2017 (4) TMI 115 - HC - Income Tax

Addition on bogus purchases and bogus labour charges - Held that - CIT(A) as well as Tribunal have concurrently rendered the finding of fact that payments made for purchase of goods and for labour jobs to Mr. Anilkumar Chahwalla, were genuine. This finding of fact is further supported by the fact that the CIT(A), Valsad while dealing with the appeal filed by Mr. Anilkumar Chahwalla has examined these very transaction to conclude that they were genuine. Therefore, so far as question (a) is concerned, there are concurrent findings of fact by the CIT(A) as well as by the Tribunal. These findings are not shown to be perverse. In view of above, proposed question (a) does not give rise to any substantial question of law. Hence, not entertained. Statement of Shri Anilkumar Chawla was recorded under coercive pressure - Held that - The authorities CIT (A) as well as Tribunal have recorded the fact that the statement given to the DCIT, Valsad on 24th December, 2008 was a statement made in view of coercion and the same was retracted soon after i.e. 27th December, 2008. This also is a finding of fact which is not shown to be perverse in any manner. In view of the above, the question (b) does not give rise to any substantial question of law.

Summary

Issues:
Challenge to Tribunal's order deleting addition made on account of bogus purchases and labour charges.
Validity of the statement of Shri Anilkumar Chawla recorded under coercive pressure.

Analysis:
The case involved an appeal challenging the Income Tax Appellate Tribunal's order regarding the Assessment Year 2006-07. The Revenue raised questions of law regarding the deletion of additions made on account of bogus purchases and labour charges, as well as the validity of a statement recorded under coercion. The Assessing Officer initially determined the Respondent's income based on reports of bogus payments to Mr. Anilkumar Chahwalla. Subsequently, after reopening the assessment, it was found that payments to Mr. Chahwalla were bogus, leading to a revised income determination. The Respondent appealed to the Commissioner of Income Tax (Appeals) who allowed the appeal, citing retracted statements by Mr. Chahwalla and confirming the genuineness of transactions. The Revenue then appealed to the Tribunal, which dismissed the appeal based on the retraction of the statement made under pressure and the genuine nature of the transactions as confirmed by the CIT(A). Both the CIT(A) and the Tribunal concurred that the payments to Mr. Chahwalla were genuine and the statement was made under coercion, leading to the dismissal of the Revenue's appeal. The High Court upheld the decisions, stating that the findings of fact were not shown to be perverse, and hence, no substantial question of law arose for consideration. Therefore, the appeal was dismissed with no order as to costs.