Full Judgment Text
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PETITIONER:
SIR SHADI LAL SUGAR AND GENERAL MILLSLTD. & ANR.
Vs.
RESPONDENT:
COMMISSIONER OF INCOME TAX, DELHI.
DATE OF JUDGMENT31/07/1987
BENCH:
MUKHARJI, SABYASACHI (J)
BENCH:
MUKHARJI, SABYASACHI (J)
OZA, G.L. (J)
CITATION:
1987 AIR 2008 1987 SCR (3) 692
1987 SCC (4) 722 JT 1987 (3) 189
1987 SCALE (2)153
ACT:
Income Tax Act, 1961: ss. 256, 271 & 274/Income Tax Act,
1922: s. 66--Income-tax Reference--Finding of fact by Tribu-
nal--When could be transformed into question of law and
interfered with.
HEADNOTE:
The assessee company, which derived its income from the
manufacture and sale of sugar and confectionery, was as-
sessed for the years 1958-59 by the Income Tax Officer under
the Income Tax Act, 1922 by making additions of Rs.48,500
for cane cost, Rs.67,500 for shortage in cane, and Rs.21,700
for salary of outstation staff. The assessee did not chal-
lenge the said assessment order. Later in the year 1963 the
Income Tax Officer issued notice under s. 274 read with s.
271 of the Income Tax Act, 1961 in respect of the assessment
year 1958-59 for imposing penalty. Before the Inspecting
Assistant Commissioner the assessee admitted that these
amounts, which were not included in the return by the compa-
ny, represented income. On finding that there was deliberate
understatement of income he imposed a penalty of Rs.70,000.
On appeal the Tribunal held that the mere fact that the
amounts were agreed to be taken into account by the assessee
did not ipsofacto indicate any criminality in its action to
conceal any portion of the income, and that the assessee
could very well have argued against the additions of the two
sums, namely, Rs.67,500 and Rs.21,700. As regards the sum of
Rs.48,500 it found that the assessee had agreed to similar
addition in the earlier years and so the penalty was war-
ranted in similar amount for this year and taking into
consideration that the sum involved was Rs.48,500, it con-
sidered that a smaller penalty of Rs.5,000 was imposable.
The High Court took the view that the onus of proving
concealment was on the Revenue because proceedings for
penalty were penal in character, and held that so far as the
sum of Rs.48,500 was concerned it was not proved that there
was any deliberate concealment, that the Tribunal had not
set aside the finding of the Assistant Inspecting Com-
693
missioner that the assessee surrendered the amount of
Rs.67,500 when it was faced with facts which clearly estab-
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lished concealment, that the assessee in fact had surren-
dered the amount only after the Income Tax Officer had
conclusive evidence in his possession that the amount repre-
sented its income, that acceptance by the assessee was
material to give proper weight to judge the criminality of
the action which in its opinion was not given, and that the
Tribunal omitted to take into account the fact that the
assessee had admitted that the amount of Rs.21,700 repre-
sented its income.
In the appeal by special leave on the question as to how
far the High Court in a reference could interfere with a
finding of fact and transform the same into a question of
law on the ground that there has been non-consideration of
all relevant facts.
Allowing the appeal,
HELD: 1.1 In an income tax reference a finding on a
question of pure fact could be reviewed by the High Court
only on the ground that there was no evidence to support it
or that it was perverse. If the High Court found that there
was no such evidence, those circumstances would give rise to
question of law and could be agitated in a reference.
[700G-701A, 702H-703A]
1.2 When a conclusion has been reached on an apprecia-
tion of a number of facts established by the evidence,
whether that is sound or not must be determined not by
considering the weight to be attached to each single fact in
isolation, but by assessing the cumulative effect of all the
facts in their setting as a whole. Where an ultimate finding
on an issue is an inference to be drawn from the facts
found, on the application of any principles of law, there
would be a mixed question of law and fact, and the inference
from the facts found in such a case would be a question of
law. But where the final determination of the issue equally
with the finding or ascertainment of the basic facts did not
involve the application of any principle of law, an infer-
ence from the facts could not be regarded as one of law. The
proposition that an inference from. facts is one of law is,
therefore, correct in its application to mixed questions of
law and fact, but not to pure questions of fact. In the case
of pure questions of fact an inference from the facts is as
much a question of fact as the evidence of the facts.
