2014 (11) TMI 1244 - HC - Income Tax

Addition being the amount credited to the capital account of the assessee - ITAT deleted the addition - HELD THAT - Tribunal has rendered the decision after examining the books of accounts and other related documents. Therefore, there is no scope for any perversity. Addition under the head unexplained cash credit - ITAT deleted the addition - HELD THAT - The correct position of law has been followed by the learned Tribunal. The genuineness of the deposits cannot be gone into in the block assessment proceedings and it could have been gone into in the regular assessment proceedings because in the block assessment, only the books of accounts are to be examined and upon examination of books of accounts, if the transaction appears to be in consonance with the facts, then genuineness cannot be gone into. Therefore, the learned Tribunal has correctly upheld the decision of the CIT (Appeals). Credits or deposits were reflected in the regular returns of income filed by the assessee prior to the date of search - This income could not be questioned in the block assessment and it could be done only in the regular assessment. The correct position of law has been applied. We, therefore, do not find any element of law for consideration and decision of this Court.

Summary

Issues:
1. Perversity of Tribunal's order
2. Deletion of addition to capital account
3. Deletion of unexplained cash credit addition

Analysis:
1. The judgment was sought against the Tribunal's order for assessment years 1996-97 and 2001-02. The first issue raised was whether the Tribunal's order was perverse. The Chief Justice noted that the Tribunal had examined the books of accounts and related documents, finding no scope for perversity in their decision. Therefore, the Tribunal's decision was upheld on this issue.

2. The second issue concerned the deletion of an addition to the capital account of the assessee amounting to Rs. 35,10,000. The Tribunal, after thorough examination, concluded that the genuineness of the deposits could not be questioned in block assessment proceedings. The Chief Justice agreed with this interpretation, stating that in block assessments, only the books of accounts are examined, and genuineness can be questioned in regular assessment proceedings. Therefore, the Tribunal's decision to delete the addition was upheld based on the correct application of the law.

3. The final issue involved the deletion of an addition of Rs. 55,07,434 under the head of unexplained cash credit. The Tribunal found that these credits were reflected in the regular income tax returns filed by the assessee before the search date. As per the law, such income could only be questioned in regular assessments, not in block assessments. The Chief Justice concurred with this interpretation, stating that the correct position of the law was applied. Consequently, there was no legal ground for the Court to consider or decide on this matter. The appeal was dismissed, and no costs were awarded.