INDRAPRASTHA AGENCIES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE appeals under Section 260A of the Income -tax Act, 1961, relate to the assessment years 1994 -95, 1995 -96 and 1996 -97 under that Act. The appeals are by the assessee. The assessee filed returns and it was assessed. Subsequently, notices under Section 148 of the Income -tax Act, 1961, were issued on the basis that the income had escaped assessment within the meaning of Section 147 of the Act. A notice was also served on the assessee under Section 142(1) of the Act. The annexure to that notice informed the assessee that information had been received that the assessee had received payment of different sums relating to different years from the Animal Husbandry Department of the Government of Bihar during the relevant accounting years and calling upon the assessee to furnish the relevant information based on the queries made in that communication. Essentially, the assessee admitted that it had received those amounts from the Animal Husbandry Department, but raised a contention that 80 to 90 per cent. of the amounts thus received had to be paid by way of bribe to the officials of the Animal Husbandry Department, Ministers and others and hence that part of the amount received by the assessee was not liable to be taxed as income at the hands of the assessee. But the assessee did not furnish the information sought for and ultimately admitted that the amounts had been received from the Animal Husbandry Department during the respective years and also admitted that pursuant to the receipt of those amounts, no supplies had been made by the assessee to the Animal Husbandry Department. The assessee took the stand that the entire amount received was not its income and the entire amount should not be assessed at the hands of the assessee. The assessee had paid back the amount to the persons concerned and had earned only 10 to 20 per cent. of the amount received from the Animal Husbandry Department. The assessing authority took the view that the assessee having admitted the receipt of the amount and having failed to prove the expenditure as claimed by it, the entire amount was liable to be assessed at the hands of the assessee. The appeal filed by the assessee was dismissed by the Commissioner of Income -tax (Appeals) by a common order relating to the three years. The appellate authority also agreed with the Assessing Officer that the assessee had failed to adduce any evidence in support of payment of 80 to 90 per cent. of the amount received by the assessee from the Animal Husbandry Department to any other person as bribe or otherwise. The Commissioner (Appeals) therefore affirmed the order of the Assessing Officer. The assessee appealed before the Income -tax Appellate Tribunal. The Tribunal noticed that even in the information furnished, the assessee had admitted that he had received the payment from the Animal Husbandry Department against bills which were apparently fake and without making any supply. It also noticed that the assessee had failed to substantiate its claim that it had paid amounts to the officers of the Animal Husbandry Department and others from out of the amounts admittedly received by the assessee. Thus, agreeing with the assessing authority and the Commissioner (Appeals) that in the circumstances, the entire amount was liable to be taxed at the hands of the assessee, the Tribunal affirmed the decision of the Commissioner (Appeals) and dismissed the appeals filed by the assessee. The Tribunal also noticed that the plea that bribe had been paid out of the amounts received by the assessee was a plea based on an illegal act and one against public policy and hence such a plea was also labile to be discarded. It is challenging this decision of the Tribunal that these appeals are filed by the assessee.

(2.) WHAT we find is that the assessee had admitted that the substantial amounts relating to the relevant accounting years had, in fact, been received by the assessee from the Animal Husbandry Department. The assessee is in business. Payments were received in the course of its business, against bills for supply of cattle -feed and other things to the Animal Husbandry Department. Therefore, there cannot be any doubt that this is the income of the assessee. The only plea of the assessee was that the entire amount could not be treated as its income since a substantial part of it, up to 80 to 90 per cent. had to be distributed among the officers of the Animal Husbandry Department and others by way of bribe or illegal gratification. The concurrent finding by both the authorities and the Tribunal is that the assessee had failed to prove this plea of the assessee. In fact, the assessee could not even disclose the recipients of those amounts or portions of those amounts. An attempt to show generally that there was a cattle -feed scam in the State of Bihar and investigations by the Central Bureau of Investigation (CBI) and that it indicated the modus operandi, are not sufficient to enable the assessee to claim that out of the income received by it, a substantial portion should be excluded on the basis that it is a business expenditure or that it had not actually come to the credit of the assessee. On these findings of fact by the authorities which was not attempted to be challenged before us with reference to any specific material, it is clear that no substantial question of law arises for decision in these appeals. The substantial question of law (A) sought to be raised in the memorandum of appeal clearly stands answered against the assessee on the findings of fact rendered by the authorities and by the Tribunal. Once that question is answered against the assessee, the other questions are not germane to the issue. The plea of the assessee that the assessee did not have adequate opportunity also clearly stands disproved by the facts and circumstances. Even when it got the opportunity, the assessee failed to disclose the persons to whom the amounts were allegedly paid or to substantiate the factum of payment out of the amounts it received. Mere production of a pass book showing some withdrawals by the assessee cannot be a substitute for evidence of payments to specified persons. If the assessee had disclosed the relevant details, then, it might have been a case for further investigation by the Department or for resorting to the power available under Section 131 of the Income -tax Act. On the failure of the assessee to furnish any material or lead any specific evidence in that regard, nothing turns on the alleged question of law sought to be raised regarding the absence of opportunity or on the so -called investigation report of the Central Bureau of Investigation regarding the scam. We thus find no reason to interfere. We dismiss the appeals. R.K. Merathia J.