[701A-D]
In the instant case, it is not said that the Tribunal
had acted on material which was irrelevant to the enquiry or
considered material
694
which was partly relevant and partly irrelevant or based its
decision partly on conjectures, surmises and suspicions. It
took into account all the relevant facts in a proper light
in rendering a finding of fact. Therefore, no question of
law arises. [703BC, 701DE]
Sree Meenakshi Mills Limited v. Commissioner of Income-
tax, Madras, 31 I.T.R. 28; Omar Salay Mohamed Sait v. Com-
missioner of Income-tax, Madras, 37 I.T.R. 151; Udhavdas
Kewalram v. Commissioner of Income-tax Bombay City 1, 66
I.T.R. 462 and Remeshwar Prasad Bagla v. Commissioner of
Income-tax, U.P., 87 I.T.R. 421, referred to.
2.1 The High Court was wrong in saying that proper
weight had not been given to all the evidence and admissions
made by the assessee. The Tribunal had taken into considera-
tion the fact that the assessee had admitted the additions
as its income when faced with non-disclosure in assessment
proceedings. The time when the assessee admitted the addi-
tions was also considered. But to admit that there has been
excess claim or disallowance is not the same thing as delib-
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erate concealment or furnishing inaccurate particulars.
There may he hundred and one reasons for such admissions,
i.e., when the assessee realises the true position it does
not dispute certain disallowances but that does not absolve
the Revenue to prove the mens rea of quasi criminal offence.
[703BC, 702AB, 701A, 702BC]
2.2 It is for the Income-tax authority to prove that a
particular receipt is taxable. If however, the receipt is
accepted and certain amount is accepted as taxable, it could
be added. But in the instant case, it was not accepted by
the assessee that it had deliberately furnished inaccurate
particulars or concealed any income. [702EF]
3. The High Court observed that the time of admission
was not noted by the Tribunal and this fact had not been
properly appreciated by the Tribunal. That is not correct.
The Tribunal had made additions during the assessment pro-
ceedings. In any event that would be appreciation of evi-
dence in a certain way, unless in such misappreciation which
amounted to non-appreciation no question of law would arise.
Nonappreciation may give rise to the question of law but not
mere misappreciation even if there he any from certain
angle. Change of perspective in viewing a thing does not
transform a question of fact into a question of law. [703CD]
The High Court in preferring one view to another view of
factual
695
appreciation in the instant case, has therefore, trans-
gressed the limits of its. jurisdiction under the Income-Tax
Reference in answering the question of law. [703F]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1660 (NT)
of 1974.
From the Judgment and Order dated 23.12.1971 of the
Allahabad High Court in Income-tax Reference No. 53 of 1968.
H.K. Puri for the Appellants.
Miss A. Subhashini and H.B. Rao for the Respondent.
The Judgment of the Court was delivered by
SABYASACHI MUKHARJI, J. This appeal by special leave is
from the judgment and order of the Allahabad High Court
dated 23rd December, 1971 in the Income Tax Reference. The
assessee is a limited company under the Indian Companies Act
and derived its income from the manufacture and sale of
sugar and confectionery. The assessment for the assessment
year 1958-59 was completed under the Indian Income Tax Act,
1922. The Income Tax Officer in the said assessment, inter
alia made the following additions besides others in respect
of the following items:
(i) For cane cost Rs.48,500/-
(ii) For shortage in cane Rs.67,500/-
(iii) For salary of outstation staff Rs.21,700/-
The assessee did not challenge the said assessment order
passed by the Income Tax Officer in so far as the additions
of the above amounts in appeal or otherwise. It was the case
of the assessee that it did not appeal because it wanted to
keep good relations with the revenue although, according to
the assessee, the above additions made by the Income Tax
Officer were totally unjustified and illegal.
On 14th March, 1963 the Income Tax Officer issued notice
under section 274 read with section 271 of the Income Tax
Act, 1961 (hereinafter called ’the Act’) in respect of the
assessment year 1958-59 for imposing penalty.
The assessee company demurred. After considering the reply
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the
696
Inspecting Assistant Commissioner on 1st October, 1964
imposed a penalty of Rs.70,000 under section 274 read with
section 271 of the Act holding inter alia that there was
concealment of income to the tune of Rs.1,37,700 and the
maximum penalty of Rs.1,06,317 was imposable in law but a
sum of Rs.70,000 was imposed as penalty considering the
facts and circumstances of the case.
