2015 (1) TMI 389 - HC - Income Tax

Disllowance of gold purchase - undisclosed income - Held that - From a perusal of the order of the Tribunal, it transpires that the appellant had claimed that he had purchased gold worth ₹ 2,57,000/- from one M/s. Nayan Jewellers, which was forming part of ₹ 8,81,000/-, which was seized by the Custom Authorities on 22.01.2000. From the order of the CIT(A) as well as the assessment order framed by the concerned AO it clearly transpires that despite the fact that ample opportunities being given to the assessee, he could neither offer any satisfactory explanation in that regard nor could he rebut the same. Therefore, the concerned AO, after giving detailed reasons, made addition of ₹ 2,57,000/- which in turn is confirmed by the CIT(A). The Tribunal, while passing the impugned order, has also considered the assessment order framed by the concerned AO as well as the reasoning given by the learned CIT(A) and has sustained the same. We are, therefore, of the opinion that there being concurrent finding of facts and proper evaluation of facts and law - Decided against assesse. Whether on the facts and in the circumstances of the case the Tribunal has substantially erred in confirming the disallowance of loss of ₹ 91,260/- without any discussion or independent reasoning by simultaneously granting relief for allowability of expenditure of ₹ 75,197/- which is already allowed by the CIT(Appeals) - Held that - it is an admitted position that, though, the expenses of auction, i.e. towards advertisement etc., were initially borne by the Revenue, later on, same was reimbursed by the assessee. We are, therefore, of the opinion that the Tribunal committed no error in deciding question No.2. - Decided in favour of assesse.

Issues Involved:
1. Challenge to the order of the ITAT regarding additions and disallowances for A.Y. 2000-01.
2. Questions raised by the appellant in the appeal.
3. Framing of questions by the Court.
4. Arguments presented by the appellant and respondent.
5. Decision on the first question of law.
6. Decision on the second question of law.

Analysis:

1. The appellant-assessee challenged the ITAT's order regarding additions and disallowances for A.Y. 2000-01. The appellant filed the appeal after the CIT(A) partly allowed the appeal. The appellant raised questions regarding the addition/disallowance of Rs. 2,57,000, the disallowance of loss of Rs. 91,260, and the treatment of business losses under the Income-tax Act, 1961.

2. The Court framed two questions for consideration based on the appellant's appeal. The questions focused on the addition/disallowance of Rs. 2,57,000 and the disallowance of loss of Rs. 91,260. The appellant's counsel argued that the appellant had disclosed all facts correctly and should be favored.

3. The appellant's counsel referred to previous decisions in favor of the appellant and argued for a favorable decision on both questions. The respondent's counsel highlighted the appellant's failure to explain income and supported the dismissal of the appeal.

4. The Court examined the facts and orders of the CIT(A) and ITAT. Regarding the first question, the Court found that the appellant failed to provide a satisfactory explanation for the purchase of gold, leading to the addition upheld by the ITAT. The Court ruled in favor of the revenue on this issue.

5. Concerning the second question, the Court referred to a previous decision where a loss incurred during business activities was allowed as a deduction. The Court found that the appellant's claim for the loss should be allowed, leading to a decision in favor of the appellant on this issue.

6. Ultimately, the Court allowed the appeal to the extent mentioned, ruling in favor of the appellant on the second question while deciding against the appellant on the first question. No costs were awarded in the judgment.

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