By TIOL News Service

NEW DELHI, AUG 16, 2018: THE ISSUE BEFORE THE HIGH COURT IS - Whether factual findings of the Tribunal become perverse merely because an alternative conclusion can be drawn. NO is the answer. Besides, the Bench also held that factual findings of the Tribunal could be interfered with only if they are blatantly unreasonable or based on conjectures & surmises.

Facts of the case

The assessee company filed returns for the relevant AY, declaring its income, which also included commission received in capacity of an agent for a foreign firm. The assessee had helped the foreign firm in obtaining purchase orders for transformers to be supplied to the Power Grid Corporation of India Ltd. The assessee also performed services of coordination & follow up for the foreign firm. On assessment, the AO doubted the genuineness of the expenditure and deemed such payment to be surreptitious & covert and which had not been paid for services rendered. While such findings were reversed by the CIT(A) based on documents submitted by the assessee, the Tribunal later held that the assessee failed to discharge onus or establish genuineness of the transaction.

On appeal, the High Court held that,

++ A decision of question of fact depends upon appreciation of evidence and material placed before the authorities, i.e. the Tribunal. The Tribunal, as a final fact finding authority, has to determine and decide question of fact in dispute by examination of evidence and material produced. Inference and conclusion based upon appreciation of fact does not give rise to a question of law. In this context that the assessee claims and asserts that the decision of the Tribunal was perverse, and therefore substantial question of law arises from the order. A finding of a Tribunal on fact does not become perverse merely because another finding or conclusion was possible. Test and benchmark of perversity is far stringent and strict. Factual findings can be only interfered with when they are patently unreasonable, not supported by any evidence or are based upon extraneous and irrelevant material. Interference may be justified when the conclusions are based upon mere conjectures and surmises or where no person acting judicially and properly instructed under the relevant law could have come to the same decision and conclusion. In the current factual matrix, having noted the evidence and material before the Tribunal, the final conclusion arrived at, it cannot be said, that Tribunal's conclusion was based upon no evidence to support or was rationally not possible or entirely unreasonable. The conclusion is also not contradictory.

(See 2018-TIOL-1627-HC-DEL-IT)