M.B. ABDULLA v. COMMISSIONER OF INCOME-TAX, KERALA

Citation: [1990] 2 S.C.R. 5

Court: Supreme Court of India

Bench: SABYASACHI MUKHERJI, M.M. PUNCHHI

Case summary

"Section 56(1) speaks of a question of law that arises out of the order of the Tribunal. The High Court vide its order dated 31st January, 1989 had dismissed the application for reference.

Judgment text

The Judgment of the Court was delivered by SABYASACHI MUKHAR. 11, CJ. This is a petition under artide 136 of the Constitution for leave to appeal against the orders of the tribunal and the High Court. The High Court vide its order dated 31st January, 1989 had dismissed the application for reference. There is . also an order of the tribunal refusing to make a reference under section 256(1) of the Income Tax Act, 1961 (hereinafter called 'the Act'). This petition also seeks leave to appeal directly from the said order of the tribunal. M. B. ABDULLA v. C. I. T. [MUKI! ARJI, CJ. ] 7 However, in order to appreciate the controversy in this case the facts reiterated by the High Cpurt of Kerala in its said judgment and order are important, it had observed as follows: "For the assessment year 1969-70 the petitioner· filed a return declaring a total income of Rs. 9,571.

In cbrnpleting the assessment the assessing authority proceeded on the basis that the assessee was the owner of the gold seized on 9. 11. 68 and confiscated by the Customs authorities worth I . Rs. 20 lakhs and accordingly the Income-tax Officer treated ·. ,. the sum of Rs. 20 lakhs as income from undisclosed source applying the provisions of Section 69-A of the Income-tax Act, 1961. On appeal, the Appellate Assistant Commissioner held that the assessee was not the owner of the contraband gold seized by the Central Excise Authority and therefore reduced the. assessee's total income by Rs. 20 lakhs. The Revenue filed a second appeal before the Appellate Tribunal, Cochin Bench. After going through the evidence the Tribunal came to the conclusion that the car belonged to the assessee and the special places of concealment had been provided by design in the car. Further the assessee himself was driving the car in which the gold was found.

The assessee also has not attributed the ownership to anybody else. The assesee also has not established that the gold was given to him by any third party. In view of all these, the addition of Rs. 20 lakhs made by the Incometax Officer but deleted by the Appellate Asst!. Commissioner was restored. The additional ground raised by the Revenue that the appeal is not maintainable before the Appellate Asstt. Commissioner was rejected. The assessee thereafter filc - Madras had confiscated the gold in question and found that the petitioner was in possession of the gold. The assessment of the petitioner for the year in question was originally completed at a total income of Rs. 1,571. Subsequent to the completion of the original assessment, the petitioner filed a return declaring a-total income of Rs. 9,571. The Income Tax Officer issued notice under section 148 of the Act. The Tribunal ultimately had accepted the revenue's contention, restored the addition of Rs.

20 lakhs made by the assessing authority, inter alia, holding that the onus was on the petitioner to prove that the gold was not owned by him which onus the petitioner had failed to discharge. The Tribunal had gone into and adjudicated the question substantially raised by the petitioner that the confiscated gold could not be treated as the income of the petitioner. The Tribunal rejected the application of the petitioner on the ground that the claim of loss on account of the confiscation of the gold was not the subject-matter of the appeal. The principles of law have been discussed by this Court in Scindia Steam Navigation Co. Ltd's case (supra}. In the facts and the circumstances of the case, the Tribunal and the High Courts have taken the view that whether certain sum of money can be treated as the income of an assessee and whether that sum of money could be deducted as loss are different question of law and not different aspects of the same question.

The Tribunal and the High Court have taken a particular view. They have borne in mind the correct principles that are applicable in the light of the law laid down by this Court in Scindia Steam Navigation's case (supra). In the background of the facts and the circumstances of the case, as mentioned hereinhefore, if the aforesaid view of the Tribunal and the High Courts is a possible view, we are not inclined to interfere with that view under Article 136 of the Constitution in the light of the facts and the circumstances of this case. We are not prepared to say that injustice has been done to the petitioner. The view taken by the Tribunal and the High Courts is a possible view. The Tribunal and the High Courts have borne in mind the principles of law laid down by this Court. In the aforesaid view of the matter; in the facts and the circumstances of the case, this application is rejected and aceordingly dismissed. R. N. J. Petition dismissed. •. •