HC denied to admit appeal as issue relating to valuation of assets made by ITAT was question of fact
August 29, 2014[2014] 48 taxmann.com 22 (Andhra Pradesh)/[2014] 361 ITR 668 (Andhra Pradesh)
WT : Where Tribunal relying upon its orders passed in earlier assessment years, reduced valuation adopted by Departmental valuer in respect of beneficial interest of assessee in jewellery held by a trust on account of various factors such as joint ownership, cumulative burden of tax liabilities, hazard and risk of litigation etc., said question relating to valuation of asset being a pure question of fact, impugned order passed by Tribunal did not require any interference.
AO not authorized to make any estimate U/s. 142(2A) of Income tax Act, 1961
In the present case, there was no basis for the AO to determine that the true value of the property was Rs. 1.25 crores, by adopting the return on capital method. The AO was under a duty first to ascertain what was according to him the true cost of the property. Not having done so, that error could not have been compounded by adopting a completely different methodology without any positive finding as to the cost of acquisition. The following conclusions of the CIT (A) extracted below, therefore, could not be faulted with:
"On a consideration of the above facts and the legal position as emerging from the decisions relied upon by the appellant it is seen that the addition made for Rs. 74 lacs is purely based on estimate and conjecture and there is no substance in the estimate made by the AO, who in any case is not authorized to make any estimate under the provisions of section 142(2A) of the Income-tax Act. Moreover, section 69/69B are deeming provisions and it is trite law that deeming provisions are to be strictly interpreted. AS there is no invoke section 69/69B therefore for this reason too the addition made for Rs. 74 lacs is not sustainable in law. Accordingly, the Assessing Officer is directed to delete the addition made for Rs. 74 lacs on account of unaccounted investment made by the assessee out of undisclosed sources of income."
For the forgoing reasons, this Court finds that there is no substantial question of law requiring determination in the present appeal. The same is consequently dismissed.
SC explains scope of revisional power of High Courts
Even the wider language of Section 20 of the Kerala Rent Control Act does not enable the High Court to act as a first or a second court of appeal. We are in full agreement with the view of the 3-Judge Bench in Rukmini Amma Saradamma v. Kallyani Sulochana and others; [(1993) 1 SCC 499] that the word "propriety" does not confer power upon the High Court to re-appreciate evidence to come to a different conclusion but its consideration of evidence is confined to find out legality, regularity and propriety of the order impugned before it. We approve the view of this Court in Rukmini Amma Saradamma v. Kallyani Sulochana and others; [(1993) 1 SCC 499].
The observation in Dr. D. Sankaranarayanan v. Punjab National Bank; [1995 Supp. (4) SCC 675] that the revisional Court under Section 25 of the Tamil Nadu Rent Control Act cannot reverse the findings of the first appellate Court upon a reassessment of evidence is in line with Rukmini Amma Saradamma v. Kallyani Sulochana and others; [(1993) 1 SCC 499] and we approve the same.
Similarly, the view in Ubaiba v. Damodaran; [(1999) 5 SCC 645] , which has followed Rukmini Amma Saradamma v. Kallyani Sulochana and others; [(1993) 1 SCC 499] that, under Section 20 of the Kerala Rent Control Act, the revisional court will not be entitled to re-appreciate the evidence and substitute its own conclusion in place of the conclusion of the Appellate Authority is the correct view and gets our nod.
In T. Sivasubramaniam and Ors. v. Kasinath Pujari and Ors.; [(1999) 7 SCC 275] this Court has held that under Section 25 of the Tamil Nadu Rent Control Act, the High Court does not enjoy an appellate power to reappraise or reassess the evidence for coming to a different finding contrary to the finding recorded by the courts below. This view is the correct view and we approve the same.
The observation in Ramdoss that the High Court in exercise of its revisional jurisdiction cannot act as an appellate court/authority and it is impermissible for the High Court to reassess the evidence in a revision petition filed under Section 25 of the Act is in accord with Rukmini Amma Saradamma v. Kallyani Sulochana and others; [(1993) 1 SCC 499] and Dr. D. Sankaranarayanan v. Punjab National Bank; [1995 Supp. (4) SCC 675] . Its observation that the High Court can interfere with incorrect finding of fact must be understood in the context where such finding is perverse, based on no evidence or misreading of the evidence or such finding has been arrived at by ignoring or overlooking the material evidence or such finding is so grossly erroneous that if allowed to stand, will occasion in miscarriage of justice. Ramdoss17 does not hold that the High Court may interfere with the findings of fact because on re-appreciation of the evidence its view is different from that of the first Appellate Court or Authority.
The decision of this Court in V.M. Mohan v. Prabha Rajan Dwarka and Ors.; [(2006) 9 SCC 606] is again in line with the judgment of this Court in Rukmini.
We hold, as we must, that none of the above Rent Control Acts entitles the High Court to interfere with the findings of fact recorded by the First Appellate Court/First Appellate Authority because on re-appreciation of the evidence, its view is different from the Court/Authority below. The consideration or examination of the evidence by the High Court in revisional jurisdiction under these Acts is confined to find out that finding of facts recorded by the Court/Authority below is according to law and does not suffer from any error of law. A finding of fact recorded by Court/Authority below, if perverse or has been arrived at without consideration of the material evidence or such finding is based on no evidence or misreading of the evidence or is grossly erroneous that, if allowed to stand, it would result in gross miscarriage of justice, is open to correction because it is not treated as a finding according to law. In that event, the High Court in exercise of its revisional jurisdiction under the above Rent Control Acts shall be entitled to set aside the impugned order as being not legal or proper. The High Court is entitled to satisfy itself the correctness or legality or propriety of any decision or order impugned before it as indicated above. However, to satisfy itself to the regularity, correctness, legality or propriety of the impugned decision or the order, the High Court shall not exercise its power as an appellate power to re-appreciate or re-assess the evidence for coming to a different finding on facts. Revisional power is not and cannot be equated with the power of reconsideration of all questions of fact as a court of first appeal. Where the High Court is required to be satisfied that the decision is according to law, it may examine whether the order impugned before it suffers from procedural illegality or irregularity.
We, thus, approve the view of this Court in Rukmini as noted by us. The decision of this Court in Ram Dass2must be read as explained above. The reference is answered accordingly.
Prior to April 1, 2014, surrender value of Keyman Insurance Policy on its assignment was to be taxed on maturity
August 29, 2014[2014] 48 taxmann.com 21 (Delhi - Trib.)
IT: Prior to 1-4-2014, out of total proceeds received by assessee on maturity of policy, a sum equivalent to surrender value of Keyman insurance policy at time of assignment by company in favour of assessee is taxabReassessment could be made beyond four years on basis of bogus transactions unearthed during survey: HC
August 29, 2014[2014] 48 taxmann.com 20 (Bombay)
IT : Where subsequent to completion of assessment, Assessing Officer received information from a survey that assessee had entered into bogus purchase transactions, he was justified in initiating reassessment proceedings on basis of those bogus invoices issued by supplier even after expiry of four years from end of relevant assessment year
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