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2018 (9) TMI 1784 - HC - Income TaxAssessment u/s 153A - addition u/s 68 - additions made in silver bullion account - Held that - CIT(A) was not justified in considering the combined sales of gold and silver bullion because there was not a single incriminating document or any evidence found on the basis of which the Assessing Officer could reject the book results of purchase/sale of silver bullion. No addition can be made on estimations and on hypothetical grounds with regard to sale of silver bullion. We are also of the view that not only the enhancement made by the CIT(A) in silver bullion account by 17.5% but the application of GP rate of 1.25% applied by the learned CIT(A) is not justified. We, therefore, delete the additions made in silver bullion account - No substantial question of law.
Issues Involved:
1. Rejection of Books of Accounts and Additions by Assessing Officer (AO) 2. Confirmation of Additions by Commissioner of Income Tax (Appeal) [CIT(A)] 3. Deletion of Additions by Income Tax Appellate Tribunal (ITAT) 4. Substantial Questions of Law Raised by the Income Tax Department Detailed Analysis: 1. Rejection of Books of Accounts and Additions by Assessing Officer (AO): The AO rejected the Books of Accounts of the assessee and made additions on various grounds including Unaccounted Stock, Unexplained Credit under Section 68, Unaccounted Purchase, and Estimation of Gross Profit on the sale of Gold and Silver Bars. The total income was assessed at ?27,90,33,030/-. 2. Confirmation of Additions by Commissioner of Income Tax (Appeal) [CIT(A)]: The assessee appealed against the AO's order to the CIT(A), who confirmed an addition of ?50,00,000/- on account of Unexplained Credit under Section 68. However, the CIT(A) granted relief of ?4,98,05,923/- and partly affirmed the AO’s order. 3. Deletion of Additions by Income Tax Appellate Tribunal (ITAT): The ITAT allowed the appeal of the assessee by providing detailed fact findings: - Gross Profit Rate and Turnover Enhancement: ITAT scrutinized documents and found the method of estimation by AO defective. The CIT(A) had grouped sales of gold and silver bullion together and applied an enhanced gross profit rate. ITAT found this unjustified and directed to enhance turnover by 5% for the assessment years 2010-11 and 2011-12 while accepting the GP rate declared for 2009-10. - Unaccounted Investment: ITAT deleted the addition of ?2,02,47,590/- on account of unaccounted investment in A.Y. 2009-10, finding the assessee’s explanation and documents sufficient. - Purchases from M/s Hyundai Exports: ITAT deleted the addition of ?17,85,88,277/- after verifying that the purchases were entered in regular books and payments were made through banking channels. - Unexplained Credit from M/s Pramila Investors & Finance Ltd.: ITAT found that the assessee had provided sufficient evidence to establish the identity, creditworthiness, and genuineness of the transaction, thus deleting the addition of ?50,00,000/-. - Repayment from M/s MP Real Estate: ITAT upheld the CIT(A)'s finding that the amount of ?45,00,000/- was a repayment of the partner’s contribution and not a cash credit, thus deleting the addition. 4. Substantial Questions of Law Raised by the Income Tax Department: The Income Tax Department raised several questions of law, which the Court found to be questions of fact: - Deletion of Addition of ?2,02,47,590/-: The Court held that the ITAT’s detailed fact-finding did not involve any substantial question of law. - Deletion of Addition of ?17,85,88,277/-: The Court found that the genuineness of the purchase was a question of fact, not law. - Deletion of Addition of ?50,00,000/-: The Court agreed with ITAT’s findings that the transaction was genuine and did not involve a substantial question of law. - Deletion of Addition of ?45,00,000/-: The Court found the issue to be purely factual and upheld the concurrent findings of CIT(A) and ITAT. Conclusion: The Court dismissed the appeal, stating that the questions raised were factual and not substantial questions of law. The findings of the ITAT were based on a thorough analysis of the facts and documents presented, and no perversity or illegality was found in their conclusions. The appeal was dismissed with no order as to costs.
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