in the business of the assessee.6. the tribunal held that there was no material to show that charging of interest from the. concerned party, was not genuine. in our view, this is a finding of fact and as such does not give rise to any question of law.7. shri vyas submitted that the aforesaid question is a question of law and arises out of the order passed by the tribunal. shri mahajan opposing the admission contended that the order of the tribunal is based on appreciation of facts and does not give rise to any question of law. he placed reliance on cit v. kesoram industries and cotton mills ltd. : [1993]204itr154(cal) . in our view, it is a pure question of finding of fact.8. this finding of fact, not shown to be perverse or perishable, reached by the tribunal did not give, as held in cit v. ashoka marketing ltd. : [1976]103itr543(sc) and in cit v. kotrika venhataswamy and sons : [1971]79itr499(sc) , rise to any question of law and as such the tribunal rightly rejected the reference application. recourse to section 256(2) of the income-tax act is thus, not justified and is acarpous. we, therefore, hold that the order of the tribunal is based on proper application of facts and it does not give rise to any question of law as proposed. accordingly, we find that this reference is without merit and deserves fate of dismissal. accordingly, we dismiss this reference application but without any orders as to costs.