2019 (2) TMI 237 - HC - Income Tax

Addition of advance amount repaid by the assessee - whether AO could bring anything material on record to prove that the assessee has made repayment to the customers? - Held that - As regards the deletion of ₹ 10,86,557/-, the IT Appellate Tribunal has not agreed with the finding of the CIT(A) as detailed in paragraph 33 of the order and concluded that the Assessing Officer has rightly applied addition of net profits at the rate of 8% p.a. on the total sale of assessee. Consequently, set aside the finding of the CIT(A) and confirmed the addition. Having perused the orders passed by the AO, CIT(A) and the IT Appellate Tribunal, we are of the considered view that the IT Appellate Tribunal did not commit any error of law and fact while disallowing the addition of ₹ 39,71,000/- as against the addition of ₹ 45,13,000/- made by the assessee. The entire gamut of matter is in realm of facts. No question of law.

Summary

Issues:
1. Appeal by Revenue under section 260A of the Income Tax Act, 1961 against a common order for various assessment years dated 31/01/2018.
2. Dispute related to assessment year 2008-09 for M/s Bhomiyaji Land & Finance Co.
3. Deletion of additions made by the Assessing Officer in the assessment.
4. Appeal filed by both the Assessee and the Revenue before the Income Tax Appellate Tribunal, Bench at Indore.
5. Decision of the IT Appellate Tribunal on the deletion of specific amounts from the additions made by the Assessing Officer.
6. Review of orders passed by the Assessing Officer, CIT(A), and the IT Appellate Tribunal.

Analysis:
The case involves an appeal by the Revenue under section 260A of the Income Tax Act, 1961 against a common order for various assessment years, with a focus on the assessment year 2008-09 for M/s Bhomiyaji Land & Finance Co. The Assessee, engaged in development, plotting, and construction of houses, filed income tax returns for the year 2008-09, initially declaring a total income of ?2,12,277. However, after assessment under section 143(3) of the Act, the total income was assessed at ?68,53,834, leading to disputes and appeals.

The Commissioner of Income Tax (Appeals) partly allowed the Assessee's appeal, deleting certain additions made by the Assessing Officer. Subsequently, both the Assessee and the Revenue appealed before the Income Tax Appellate Tribunal, Bench at Indore. The IT Appellate Tribunal reviewed the deletions made by the CIT(A) in detail. In the context of the deletion of ?39,71,000, the Tribunal found that the Assessing Officer failed to prove that the Assessee did not repay customers, and confirmed that customers had indeed received the repayment. Hence, the Tribunal upheld the deletion of this amount. However, regarding the deletion of ?10,86,557, the Tribunal disagreed with the CIT(A) and confirmed the addition as net profits based on sales.

Upon examining the orders of the Assessing Officer, CIT(A), and the IT Appellate Tribunal, the High Court concluded that the Tribunal did not err in disallowing the addition of ?39,71,000, as it was a factual matter. The Court found no legal or substantial question of law necessitating interference under section 260A of the Act. Consequently, the appeal was dismissed for lacking merit.