JUDGMENT
1. This application under Section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”, has been filed by the petitioner, Messrs Nisar Brothers, Amer Road, Jaipur (hereinafter referred to as “the assessee”). During the course of arguments, learned counsel for the assessee pressed the following four questions :
” 1. Whether, on the facts and in the circumstances of the case, there was any material on record to sustain the finding of the Tribunal that the proviso to Section 145(1) of the Income-tax Act is applicable in the case of the assessee.
2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in making the addition of Rs. 30,000 in trading account and also sustaining the addition of Rs. 7,202 on account of the alleged sale and a further addition of Rs. 1,296 as profit thereon.
3. Whether, on the facts and in the circumstances of the case, there was any material on record to disbelieve the sworn statement of Abdul Wahab and to hold that the alleged approval memo issued to Abdul Wahab constitutes the suppressed sales and whether the Tribunal was justified in upholding the addition of Rs. 7,202 the value and further in the approval memo sum of Rs. 1,296 as assessed profit thereon.
4. Whether, on the facts and circumstances of the case, the assessee has not discharged the burden of proving that the goods contained in the approval sale memo to Abdul Wahab did not belong to the assessee and no sale had been finalised and the Tribunal was justified in up holding the addition of Rs. 7,202 the amount in the approval memo and Rs. 1,296 the assessed profit thereon.”
2. So far as the first question is concerned, the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, in its order dated January 10, 1984, held that the issue whether tal in sapphire or ruby had any value or not had come up before the Tribunal in a number of cases. The Tribunal held that tal had value and, therefore, the same should have been reflected either in the sales or in closing stock. The Tribunal was thus of the opinion that the value of the tal in the two account books of the assessee had not been shown either as sales or in the closing stock. On that account, the Tribunal found that the assessee had suppressed the profits on account of the value of the tal in the account books and in view of the above defects, the proviso to Section 145(1) was applicable.
3. Mr. Goyal, appearing on behalf of the assessee, contended that there was no necessity for showing the account of tal in the account books. It is submitted that in the account books it was clearly shown that the blue sapphire rough cut imports were issued for ghat. It is submitted that during the process of manufacturing rough cut imports into ghat, there was wastage which has been clearly accounted for in the account books of the assessee. It has thus been submitted that there was no question of any tal being shown in the process of rough cut sapphire when converted into ghat.
4. We see no force in this contention. Even if for argument’s sake, it may be assumed that there was no existence or formation of any tal during the process of manufacturing of rough sapphire into ghat, it was the duty of the assessee to maintain an account of tal also in the account books. Learned counsel for the assessee tried to explain that tal comes into existence when big pieces of rough sapphire are broken into small pieces for preparing ghat and such small pieces which, according to him, may be called as tal go as wastage and there was no necessity to mention such tal in the account books. We are not satisfied by the explanation given by learned counsel for the assessee. The Tribunal had clearly given a finding that even tal has a value and there is nothing wrong in the order of Tribunal in taking the view that such tal should have been explained in the account books either as sales or as closing stock. The burden lies on the assessee to clearly account for the entire rough material received by him and kept in the stock from the first stage to the last stage of manufacture of ghat or any other piece of jewellery. It cannot be said that it is a case where the Tribunal did not accept the account books to be correct on the basis of no material. The Tribunal had arrived at a finding that the proviso to Section 145 of the Act was applicable because the value of the tal had not been shown in the account books submitted by the assessee. This is a question of fact and no question of law arises in such finding arrived at by the Tribunal. Mr. Surolia, learned counsel for the Revenue, has cited CIT v. Garia Industries Pvt. Ltd. [1983] 140 ITR 636 (Cal) and CIT v. Builders Union [1978] 111 ITR 309 (Orissa), in support of the above contention.
5. So far as the other three questions are concerned, they form almost one question and are related to annexure G, a document found in the premises of the assessee in the name of one Abdul Wahab. The contention of learned counsel for the assessee in this regard is that from the sworn statement of Abdul Wahab, it was clearly proved that the assessee had no connection with the articles mentioned in annexure G.
6. The question whether to believe the statement of Afadul Wahab or not is purely a question of fact and if the Tribunal did not believe such evidence and held that the assessee had not discharged the burden of proving that the goods contained in annexure G did not belong to the assessee, that finding is purely a question of fact.
7. In view of these circumstances, no question of law arises out of the order of the Tribunal so as to give any direction for stating the case or referring any question of law for the opinion of this court. In the result, this application is dismissed with no order as to costs.