COMMISSIONER OF INCOME-TAX Vs. SHANTI SWARUP

JUDGEMENT

(1.) The assessment year is 1980-81, The assessee filed the return of income of Rs. 11,245. It also claimed credits for an amount of Rs. 73,500. On an examination of the evidence adduced by the assessee, the Income-tax Officer, Faridabad, disallowed the credits and made an addition of Rs. 73,500 to the income returned by the assessee. The appeal filed by the assessee was dismissed by the appellate authority. The assessee approached the Tribunal. Vide its order dated February 11, 1997, the Tribunal found that on the basis of the evidence adduced by the assessee, the view taken by the assessing and the appellate authorities was "unwarranted". Consequently, the appeal was allowed. The Revenue approached the Tribunal with a petition under Section 256(1) of the Income-tax Act, 1961. It prayed that the following question be referred to the High Court for its opinion :

(2.) The Tribunal considered the matter and found that its decision "is based on appreciation of evidence and accordingly the same is within the realm of facts and as such no question of law much less referable question of law arises out of the Tribunal's order . . .". Hence, this petition under Section 256(2).

(3.) We have heard Mr. Sawhney, learned counsel for the petitioner. He contends that the burden of proving the capacity to advance loan was on the assessee and if the Tribunal reverses the decision of the assessing authority without meeting the reasons given by the authorities, its decision would raise a question of law. Learned counsel has also referred to certain decisions, viz., Hart Chand Virender Paul v. CIT [1983] 140 ITR 148 (P & H); CIT v. Sarvodaya Furnishers and Electricals Pvt. Ltd. [1994] 210 ITR 255 (All); CIT v. Smt. Usha Jain [1990] 182 ITR 437 (Delhi) and Mehta Parikh and Co. v. CIT [1956] 30 ITR 181 (SC). There is no quarrel with the proposition enunciated in these cases. However, so far as the present case is concerned, the assessee had initially produced the affidavits of four persons who had advanced loans but thereafter these persons had appeared before the authority. Their statements were recorded. They were duly questioned. It is only after perusing the evidence recorded by the appropriate authority that the Tribunal has taken the impugned view. The credits as claimed by the assessee were allowed. The decision of the Tribunal is based on a pure appreciation of evidence. We are satisfied that no question of law arises.