2016 (6) TMI 384 - HC - Income Tax

Unexplained credit under Section 68 - ITAT delted the addition - Held that - Revenue does not dispute that in the present case despite the Assessee furnishing confirmation from the investor companies, their acknowledgment returns, certificates of incorporation, confirmation of payment of share application money etc, the AO did not conduct any inquiry to verify the said documents. He only relied on the report of investigation which in turn was based entirely on the statements of the alleged accommodation entry providers The Court is not willing to accept the submission of revenue to urge that in such event the matter should be remanded to the CIT (A) for a fresh consideration of the genuineness and creditworthiness of the creditors for the reason that the AY in question is of 2003-04 and at this stage to remand the matter to enable the Revenue to rectify an obvious error would not be justified. No substantial question of law arises. - Decided against revenue

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Merits of the appeal against the order of the Income Tax Appellate Tribunal.

Condonation of Delay:
The High Court noted an inordinate delay of 375 days in filing the appeal by the Revenue. The Court found the excuse provided by the Department regarding the practice directions for filing soft copies of paperbooks unacceptable. Despite prior notice and arrangements by the Registry for scanning services, the delay was deemed unjustifiable, leading to the dismissal of the application for condonation of delay.

Merits of the Appeal:
The appeal by the Revenue challenged the ITAT's decision upholding the deletion of an addition of ?1,20,00,000 to the disclosed income for Assessment Year 2003-04 under Section 68 of the Income Tax Act, 1961. The Revenue contended that the AO did not conduct a proper inquiry despite the Assessee providing various supporting documents. The Revenue sought to rely on a decision of the Calcutta High Court to remand the matter for fresh consideration. However, the Court refused this submission, stating that remanding the matter after such a long period would be unjustified, and no substantial question of law arose. Consequently, the appeal was dismissed both due to the delay in filing and on merits.

This summary provides a detailed analysis of the High Court judgment, covering the issues of condonation of delay and the merits of the appeal comprehensively.