2019 (6) TMI 1128 - HC - Income Tax

Addition u/s 68 - unexplained cash credits - Tribunal deleted addition - whether the evidence furnished by the assessee in support of (i) identify (ii) genuineness of transaction and (iii) creditworthiness of each of the creditors on facts of the case as per records is sufficient evidence to uphold the cash credits in all cases to be genuine u/s. 68? - HELD THAT - No error not to speak of any error of law could be said to have been committed by the Tribunal in passing the impugned order. We are of the view that there is no substantial question of law involved in the present tax appeal. The Tribunal having gone through the materials on record and after due comparison of the two accounts ultimately, held in favour of the assessee. The appeal is more on factual aspects rather than on any substantial question of law. We would not like to disturb the findings recorded by the Tribunal. In the result, this appeal fails and is hereby dismissed.

Summary

Issues Involved:
- Appeal against order passed by Appellate Tribunal allowing appeal filed by assessee for Assessment Year 2009-10.
- Questions raised by Revenue regarding deletion of addition made under section 68 of the Income Tax Act.
- Analysis of Tribunal's decision in relation to the capital introduction in the books of Jay Jewellers and unsecured loans taken by the assessee.

Issue 1: Appeal against Tribunal's Order
The High Court heard the Tax Appeal under Section 260A of the Income Tax Act, 1961, filed by the Revenue against the order of the Appellate Tribunal. The Tribunal had allowed the appeal filed by the assessee for the Assessment Year 2009-10, which led to the Revenue challenging the decision.

Issue 2: Questions Raised by Revenue
The Revenue proposed substantial questions of law in the appeal, primarily focusing on the deletion of addition under section 68 of the Income Tax Act. The questions raised included whether the evidence provided by the assessee was sufficient to support the unexplained cash credits, and whether the Tribunal was correct in deleting the addition despite discrepancies in the capital accounts of the assessee and Jay Jewellers.

Issue 3: Analysis of Tribunal's Decision
The Tribunal, in its decision, analyzed the case put forth by the Assessing Officer regarding the introduction of capital in the accounts of Jay Jewellers. The Tribunal emphasized the separate nature of accounts maintained by the assessee as an individual and his proprietorship concern, Jay Jewellers. It clarified that the capital accounts of the assessee and Jay Jewellers need not be mirror images of each other, as erroneously expected by the Assessing Officer. The Tribunal compared the two accounts and found them to be in order, leading to the explanation of the capital introduction in the books of Jay Jewellers.

Furthermore, the Tribunal addressed the issue of unsecured loans taken by the assessee in his personal capacity, highlighting that no requisition was made regarding the same at the assessment or appellate stage. The Tribunal noted that the addition under section 68 should have been made for the total unsecured loans amount, rather than the specific amount in question. However, since the addition under appeal was for a different amount, which was reasonably explained and admitted by the Assessing Officer, the Tribunal decided to delete the related additions.

In conclusion, the High Court, after hearing arguments from the Revenue's counsel and reviewing the materials on record, found no error of law committed by the Tribunal. The Court determined that the appeal was more focused on factual aspects rather than substantial questions of law, ultimately leading to the dismissal of the appeal.

This comprehensive analysis of the judgment provides a detailed understanding of the issues involved and the Court's decision in each aspect of the case.