2015 (1) TMI 1203 - HC - Income Tax

Addition u/s 69C - Held that - In the present case, there being concurrent finding of fact holding that no amount of ₹ 2 crores or any part thereof was paid by the respondent-assessee to the Captain Satish Sharma. No occasion to invoke section 69C of the Act can arise.

Summary

Issues:
Challenge to order under section 260A of the Income-tax Act for the assessment year 1994-95. Question of law regarding deletion of addition under section 69C of the Income-tax Act.

Analysis:
The appeal by the Revenue challenged the order of the Income-tax Appellate Tribunal for the assessment year 1994-95. The main issue raised was whether the Tribunal was justified in deleting the addition of Rs. 2 crores made by the Assessing Officer under section 69C of the Income-tax Act. The Assessing Officer had added Rs. 2 crores to the respondent-assessee's income as unexplained expenditure based on information that the respondent had paid this amount to a Minister. However, the respondent denied making any such payment.

During the assessment proceedings, the Assessing Officer relied on information that the respondent had paid Rs. 2 crores to a Minister, based on a statement made by an individual. The Commissioner of Income-tax (Appeals) allowed the appeal by the respondent, noting that the copies of the statement were not fully furnished and considering the decision of the Delhi High Court in a similar case. The Revenue then appealed to the Tribunal.

The Tribunal upheld the order of the Commissioner of Income-tax (Appeals), stating that the basis of the addition was found to be unreliable by the Delhi High Court in a similar case. The Revenue argued that the charge-sheet itself alleging the payment should establish the expenditure, but the High Court found that the findings of the lower authorities were based on evidence and not perverse. The High Court also noted that the trial court acquitted the Minister, and the High Court dismissed the State's revision application.

The High Court found that there were concurrent findings of fact that no amount was paid by the respondent to the Minister, and therefore, there was no basis to invoke section 69C of the Act. The High Court dismissed the appeal, emphasizing that no substantial question of law arose in this case. The Revenue's appeal against a similar case was dismissed due to procedural reasons, further supporting the decision in the present case.

In conclusion, the High Court upheld the decision to dismiss the appeal by the Revenue, as there was no evidence to support the addition of Rs. 2 crores to the respondent's income. The findings of fact were considered valid, and no legal basis existed to invoke section 69C of the Income-tax Act.