IMPORTANT POINT
Substantial question of law – what constitutes.

JUDGMENT

D.K. Jain, J. —

1. Challenge in these two appeals, by special leave, is to the orders dated 21st December, 2001 and 19th February, 2002 whereby the High Court of Delhi dismissed : (i) the appeal filed by the appellant herein under Section 260-A of the Income Tax Act, 1961 (for short “the Act”) in I.T.A. No.202 of 2001, holding that the order of the Income Tax Appellate Tribunal, New Delhi (for short “the Tribunal”) did not give rise to any substantial question of law; and (ii) the review petition preferred by the appellant against order dated 21st December, 2001, holding that the petition was not maintainable.

2. Shorn of unnecessary details, the facts material for adjudication of the present appeals may be stated. These are :

The appellant (hereinafter referred to as “the assessee”) was a partner in a firm, named and styled as M/s Des Raj Tilak Raj, having its business at Delhi, with a branch at Calcutta. The said partnership firm was dissolved w.e.f. 1st April 1982. As per the dissolution deed, the assessee took over the business of the Calcutta branch of the erstwhile firm. Thereafter, from 21st October, 1982, the assessee started a proprietary concern by the name of M/s Des Raj Vijay Kumar.

3. On 27th May, 1983, a search took place at the assessee’s premises during which certain incriminating documents were recovered and seized. During the course of assessment proceedings for the assessment year 1983-1984, for which the previous year ended on 31st March 1983, the assessing officer examined the seized record. One of the registers so examined, revealed cash receipts of ‘3,49,991/- in the name of 15 persons, most of which were purportedly received during the period of April, 1982 to October, 1982. When the assessing officer sought an explanation from the assessee with regard to the said cash credits in the register, the assessee merely stated that the cash receipts were in the nature of realisations from the past debtors of the erstwhile firm. In order to appreciate the said stand, the assessing officer called for the account books of the Calcutta branch of the erstwhile firm for the relevant period, but the assessee failed to produce them. The assessing officer also examined the assessee’s brother, a partner in the erstwhile firm, who also stated that the account books were not available.

4. Having noted that the outstanding realisations of the Calcutta branch in the preceding years varied from ‘25,000/- to ‘30,000/-, the assessing officer held that the assessee’s submission that cash receipts of ‘3,49,991/- related to earlier years was untenable. Therefore, vide order dated 20th February, 1986, the assessing officer added a sum of ‘3,49,991/- as assessee’s income under the head “unexplained cash receipts.”

5. Aggrieved, the assessee appealed to the Commissioner of Income Tax, (Appeals)-XV, New Delhi, who vide his order dated 6th December 1989, dismissed the same and confirmed the addition made by the assessing officer.

6. Being still aggrieved, the assessee carried the matter in appeal before the Tribunal. Vide order dated 27th September, 1994, the Tribunal, while partly allowing the appeal, remitted the matter back to the assessing officer for de-novo adjudication. The Tribunal observed that:

“We find that some of the entries pertained to the period when the erstwhile firm was in existence whereas the assessee did not conduct business at Calcutta in a proprietary capacity but was only a partner in the erstwhile firm. The A.O. himself observed in the assessment order that the cash receipts are from April 1982 to October, 1982 i.e. prior to the start of the assessee’s proprietary business in the name of M/s Desraj Vijay Kumar. As against this, we find that some of the entries are dated prior to April, 1982 when the erstwhile firm was in existence. Then again, it is not known as to what happened to the income between the period 1.4.1982 to October, 1982 as the erstwhile firm is supposed to have been dissolved w.e.f 1.