2022 (2) TMI 1393 - HC - Income Tax

Addition u/s 68 - unexplained unsecured loans obtained by the assessee - tribunal confirmed the view of the CIT (Appeals) that the additions made by the assessing officer were not sustainable - HELD THAT - As observed that the companies through which the assessees had indulge into bogus accommodation entries, were not managed or controlled by Mr. Anand Sharma, who was supposed to be the kingpin. As it was observed that there was no link found in the documents and the financial statements of the companies concerned. As noted that the assessee had produced the affidavit and the notices issued by the AO u/s 131 and 133(6) of the Act which was duly complied by the creditors. The statement of director of Ms. Royal Crystal Dealers Pvt. Ltd. was also recorded by the assessing officer while the director has confirmed the transaction of loan. The tribunal further observed that the assessment order was passed solely on the report of the Investigation Wing, Kolkata which merely contained the narration of the statements recorded during the investigation and the assessing officer had in his possession only the statement of Anand Sharma. Tribunal was of the opinion that the assessing officer could not have made the additions in the hands of the assessee on the basis of the Investigation Wing at Kolkata to which the assessee was not privity to. The assessee was also not granted opportunity to cross-examine the persons whose statements were recorded by the investigation wing. Decided against revenue.

Issues:
1. Condonation of delay in filing appeals
2. Dispensing with filing certified copies of judgments
3. Challenge to the judgment of the Income Tax Appellate Tribunal
4. Deletion of addition made under Section 68 of the Income Tax Act, 1961
5. Validity of reassessment under Section-153A

Condonation of Delay in Filing Appeals:
The High Court waived defects in some appeals and condoned the delay in filing them based on reasons presented during arguments, disposing of the applications accordingly.

Dispensing with Filing Certified Copies of Judgments:
In cases where a certified copy of the impugned judgment was filed in one appeal, the High Court granted the request to dispense with filing certified copies in all related appeals, leading to the disposal of the applications.

Challenge to the Judgment of the Income Tax Appellate Tribunal:
Multiple appeals involving the same group of assessees arising from a search action by the revenue were considered. The central issue revolved around the deletion of additions made under Section 68 of the Income Tax Act, 1961. The Commissioner (Appeals) had initially deleted these additions, which the tribunal upheld, resulting in concurrent findings in favor of the assessee.

Deletion of Addition Made Under Section 68 of the Income Tax Act, 1961:
The High Court analyzed the tribunal's conclusions based on evidence assessment, emphasizing the factual nature of the findings. The tribunal found the additions made by the assessing officer unsustainable, noting discrepancies in the companies involved in the transactions. It highlighted that the assessing officer relied on a report from the Investigation Wing without providing the assessee an opportunity to cross-examine witnesses, leading to the dismissal of the revenue's appeal.

Validity of Reassessment Under Section-153A:
The tribunal also deemed some reassessments invalid, providing an additional ground for deleting the additions. The High Court decided not to examine this aspect further, as no question of law arose, ultimately dismissing all appeals and disposing of pending applications.

This detailed analysis of the judgment showcases the High Court's thorough consideration of various issues, including procedural matters, challenges to tribunal judgments, and the substantive tax law aspects concerning additions and reassessments under the Income Tax Act, 1961.

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