2010 (11) TMI 777 - HC - Income Tax

Unexplained investment - Estimation of addition u/s 158B(b) by the multiplication of receipts being de hors the material available - Whether the Tribunal s order is sustainable in confirming the addition being contrary to the modus operandi and the nature of transactions carried on by the assessee? - Held that - The assessee was unable to point out that the findings concurrently recorded by the Assessing Officer the Commissioner of Income-tax (Appeals) and the Tribunal while sustaining the addition of Rs.3, 18, 000 were erroneous or perverse in any manner. Only an effort was made by the counsel for re-appreciation of evidence by this court which is not within the ambit of section 260A of the Act. As noticed earlier the explanation furnished by the assessee was not accepted by any of the authorities below. The Tribunal has taken a plausible view

Summary

Issues:
1. Estimation of addition under section 158B(b) without sufficient material.
2. Confirmation of addition contrary to the modus operandi and nature of transactions.
3. Granting benefit of telescoping of sustained additions in unexplained income.

Estimation of Addition under Section 158B(b):
The appeal under section 260A of the Income-tax Act, 1961 was filed against the order passed by the Income-tax Appellate Tribunal, Chandigarh Bench, relating to the block period from April 1, 1988 to September 22, 1998. The assessing authority made additions on various counts, which the assessee disputed, particularly the addition on account of estimation of income and the ad hoc addition of Rs. 3,18,000. The Tribunal partly allowed the appeal, sustaining the addition of Rs. 3,18,000 only. The main issue for consideration was the validity of the addition made by the Assessing Officer on account of unexplained investment in miscellaneous items amounting to Rs. 3,18,000. The Tribunal rejected the explanation of the assessee, stating that no specific explanation had been furnished, and the onus was on the assessee to offer a credible explanation. The Tribunal upheld the addition, concluding that the explanations provided were unsatisfactory.

Confirmation of Addition Contrary to Modus Operandi:
The Tribunal's order confirmed the addition of Rs. 3,18,000, which the assessee contended was contrary to the modus operandi and the nature of transactions carried out. However, the Tribunal found that the explanations provided by the assessee were not satisfactory and upheld the addition. The counsel for the assessee failed to demonstrate any error or perversity in the findings concurrently recorded by the authorities below. The Tribunal's decision was considered plausible, and the counsel's attempt at re-appreciation of evidence was deemed beyond the scope of section 260A of the Act. Consequently, no substantial question of law was found to arise in this appeal, leading to its dismissal.

Grant of Benefit of Telescoping of Sustained Additions:
The assessee sought the benefit of telescoping the sustained additions in unexplained income. However, the Tribunal's decision to uphold the addition of Rs. 3,18,000 was deemed valid and not erroneous. The counsel's arguments for re-evaluation of evidence were rejected, and the Tribunal's view was upheld as reasonable. As a result, the appeal was dismissed for lack of merit, with no substantial question of law identified.