2011 (1) TMI 786 - HC - Income Tax

Cash credit - Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT (A) deleting the addition of Rs.11,86,292/- made u/s.69 of the Act in respect of unaccounted www.lexpertsonline.com investment in stock of cloth under work-in-progress - the Tribunal, as well as the Commissioner (Appeals) after appreciation of the evidence on record, have recorded concurrent findings of fact and the conclusion arrived at by the Tribunal is based on such findings of fact. It is not the case of the revenue that the Tribunal has considered any irrelevant material or that any relevant material has been ignored. No evidence to the contrary is pointed out to dislodge the findings recorded by the Tribunal. In the circumstances, the impugned order insofar as the same relates to this ground of appeal, being based on findings of fact recorded by the Tribunal, does not give rise to any question of law.

Summary

Issues: Appeal under section 260A of the Income Tax Act challenging the Tribunal's order on addition of unaccounted investment in stock of cloth and excess grey cloth for Assessment Year 1993-94.

Analysis:
1. Issue [A]: Addition of Rs.11,86,292/- for unaccounted investment in stock of cloth under work-in-progress.
- During search proceedings, assessee disclosed Rs.10 lakhs but offered only Rs.4 lakhs in the return of income.
- Assessing Officer reconciled excess cloth at 1,10,966 metres valued at Rs.14,92,492/-, making an addition of Rs.11,86,292/-.
- Commissioner (Appeals) deleted the addition based on evidence and supporting documents provided by the assessee.
- Tribunal concurred with Commissioner (Appeals) that Assessing Officer's figures lacked necessary evidences and contemporary records, supporting the assessee's reconciliation.

2. Issue [B]: Addition of Rs.14,82,360/- for excess grey cloth.
- Tribunal found no discrepancy in unaccounted stock of grey cloth as pointed out by the assessee.
- Assessee's version supported by evidence like folding reports, bills, and identifiable parties who supplied cloth for job work.
- Commissioner (Appeals) and Tribunal both upheld the assessee's contentions, dismissing the appeal by the revenue.

3. Overall Analysis:
- Both the Tribunal and Commissioner (Appeals) based their decisions on concurrent findings of fact after appreciating the evidence on record.
- The Tribunal found no legal errors in the orders passed by the lower authorities and dismissed the appeal.
- No substantial question of law arose from the Tribunal's order, as the conclusions were based on reasonable and supported findings of fact.

In conclusion, the Tribunal's decision on both issues regarding the addition of unaccounted cloth in process and excess grey cloth was upheld based on the evidence presented and reconciliations made by the assessee. The appeal was dismissed as no legal errors were found to warrant interference.