2015 (4) TMI 58 - HC - Income Tax

Correctness of the notice issued under section 158BC - Whether Commissioner of Income Tax (Appeals) did not grant full relief to the assessee and restricted it? - 10% of the sum of ₹ 8,98,36,614/- was held to be from inflated purchases by CIT(A) but deleted by tribunal - Held that - if the books of accounts and other documents relevant for this purpose in terms of the Tribunal's conclusion establish that the assessing officer's conclusion that the purchases are bogus cannot be sustained, then, the sustainence to the extent of 10 / 11% by the Commissioner of Income Tax (Appeals) was also not justified and is unsustainable, that is only because it was based on loose sheets. On the strength of these loose sheets, a case of bogus purchase cannot be made out. There is no other evidence other than this and available on record with the assessing officer. It is in these factual circumstances that the order passed by the Commissioner even to the above extent has been set aside. We do not find that such conclusion and essentially on the facts as are to be found of the impugned order would raise any substantial question of law. The Tribunal's conclusions are consistent with all the documents and their contents. This is nothing but an attempt to seek re-appreciation and re-appraisal of such factual conclusion. - Decided against revenue.

Summary

Issues:
1. Correctness of the notice issued under section 158BC of the Income Tax Act, 1961 for block assessment proceedings.
2. Grant of full relief to the assessee by the Commissioner of Income Tax (Appeals).
3. Validity of adding undisclosed income as inflated purchases by the assessing officer.
4. Tribunal's decision to delete the portion of the order regarding inflated purchases.

Analysis:
1. The High Court addressed the issue of the correctness of the notice issued under section 158BC of the Income Tax Act for block assessment proceedings. The Tribunal upheld the order of the Commissioner of Income Tax (Appeals) in this regard. The Court found no substantial question of law in favor of the revenue, concluding that the notice did not suffer from legal infirmities necessitating intervention.

2. The Court examined the grant of full relief to the assessee by the Commissioner of Income Tax (Appeals). The Tribunal intervened in the Commissioner's order, leading to the argument that substantial questions of law arose. However, the Court disagreed, citing multiple grounds and factual circumstances supporting the Commissioner's decision.

3. The judgment delved into the validity of adding undisclosed income as inflated purchases by the assessing officer. The Commissioner of Income Tax (Appeals) had maintained a portion of the sum as inflated purchases, but the Tribunal later deleted this portion. The Court analyzed the Tribunal's reasoning, emphasizing that the assessing officer's conclusion of bogus purchases lacked substantial evidence beyond loose sheets, leading to the deletion of the amount in question.

4. Lastly, the Court discussed the Tribunal's decision to delete the portion of the order concerning inflated purchases. The Tribunal's conclusions were deemed consistent with the available documents and facts of the case. The Court emphasized that seeking re-appraisal of factual conclusions was impermissible, especially when no perversity was found in the Tribunal's order. Consequently, the appeal was dismissed, highlighting the alignment of the Tribunal's conclusions with the case's evidentiary framework.