The assessee preferred an appeal against the said order.
The Tribunal after considering the entire matter, reduced
the penalty to Rs.5,000. The Tribunal referred the three
following questions, two at the instance of the assessee and
one at the instance of the revenue, to the High Court for
determination:
"1. Whether, on the-facts and in the circum-
stances of the case, the Tribunal was correct
in holding that the provisions of section 271
of the Income Tax.Act, 1961 are applicable to
the present case;
2.’Whether, there is any material to warrant
the finding that the assessee company had
concealed the particulars of its income or
deliberately furnished inaccurate particulars
thereof within the meaning of section 271(2)
of the Income Tax Act, 1961; and
3. Whether, on the facts and in the circum-
stances of the case, the Tribunal is correct
in reducing the penalty under section
271(1)(c) from Rs.70,000 to Rs.5,000?"
The High Court was of the opinion that the
third question did not clearly bring out the
matter in dispute between the parties and as
such it was reframed as follows:
"Whether, on the facts and in the circum-
stances, the finding of the Tribunal that the
assessee had not concealed income to the
extent of Rs.67,500 and Rs.21,700 within the
meaning of section 271(1)(c) of the Indian
Income Tax Act, 1961, is correct in law?"
The High Court noted that the Income Tax Officer had
made certain additions and disallowed certain expenses and
of the various amounts disallowed only three amounts were
required to be considered by the High Court namely; (i)
inflation in price of sugar-cane of an amount of Rs.48,500,
(ii) excess shortage claimed for cane
697
Rs.67,500 and (iii) salary of out-station staff of loading
contractors of Rs.21,700. So far as the first question is
concerned the High Court held in favour of revenue and
answered the question in the negative. The answer to this
question is no longer in dispute here. So far as the second
question is concerned the High Court answered the question
in the nagative and in favour of the assessee. There is no
dispute about that question too, in so far as there is no
appeal by the revenue. As regards the third question re-
framed as mentioned hereinbefore, it was answered by the
High Court in the affirmative and in favour of the revenue.
The assessee has come up in appeal to this Court challenging
the correctness of that answer. In this appeal we are con-
cerned with the correctness or otherwise of the answer given
to this question and the appeal must be confined to the
correctness of the answer given to the third question as
reframed.
The Income Tax Officer in his assessment order out of
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which this penalty proceedings arose noted that there were
several disallowances in various accounts and he mentioned
altogether 19 items totalling Rs.3,01,787. All these were on
account of disallowances. Main item was shortage in cane and
the amount was Rs.67,500. Another items was salary of out-
station staff and the amount was Rs.21,700. There was also
addition of Rs.48,500 on account of inflation in the price
of sugar cane. The Inspecting Assistant Commissioner in his
order noted, inter alia three items, namely, (i) inflation
in price of sugar cane Rs.48.500 (ii) excess shortage
claimed for cane Rs.67,500 and (iii) salary of outstation
staff of loading contractors Rs.21,700. It was found so far
as the last item was concerned that the amount was disal-
lowed being a false debit. It was found that the assessee
attempted to understate the income by debiting a false
expenditure of Rs.48,500. The Inspecting Assistant Commis-
sioner noted that actual shortage was 21,143 Mds. valuing
Rs.26,429 while the assessee had claimed Rs.1,34,661 for
shortage at 2%. The excess claim was also indicative of the
real position that the shortage was fictitiously claimed at
a high figure. Faced with these facts the assessee eventual-
ly surrendered Rs.67,500. Therefore, the Inspecting Assist-
ant Commisioner held that the assessee was certainly reduc-
ing the income by debiting false claims for excess shortage
and the action amounted to intentional concealment. Salary
amounting to Rs.21,700 paid by the contractors to their
staff working at out-centres was debited in the books and
while it was claimed that the staff working at these centres
were actually employed by the company, on investigation the
claim was found to be false. In this connec-
698
tion a reference was made to the statement of one Shri Kedar
Nath Kanodia. He had stated that he had employed five per-
sons at the out-centres and there was no employee of the
mill working at the centres. The mill had kept there neither
any clerk not any chowkidar. He confirmed that he had paid
the employees out of his own funds and had categorically
denied that they were the employees of the mill or that they
were paid by it. In his statement he further stated that
although the staff was actually paid by him yet the compa-
ny’s accountant had obtained their signatures on salary
sheets and thus inflated the expenses by raising false debit
in the salary account. This procedure was followed in re-
spect of other contractors also. The salary bill was thereby
inflated by Rs.21,700. The Inspecting Assistant Commissioner
therefore, held that the assessee had concealed income to
the extent of Rs.21,700. He had also come to the conclusion
that the cane purchases noted against these last entries
were false and fictitious and the quantity covered by these
entries was 31, 561 Mds. valuing at Rs.48,500. This was a
false debit. The assessee debited the three items of
Rs.48,500, Rs.67,500 and Rs.21.700. The assessee admitted
that these items represented income. It was also borne out
by records that the amounts were not included in the return
by the company. The offence of deliberate under-statement of
income was, thus clearly established according to the In-
specting Assistant Commissioner. He, therefore, found that
the tax sought to be evaded came to Rs.70,914 and the maxi-
mum penalty worked out to Rs. 1,06,37 1. Having regard to
the facts and circumstances of the case, he imposed a penal-
ty of Rs.70,000.
