2009 (7) TMI 1385 - HC - Income Tax

Summary

Issues involved:
The issues involved in this case are:
1. Whether the Tribunal was justified in not adjudicating ground No. 2 regarding the ex parte assessment under Section 144 of the Income Tax Act?
2. Whether the Tribunal was justified in directing to treat entire receipt of Rs. 2,97,839 as taxable income?
3. Whether non-production of documents can lead to an ex parte assessment against the assessee?
4. Whether the return available on record, duly audited by a chartered accountant, can be considered in the absence of account books?

Summary:

Issue 1:
The appellant filed a return showing total income of Rs. 7,675 along with audited accounts. Despite several opportunities, the appellant did not produce books of account, bills, and vouchers. An ex parte assessment under Section 144 was made, adding Rs. 2,97,839 to the total income of the assessee. The Tribunal confirmed the order of the Commissioner (Appeals) and dismissed the appeal.

Issue 2:
The appellant argued that the amount of Rs. 2,97,839 received was for repair and maintenance work, and only the profit should be added to the income. However, the assessing officer added the entire amount as income. The Tribunal upheld this decision, stating that the suppressed receipt was rightly added to the income.

Issue 3:
The respondent argued that despite multiple opportunities given to the appellant to explain the difference in receipts, no valid explanation was provided. The Tribunal agreed that the undisclosed receipt of Rs. 2,97,839 was rightly added to the income of the assessee due to lack of explanation for its suppression.

Issue 4:
The assessing officer, Commissioner (Appeals), and Tribunal all agreed that the suppressed receipt should be added to the income as the appellant failed to provide a valid explanation for the discrepancy. The Tribunal found no substantial question of law in the appellant's arguments and dismissed the appeal.

In conclusion, the High Court upheld the decision to add the undisclosed receipt to the income of the assessee, as the appellant failed to provide a satisfactory explanation for the difference in receipts.