2012 (9) TMI 1196 - HC - Income Tax

Summary

Issues involved:
The issue involves the deletion of an addition made by the Assessing Officer in respect of capital gain as unexplained cash credit under section 68 of the Income Tax Act.

Details of the judgment:

1. Assessment and Addition:
The assessee filed the return of income for the assessment year 2006-07, and the Assessing Officer treated the short term capital gain declared by the assessee as unexplained cash credit under section 68 of the Income Tax Act. The Assessing Officer's reason was that the assessee brought income from unaccounted sources in his books of account by paying lesser tax, claiming it as short term capital gain.

2. Appeal and Tribunal's Decision:
In the appeal, the CIT(A) directed the Assessing Officer to accept the capital gain as disclosed by the assessee. The Revenue challenged this before the Tribunal. The Tribunal, after considering the arguments, noted that the assessee had declared the short-term capital gain in the return of income. The Tribunal found that the source of credit was explained by the assessee with documentary evidence, which was not found false. The Tribunal concluded that the Assessing Officer treated the capital gain as unexplained credit based on doubts and suspicion, while the CIT(A) had valid reasons for accepting the declared capital gain.

3. Conclusion:
The Tribunal's view was that the Assessing Officer's treatment of the capital gain as unexplained credit was based on doubts and suspicion, whereas the CIT(A) had provided valid reasons for accepting the declared capital gain. The Tribunal declined to interfere, stating that no substantial question of law arose for consideration. Consequently, the Tax Appeal was dismissed based on the findings of fact, as no substantial legal issue was identified for the court's consideration.