In appeal the Income Tax Tribunal was of the view that
not much turned upon the fact that the assessee agreed to
the additions of the amounts in the assessment. So far as
the reliance placed upon Kanodia’s statement by the Inspect-
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ing Assistant Commissioner was concerned, it had no rele-
vance or bearing to the facts of the assessment year in
question. He was not the contractor employed by the assessee
in the year of account. He came in only for a later year.
One Avinash Chand was the contractor in the year in ques-
tion. He had specifically stated that he was responsible for
shortages. He had also admitted that there was staff main-
tained by the mill at the centre at which he was the loading
contractor. In fact he had gone to the extent of and stated
as to what staff was maintained in that centre; there was a
man in charge of the centre, a weighment clerk, a cane clerk
and three to four chowkidars. He had also stated that they
were not his employees. According to the Tribunal in these
circumstances the assessee could very well have argued
against the addition of the two sums,
699
namely, Rs.67,500 and Rs.21,700. But the assessee as we have
noted had agreed to the amounts being included. The Tribunal
was of the view that the mere fact that the amounts were
agreed to be taken into account by the assessee did not ipso
facto indicate any criminality in its action to conceal any
portion of the income. The Tribunal found that so far as
Rs.48,500 was concerned in the inflation in the price of
sugar-cane, the previous history was against the assessee.
It had agreed to the similar additions in the earlier years
1955-56 and 1956-57 the Tribunal noted. From the above
facts, it was seen that the penalty was warranted in similar
amount for this year also, the Tribunal noted. Taking into
consideration that the sum involved against this year was
Rs.48,500 the tribunal considered that a smaller penalty was
imposable. The Tribunal accordingly imposed a total penalty
of Rs. 5,000.
The High Court reiterated that the onus of proving
concealment was on the revenue because the proceedings for
penalty were penal in character. In that view of the matter
the High Court was of the opinion that so far as Rs.48,500
was concerned it was not proved that there was any deliber-
ate concealment. So far as the other two amounts of
Rs.67,500 and Rs.21,700 were concerned, it was contended
that the High Court noted the history of the order of the
Inspecting Assistant Commissioner and the circumstances of
the case and the High Court was of the view that the Tribu-
nal had not at all considered the fact that the value of the
shortage was only Rs.26,429. According to the High Court,
the Tribunal had brushed aside the fact that the assessee
had agreed to the addition of this amount. According to the
High Court, the Tribunal had not set aside the finding of
the Inspecting Assistant Commissioner that the assessee
surrendered the amount of Rs.67,500 when it was faced with
facts which clearly established concealment. The assessee
according to the Inspecting Assistant Commissioner had
surrendered the amount only after the Income Tax Officer had
conclusive evidence in his possession that the amount repre-
sented its income. In other words, what the High Court
sought to state was that acceptance by the assessee was
material to give proper weight to judge the criminality of
the action which according to the High Court was not given.
The High Court highlighted that so far as Rs.67,500 was
concerned only on being faced with facts from which there
could possibly be no escape from the inference that the
amount represented his income, that the assessee agreed to
its inclusion. The High Court was of the view that the
Tribunal was in error in brushing aside consideration of
these aspects while considering the question of concealment.
