2014 (2) TMI 1078 - HC - Income Tax

Block Assessment Notice for undisclosed income for the block period u/s 158BC of the Act Held that - Both the authorities have expressed doubt regarding the sufficiency of the document as prima facie material and it is after verifying the statement of accounts, day book and ledger that they have formed an opinion that the certificate alone was not enough to mulct such a liability for payment of tax on the assessee - Since there is no perversity in the findings of the appellate authorities, thus, the contentions raised by the revenue cannot be taken as a substantial question of law. The appellate authority has considered all the documents produced and has clearly narrated the source of income for the purpose of the said investment - The view of the appellate authority had been confirmed by the Tribunal as well The validity of the documents relied upon by the assessing officer had been considered in great detail and the first appellate authority had narrated the availability of evidence for arriving at the conclusions with reference to the undisclosed income alleged to have been made by the assessee - thus, there is no need to take a different opinion no substantial question of law arises from the appeal Decided against Revenue.

Summary

Issues:
1. Block assessment for the period from 1.4.1996 to 18.12.2012.
2. Undisclosed income determination for civil contractor.
3. Appeal against the order passed by the Income-tax Appellate Tribunal.
4. Addition of undisclosed income by assessing officer.
5. Appeal before the Commissioner of Income-Tax (Appeals) and Tribunal.
6. Substantial questions of law raised by the revenue.
7. Examination of seized documents and post-search documents.
8. Verification of undisclosed income sources.
9. Assessment of unaccounted investments and receipts.

Analysis:
1. The case involves a civil contractor whose undisclosed income for the block period was initially determined by the assessing officer. The Commissioner of Income-Tax (Appeals) reduced the undisclosed income, and the Tribunal further revised it after remittance by the High Court.

2. The substantial questions of law raised include issues related to the reliance on seized documents, post-search documents, and the deletion of additions to undisclosed income. The Tribunal's decision on these matters was challenged by the revenue.

3. The Tribunal's findings regarding the undisclosed income from specific projects were based on the examination of certificates issued by third parties. The appellate authorities concluded that the assessing officer's additions were not justified, leading to the reduction of undisclosed income.

4. The assessment of unaccounted investments, particularly the investment in an IBP petrol pump, was thoroughly examined by the appellate authority and confirmed by the Tribunal. The source of income for the investment was clearly narrated, leading to the dismissal of the revenue's appeal.

5. Regarding unaccounted receipts, the authorities found discrepancies in the seized documents and lack of evidence for the alleged transactions. The appellate authority and the Tribunal upheld their decisions based on the available material evidence, leading to the dismissal of the appeal.

6. The Court emphasized that the findings of the appellate authorities were not perverse or illegal and were based on the evidence presented during the assessment. As no substantial question of law arose from the factual circumstances, the appeal was dismissed, and the original order was upheld.