2016 (8) TMI 911 - HC - Income Tax

Addition u/s 68 - Held that - Assessee produced documents which were examined in detail. It is only after discussing the entire material in the light of the remand report of the Assessing Officer the CIT(A) has come to a definite conclusion that the Assessee has been able to sufficiently explain, to the satisfaction of the CIT(A), of the identity, genuineness and creditworthiness of the creditors. This is in respect of both the additions sought to be made by the AO under Section 68 of the Act, on account of alleged unexplained share application money as well as unsecured loans. The CIT(A) has also deleted the addition on the question of unexplained investment and returned a categorical finding that these investments have been sufficiently explained by the Assessee. The reasons for deletion of the addition in relation to the purchase of the plot have also been discussed in sufficient detail by the CIT (A). The above factual findings have been concurred with by the ITAT in a very detailed order again discussing the material available on record. The Court has not been persuaded by the learned counsel for the Revenue to view the above concurrent findings to be suffering from any perversity requiring any substantial question of law to be framed, as urged by the Revenue.

Summary

Issues:
1. Appeal by Revenue against ITAT order for AY 2007-08.
2. Questions raised by Revenue regarding additions made by AO.
3. CIT(A)'s findings on identity, genuineness, and creditworthiness of creditors.
4. Deletion of additions made by AO under Sections 68 and 69 of the IT Act.
5. ITAT's concurrence with CIT(A)'s findings.
6. Dismissal of the appeal.

Analysis:
1. The case involves an appeal by the Revenue against the Income Tax Appellate Tribunal's (ITAT) order for the Assessment Year 2007-08. The Revenue raised four questions before the Court regarding additions made by the Assessing Officer (AO) under different sections of the IT Act.

2. The Commissioner of Income Tax (Appeals) (CIT(A)) examined documents produced by the Assessee during the proceedings. After detailed scrutiny and considering the remand report of the AO, the CIT(A) concluded that the Assessee adequately explained the identity, genuineness, and creditworthiness of the creditors. This explanation covered additions under Section 68 for unexplained share application money and unsecured loans, as well as the deletion of an addition related to unexplained investment under Section 69 and the purchase of a plot.

3. The CIT(A) provided specific reasons for deleting the additions, stating that the Assessee sufficiently clarified the investments. The ITAT also reviewed the case extensively, supporting the CIT(A)'s factual findings. The Court did not find any merit in the Revenue's argument that the concurrent findings were flawed or required the framing of substantial questions of law.

4. Ultimately, the Court dismissed the appeal, affirming the CIT(A) and ITAT's conclusions. The decision was based on the satisfactory explanations provided by the Assessee regarding the contentious issues raised by the Revenue.