In respect of the addition of Rs.21,700 the Inspecting
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Assistant
700
Commissioner had relied upon the statement of Kedar Nath
Kanodia as also the fact that the assessee admitted that
this item represented its income. The Tribunal did not place
reliance upon the statement of Kedar Nath Kanodia. It,
however, omitted to take into account the fact that the
assessee had admitted that these items represented its
income. The High Court was of the view that such admissions
were made by the assessee but the Tribunal had not properly
appreciated that aspect. Therefore in respect of these two
items the High Court was of the view that the Tribunal was
not right in holding that the assessee was not guilty of any
concealment. So far as question No. 2 was concerned which
dealt with Rs.48,500 the High Court confined itself to the
disallowance in respect of purchase of cane. So far as this
question was answered in favour of the assessee and there is
no challenge by the revenue, it is not material any more.
The High Court came to the conclusion that the finding of
the Tribunal in respect of the concealment of Rs.48,500 was
not justified in law. It was urged before us that as the
second question which was in general form has been answered
in favour of the assessee, the third question as reframed
could not have been answered otherwise. We are unable to
accept this contention. As evident from the discussion by
the High Court, the High Court confined to second question
with regard to disallowance in respect of purchase of cane
that amounted to Rs.48,500. So, therefore it cannot be said
that in view of the answer given to the second question, the
third question was no longer open. The second question was
confined to only Rs.48,500.
So far as whether there was justification for the answer
given to the reframed third question or was proper or not
has to be judged on the basis as to how far the High Court
in a reference could interfere with a finding of fact and
transform the same into a question of law on the ground that
there has been non-consideration of all relevant facts. The
law on this point is quite settled.
The question was considered by this Court exhaustively
in Sree Meenakshi Mills Limited v. Commissioner of Income-
tax, Madras, 31 I.T.R. 28 where this Court reiterated that
findings on questions of pure fact arrived at by the Tribu-
nal were not to be disturbed by the High Court on a refer-
ence unless it appeared that there was no evidence before
the Tribunal upon which they, as reasonable men, could come
to the conclusion to which they have come; and this was so,
even though the High Court would on the evidence have come
to a conclusion entirely different from that of the Tribu-
nal. In other words, such a finding could be reviewed only
on the ground that there was no evi-
701
dence to support it or that it was perverse.
When a conclusion had been reached on an appreciation of
a number of facts established by the evidence, whether that
was sound or not must be determined, not by considering the
weight to be attached to each single fact in isolation, but
by assessing the cumulative effect of all the facts in their
setting as a whole. Where an ultimate finding on an issue
was an inference to be drawn from the facts found, on the
application of any principles of law, there would be a mixed
question of law and fact, and the inference from the facts
found was in such a case, a question of law. But where the
final determination of the issue equally with the finding or
ascertainment of the basic facts did not involve the appli-
cation of any principle of law, an inference from the facts
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could not be regarded as one of law. The proposition that an
inference from facts was one of law was, therefore, correct
in its application to mixed questions of law and fact, but
not to pure questions of fact. In the case of pure questions
of fact an inference from the facts was as much a question
of fact as the evidence of the facts. In the instant case
there is a finding of fact and unless it could be said that
all the relevant facts had not been considered in a proper
light, no question of law arises. In our opinion, the Tribu-
nal took into account all the relevant facts. The Tribunal
had been accused by the High Court of not taking into con-
sideration the fact that the assessee had admitted these
amounts in the assessment. To admit that there has been
excess claim or disallowance is not the same thing as delib-
erate concealment or furnishing inaccurate particulars. At
least in the background of the law as it stood at the rele-
vant time that was the position. There have been some
changes subsequentiy which we have not noticed for the
present purpose.
In Omar Salay Mohamed Sait v. Commissioner of Income-
tax, Madras, 37 I.T.R. 15 1, this Court held that the In-
come-tax Appellate Tribunal was a fact finding tribunal and
if it arrived at its own conclusions of fact after due
consideration of the evidence before it the court could not
interfere. It was necessary, however, that every fact for
and against the assessee must have been considered with due
care and the Tribunal must have given its finding in a
manner which would clearly indicate what were the questions
which arose for determination, what was the evidence pro and
contra in regard to each one of them and what were the
findings reached on the evidence on record before it. The
conclusions reached by the Tribunal should not be coloured
by any irrelevant considerations or matters of prejudice and
if there were any circumstances which required to be ex-
plained by the assessee, the
702
assessee should be given an opportunity of doing so. In this
case, the Tribunal had taken into consideration the fact
that the assessee had admitted the additions as its income
when faced with non-disclosure in assessment proceedings.
