2014 (8) TMI 1070 - HC - Income Tax

Addition made on the basis of entries recorded in the books of accounts - Held that - Tribunal was justified in confirming the deletion as against the addition made by the Assessing Officer. - Decided against revenue

Summary

Issues:
1. Justification of confirming the deletion of specific amount against the addition made by the Assessing Officer.
2. Validity of the Tribunal's decision in allowing further relief on credit entries without proper explanation.
3. Perversity of the Tribunal's finding in relation to the facts and circumstances of the case.

Issue 1:
The High Court considered the appeal arising from an order of the Income Tax Appellate Tribunal, Jaipur Bench 'B', which allowed the appeal of the assessee and dismissed the appeal of the Department for the assessment years 1997-98 to 2003-04. The Tribunal found that the Assessing Officer was not justified in deleting a specific amount from the total addition made in the account of the assessee. The Income Tax Department challenged this decision, questioning the Tribunal's justification in confirming the deletion of the amount despite the entries being recorded in the books of accounts of another entity, where the person associated was deemed a Benami of the assessee. The High Court held that the findings of the Tribunal were factual and did not raise any substantial questions of law for consideration, leading to the dismissal of the appeal under Section 260A of the Income Tax Act, 1961.

Issue 2:
The second issue raised in the appeal pertained to the Tribunal's decision to allow further relief on credit entries totaling a specific amount in the name of an individual, despite the failure of the assessee to provide a satisfactory explanation. The Department contested this decision, arguing that the Tribunal did not adequately discuss and decide on the grounds raised by the Department. However, the High Court observed that the findings of the Tribunal were factual in nature and did not warrant interference under Section 260A of the Income Tax Act, 1961. Consequently, the appeal was dismissed based on the lack of substantial questions of law arising from the Tribunal's decision.

Issue 3:
The final issue raised in the appeal questioned the perversity of the Tribunal's finding in light of the facts and circumstances of the case. The Department contended that the Tribunal's decision was contrary to the record and untenable in the eye of the law. However, the High Court examined the orders passed by the Assessing Officer and the Commissioner of Income Tax (Appeals) and concluded that the findings of the Tribunal were factual and did not give rise to any substantial questions of law requiring the Court's consideration. As a result, the appeal was dismissed, affirming the Tribunal's decision in the matter.

In summary, the High Court dismissed the Income Tax Department's appeal, as it found no substantial questions of law arising from the Tribunal's decision to warrant interference under Section 260A of the Income Tax Act, 1961. The issues regarding the deletion of a specific amount against the addition made by the Assessing Officer, the validity of allowing further relief on credit entries without proper explanation, and the alleged perversity of the Tribunal's finding were all addressed and resolved in favor of the assessee, leading to the dismissal of the appeal.