2010 (7) TMI 787 - HC - Income Tax

Deletion of unexplained cash credit and unexplained investment - CIT(A) and ITAT deleted the addition - held that - Revenue made strenuous efforts to persuade this Court to re-appreciate the evidence and record fresh conclusion on the basis thereof. But the counsel could not point out any mis-reading or mis-appreciation of evidence on the basis of which it could be recorded that the findings of CIT (A), which were approved by the Tribunal, were erroneous or perverse in any manner. The view taken by the authorities below is plausible view based on appreciation of evidence available on record. No exception can, therefore, be taken to said findings.

Summary

Issues:
1. Addition of unexplained credit in bank account.
2. Addition of unexplained investment in advance to an individual.

Issue 1: Addition of unexplained credit in bank account:
The Revenue challenged the deletion of Rs. 7,72,837 as unexplained deposits in the bank account of the assessee. The Assessing Officer had initiated proceedings under Section 147 of the Income-tax Act due to unexplained deposits and advances. The CIT (A) partially allowed the appeal, deleting the additions. The Tribunal upheld the CIT (A) order. The Tribunal noted the appellant's explanation regarding the deposits, citing documents and circumstances such as health issues in the family. The Tribunal found the explanations satisfactory and deleted the addition, emphasizing that the receipts were from legitimate sources and no adverse inference could be drawn for the relevant assessment year. The High Court affirmed the Tribunal's decision, stating that the authorities' findings were based on plausible views and the evidence on record was properly appreciated, dismissing the Revenue's appeal.

Issue 2: Addition of unexplained investment in advance to an individual:
The second issue involved the addition of Rs. 6,50,000 as unexplained investment in an advance to an individual. The Assessing Officer added this amount as unexplained income of the assessee. The CIT (A) confirmed part of the addition while deleting the remaining amount. The Tribunal reviewed the case and found that out of the total loan amount, Rs. 6,50,000 was explained and paid from the same bank account via cheques. The Tribunal noted that the first appellate authority had scrutinized the explanation provided by the assessee and found no infirmity in the order. The High Court upheld the Tribunal's decision, stating that the Tribunal had correctly analyzed the evidence and affirmed the deletion of the Rs. 6,50,000 addition. The Court found no reason to interfere with the Tribunal's findings, dismissing the Revenue's challenge.

In conclusion, the High Court dismissed the Revenue's appeal regarding the deletion of additions made by the CIT (A) in relation to unexplained deposits and unexplained investment in an advance. The Court upheld the Tribunal's decisions, emphasizing that the explanations provided by the assessee were satisfactory, and the authorities' findings were based on proper appreciation of the evidence on record.