The High Court accused the Tribunal of not considering the
time when the assessee admitted the additions. We find that
it was duly considered by the Tribunal. We find that the
assessee admitted that these were the income of the assessee
but that was not an admission that there was deliberate
concealment. From agreeing to additions it does not follow
that the amount agreed to be added was concealed. There may
be hundred and one reasons for such admissions, i.e., when
the assessee realises the true position it does not dispute
certain disallowances but that does not absolve the revenue
to prove the mens rea of quasi criminal offence. In Udhavdas
Kewalram v. Commissioner of Income-tax, Bombay City 1, 66
I.T.R. 462, the Court held that the Income-tax Appellate
Tribunal performed a judicial function under the Income-tax
Act and it was invested with authority to determine finally
all questions of fact. The Tribunal must, in deciding an
appeal, consider with due care all the material facts and
record its findings on all contentions raised by the asses-
see and the Commissioner in the light of the evidence and
the relevant law. The Tribunal was undoubtedly competent to
disagree with the view of the Appellate Assistant Commis-
sioner, but in proceeding to do so, it had to act judicially
i.e. to consider all the evidence in favour of and against
the assessee. An order recorded on a review of only a part
of the evidence and ignoring the remaining evidence could
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not be regarded as conclusively determinative of the ques-
tion of fact raised before the Tribunal. It is for the
Income-tax authority to prove that a particular receipt is
taxable. If, however, the receipt is accepted and certain
amount is accepted as taxable, it could be added but it was
not accepted by the assessee, however, that it hard deliber-
ately furnished inaccurate particulars or concealed any
income. In our opinion, the Tribunal has properly considered
all the evidence in the instant case. In Rameshwar Prasad
Bagla v. Commissioner of Income-tax, U.P., 87I I.T.R. 421,
this Court again reiterated that it was for the Tribunal to
decide questions of fact, and the High Court in a reference
under section 66 of the Act as at that time could not go
behind the Tribunal’s findings of fact. The High Court could
only lay down the law applicable to the facts found by the
Tribunal. The High Court in a reference under section 66 of
the Act, as at that time could, however, go into the ques-
tion as to whether the conclusion of the Tribunal on a
question of fact was based upon relevant evidence. If the
High Court found that there was no such evidence to support
the finding of fact of the Tribunal, those circumstances
would give rise to a question of law and
703
could be agitated in a reference. Here in the instant case
that is not the position. This Court again reiterated that
it was also well-established that when a Tribunal acted on
material which was irrelevant to the enquiry or considered
material which was partly relevant and partly irrelevant or
based on conjectures, surmises and suspicions and partly on
evidence, then in such a situation an issue of law arose and
the finding of the Tribunal could be interfered with. That
is not the position here. In the instant case, it is not
said that the Tribunal had acted on material which was
irrelevant to the enquiry or considered material which was
partly relevant and partly irrelevant or based its decision
partly on conjectures, surmises and suspicions. The High
Court was wrong in saying that proper weight had not been
given to all the evidence and admissions made by the asses-
see. The High Court further observed that the time of admis-
sion was not noted by the Tribunal and this fact had not
been properly appreciated by the Tribunal. That is also not
correct. The Tribunal had made additions during the assess-
ment proceedings. In any event that would be appreciation of
evidence in a certain way, unless in such misappreciation
which amounted to non-appreciation no question of law would
arise. Non-appreciation may give rise to the question of law
but not mere misappreciation even if there be any from
certain angle. Change of perspective in viewing a thing does
not transform a question of fact into a question of law.
In the instant case we are of the opinion that in pre-
ferring one view to another view of factual appreciation,
the High Court transgressed the limits of its jurisdiction
under the Income-tax reference in answering the question of
law.
In the premises, we are of the opinion that the High
Court was in error in so far as it held that the Tribunal
had acted incorrectly. We are further of the opinion that
the reframed question must be answered in the affirmative
and in favour of the assessee.
The appeal is allowed and the judgment and order of the
High Court in so far as answer to the question No. 3 is
concerned is set aside. The assessee is entitled to the
costs of this appeal.
P.S.S. Appeal al-
lowed.
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704