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CASE NO.: Appeal (civil)  4262 of 2007

PETITIONER: Commissioner of Income Tax,Salem

RESPONDENT: P.V.Kalyanasundaram

DATE OF JUDGMENT: 14/09/2007

BENCH: S.B.SINHA & HARJIT SINGH BEDI

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO 4262 / 2007 (arising out of SLP) No. 16462/2006)

HARJIT SINGH BEDI,J.

1.              Leave granted.

2.              This appeal by way of special leave is directed  against the judgment of the Division Bench of the Madras High  Court dated 08th February 2006 whereby the appeal filed by  the Revenue under section 260 A of the Income-tax Act 1961  (hereinafter called the "Act") against the order of the Income- tax Tribunal allegedly raising questions of law has been  dismissed on the premise that no substantial question of law in  fact arose for consideration.  The facts leading to the appeal  are as under:- 3.      The respondent-assessee vide a registered sale deed dated  26.10.1998 purchased certain land at Brindavan Road,  Fairlands, Salem for a sum of Rs.4.10 lakhs.  During a search  of the office and residential premises of Polimer Net Work,  certain notes on loose sheets allegedly in the hands of the  respondent were found and seized by the department.  In his  statement recorded on 8.12.1998, the assessee submitted that  he could not remember as to why the notings had been made.  The statement was further confirmed by another statement on  11.12.1998.  The department also recorded the statement of the  vendor Rajarathinam on 8.12.1998 which too was confirmed  on 11.12.1998 in which he admitted that he had in fact received  a total consideration of Rs. 34.35 lakhs and that the sum of Rs.  4.10 lakhs reflected in the sale deed had been received by him  by way of a demand draft and the balance in cash.   Rajarathinam however retracted from his statement on  8.1.1999 and filed an affidavit deposing that the sale price was  Rs.4.10 lakhs only and that his statements earlier given to the  authorities were incorrect.  In a subsequent statement  recorded on 20.11.2000 Rajarathinam again reverted to his  earlier portion and deposed that the sale price was Rs.34.85  lakhs.  The Assessing Officer concluded that the sale  consideration was actually Rs. 34.85 lakhs and not Rs.4.10  lakhs as had been recited in the sale deed.  He accordingly  adopted the aforesaid enhanced figure for the purpose of  assessment and made an addition of Rs.3.75.005/- as  undisclosed income for the broken period 1.4.1998 to  8.12.1998.  The matter was thereafter taken to the  Commissioner of Income-tax (Appeals), who after examining

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the entire matter, observed that the statements given by  Rajarathinam could not be relied upon more particularly as  the floor price fixed by the authorities for such property was  much lower than the value which would result if the sale deed  had been registered at Rs.34.85 lakhs.  The Commissioner  accordingly deleted the addition made.  An appeal was  thereafter preferred by the Revenue against the order of the  Commissioner before the Income-tax Appellate Tribunal.  The  Tribunal in its order dated   6th July 2005 held that the notings  on the loose pieces of paper on the basis of which  the initial  suspicion  with regard to the under valuation had been raised   were vague and could not be relied upon  as it appeared that  the total area with respect to the sale deeds and that reflected   in the loose sheet was discrepant.  It was also observed that as  per the guidelines for registration the fair value for  registration on the relevant date was Rs.244/- to Rs.400/- per  s.ft. and the sale consideration for Rs.850/- per s.ft.  claimed by  the Revenue was unrealistic and ignored the ground situation.   It was further held that the tax of approximately Rs. 1.84,000/-  determined on the basis of the addition would not show that  the assessee had acquiesced in the addition made by the  department or that it was conclusive evidence  of the sale price  as the deposit had been made  in an obvious effort to save  himself from further harassment from the revenue and to  escape a much higher liability to the payment of tax on  undisclosed income should proceedings under section 158 BD  of the Act be initiated.  On these findings, the Tribunal  dismissed the appeal.  It is in these circumstances that an  appeal under section 260-A was filed in the High Court.   Before the High Court the following substantial questions of  law were raised:- (a)Whether or not when the Returns and the  Statements of the seller admit higher sale  consideration actually received, the revenue is  justified in fixing the sale consideration at the higher  amount than what has been declared? (b)When the assessee did not give any explanation to  the notings found and at the same time the revenue  is able to corroborate the same with the statement of  the seller for the purpose of determination of actual  sale value, would the lower authority be justified in  interfering with the same?         )When consistent sworn were taken into  consideration along with evidences found at the time  of search, would all be liable to be rejected on the  basis of one statement in between contradicting the  earlier ones which was also explained away as a  result of intimidation?

4.                      The High Court relying heavily on the order of the  Commissioner and the Tribunal held that no substantial  questions of law had been raised and accordingly dismissed  the appeal.  It is this situation that the present matter is here  before us.       5.                Mr. G.N. Vahanvati, the learned Solicitor General  has at the very outset raised serious objection to the order of  the High Court pointing out that Division Bench had merely  plagiarized substantial portions from the order of the  Commissioner and Tribunal in arriving at its conclusion and  no independent assessment on the questions of law that arose  for consideration, had been made.  He also pointed out that  several questions of law pertaining to the implications of the  statements and the counter statements made by  Rajarathinam did arise in the case and the matter had not  been dealt with by the High Court in that perspective and it

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was therefore appropriate that the matter be remitted for  fresh decision.  The learned counsel representing the assessee  respondent has however pointed out that the Commissioner  of Income-tax in particular, had after a very elaborate  discussion of the matter, concluded on a finding of fact with  regard to the nature of the transaction and this view had been  accepted by the Tribunal as well.  He has accordingly  submitted that no substantial questions of law have been  raised in this matter and the issues raised were purely  questions of fact.                                                                       6.      We have heard the learned counsel for the parties and  have gone through the record.  It is true that the Division  Bench of the High Court has borrowed extensively from the  orders of the Tribunal and the Commissioner and passed  them off as if they were themselves the author’s.  We feel that  quoting from an order of some authority particularly a  specialized one cannot per-se be faulted as this procedure can  often help in making for brevity and precision, but we agree  with Mr. Vahanavati to the extent that any ’borrowed words’  used in a judgment must be acknowledged as such in any  appropriate manner as a courtesy to the true author(s).  Be  that as it may, we are of the opinion that the three questions  reproduced above can, in no way, be called substantial  questions of law.  The fact as to the actual sale price of the  property, the implication of the contradictory statements  made by Rajarathinam or whether reliance could be placed  on the loose sheets recovered in the course of the raid are all  questions of fact.   We therefore find no infirmity in the order  of the High Court.  Accordingly, we dismiss the appeal.