JUDGMENT
1. The appellant claims itself to be acting as commission agent of hides and skins for the assessment year 1984-85. The Income-tax Officer treated the appellant as a trader and not a commission agent. In appeal, the matter was remanded by the Commissioner of Income-tax (Appeals) with certain directions. On remand the Income-tax Officer, asked the appellant to establish that it was acting as a commission agent and not as a trader. The appellant supplied the list of parties for whom it had acted as a commission agent. Summons under Section 131 of the Income-tax Act, hereafter referred to as "the Act", was issued. Five persons appeared and the remaining five for reasons best known did not appear. On the basis of the statement recorded in respect of the persons who had appeared before the Income-tax Officer had accepted the plea of the appellant acting as commission agent in respect of these persons, whereas in respect of the remaining five persons who did not appear the Income-tax Officer treated the transactions as having been done in the capacity of a trader. The addition regarding investment and profit was made to the declared income. In appeal, however, the Commissioner of Income-tax (Appeals) has set aside the order by holding as follows :
"The appeal relates to a fairly old year, for which reasons the scope for enquiry has been reduced, now. In my opinion, it was rather arbitrary to treat the appellant as a dealer in respect of outside U. P. parties who did not appear before the Assessing Officer while accepting him as an 'arhatiya' in respect of those who appeared before the Assessing Officer. The Assessing Officer did not get any enquiry done from the said 'arhat market'. Therefore, in my opinion, it is no longer desirable to stretch this dispute. Accordingly, the Assessing Officer is directed to accept the appellant as an 'arhatiya' for this year and also to accept the profit from commission shown by him."
2. The Commissioner of Income-tax (Appeals) treated the appellant as a commission agent. The Revenue feeling aggrieved preferred an appeal before the Tribunal. The Tribunal, by the impugned order has allowed the appeal filed by the Revenue and has held that the assessee had failed to bring out any evidence that the transactions in question were not done by it, but the transactions were conducted on commission basis and, therefore, the Commissioner of Income-tax (Appeals) was not justified to observe that the appellant should be treated as conducting all the transactions on commission basis without any material brought on record by the appellant.
3. We have heard Shri Shakeel Ahmad, learned counsel for the appellant and Shri A.N. Mahajan, learned standing counsel for the Revenue.
4. Learned counsel for the appellant submitted that the appellant was acting only as a commission agent and it has given the name and addresses of the parties with whom it had transactions and if for any reason some of them had not appeared before the Assessing Officer in response to the summons issued under Section 131 of the Act, an adverse inference should not have been drawn. He further submitted that the appellant had received the payment by bank drafts and had only charged its commission and, therefore, the findings recorded by the authorities that it is a trader is perverse and based on no material on record. On a perusal of the order passed by the Assessing Officer on remand, we find that a categorical finding has been recorded by the assessing authority that the assessee also could not produce evidence regarding payments which he has claimed to have received through drafts from the parties. This finding could not be controverted by any material on record. In this view of the matter, we are of the considered opinion that the Income-tax Officer was perfectly justified in drawing an adverse inference against the appellant and holding that it acted as a trader in respect of the transactions which have not been proved by it in the capacity of a commission agent. The findings recorded by the authorities are based on appreciation of evidence and material on record and do not suffer from any infirmity.
5. The appeal does not raise any question of law and is dismissed in limine.