2014 (5) TMI 856 - HC - Income Tax

Validity of order of remanding back the addition Amount added as undisclosed income - Held that - The decision of the Tribunal cannot be accepted as to the remanding the matter back to the AO is in any manner perverse or raises a question of law the contention of the assessee that the amounts noted on the documents reflected contributions to Virendragram project was required to be verified and the same could be done by examining the entries in relation to the Virendragram project there was no infirmity with this reasoning. Deletion of certain addition made by AO Unexplained expenses Held that - Revenue contended that he Tribunal had deleted various deletions made by the AO without appreciating the evidence on record revenue has not been able to point out any specific instance which indicates that the decision of the Tribunal is perverse or not informed by reason. Deletion of household assets and unexplained sum Held that - The Tribunal found that the explanation given by the assessee with regard to the household items as well as with respect to the bank deposits in the account of M/s Bhatnagar Design were not satisfactory - the Tribunal concluded that the ad hoc addition of ₹ 10 lacs made on account of bogus expenses as well as the amount accepted by the assessee as undisclosed income were sufficient to include the - the finding of the Tribunal cannot be stated to be perverse No substantial question of law arises foe consideration - Decided against Revenue.

Summary

Issues:
1. Appeal by Revenue under Section 260A of the Income Tax Act, 1961 against a common order of the Income Tax Appellate Tribunal (ITAT).
2. Proceedings initiated under Chapter XIV-B of the Act following search and seizure operations.
3. Dispute over undisclosed income computation, additions, and deletions made by Assessing Officer, CIT (Appeals), and ITAT.
4. Questions of law raised by Revenue regarding remanding claims, deletions, and additions made by Assessing Officer.
5. Examination of explanations given by the assessee for various payments, household assets, bank deposits, and donations received.

Analysis:
1. The appeals by the Revenue were against a common order of the ITAT regarding undisclosed income computation post search and seizure operations. The Assessing Officer had computed undisclosed income at Rs.1,64,75,600/-, and the CIT (Appeals) partly allowed the assessee's appeal. Disputes arose over various additions and deletions made during the assessment.
2. The Revenue raised questions of law regarding remanding claims of Rs.28,44,500/-, additions on account of unexplained expenditure, and deletion of certain additions by the CIT (Appeals) and ITAT. The Tribunal remanded the claim of Rs.28,44,500/- to verify if payments were reflected in the accounts of the project, which was deemed reasonable.
3. The Revenue contested deletions made by the CIT (Appeals) and ITAT without appreciating the evidence on record. However, no specific instances of perversity were pointed out, leading to dismissal of these contentions as no question of law was found to arise.
4. Issues related to additions of Rs.2.5 lacs for household assets and Rs.1,40,440/- for unexplained bank deposits were also examined. The Tribunal found the explanations unsatisfactory but deemed the ad hoc additions and disclosed income to cover these amounts, which was upheld.
5. The Tribunal's decisions were upheld as not raising any questions of law for consideration, resulting in the dismissal of the appeals by the Revenue. The detailed analysis of various claims, additions, and deletions provided a comprehensive overview of the disputes and their resolution in the judgment.