2019 (7) TMI 995 - HC - Income Tax

Bogus purchases - genuineness of transactions - HELD THAT - Whether the transactions were bogus or not, cannot be a pure question of fact having regard to the evidence on record. If the two Revenue authorities have recorded concurrent finding with regard to the genuineness of the transactions, we would not like to disturb the same in the present appeal. It is difficult for us to take the view that the findings are based on no evidence or are on misreading of evidence on the basis of which it can be said that the findings are perverse. No substantial question of law as such involved in this appeal.

Summary

Issues:
Appeal against deletion of addition of ?66,76,237 made on account of bogus purchases for the assessment year 2011-12.

Analysis:
The Tax Appeal under Section 260A of the Income Tax Act, 1961 was filed by the Revenue against the order of the Income Tax Appellate Tribunal, Ahmedabad Bench, deleting the addition of ?66,76,237 made on account of bogus purchases for the assessment year 2011-12. The CIT(A) had deleted the addition after considering various factors, including the appellant's business activities, stock register, payment methods, and confirmations from parties involved. The CIT(A) concluded that the appellant had successfully proved the genuineness of the transactions in question, leading to the deletion of the addition.

The Revenue, dissatisfied with the CIT(A)'s decision, appealed before the Appellate Tribunal. The Tribunal, after considering relevant case laws, upheld the CIT(A)'s decision. It emphasized that additions cannot be made solely based on third-party statements without substantial evidence. The Tribunal also noted that no additional documents were submitted during the proceedings that contravened the Income Tax Rule. The Tribunal concurred with the CIT(A)'s findings and concluded that the concurrent findings of the Revenue authorities regarding the genuineness of the transactions should not be disturbed unless based on no evidence or a misreading of evidence.

The High Court, in its judgment, highlighted that the determination of whether the transactions were bogus or genuine is not a pure question of fact and depends on the evidence on record. Since both Revenue authorities had reached concurrent findings on the transactions' genuineness, the Court declined to interfere with the decision in the appeal. The Court found no substantial question of law involved in the case and dismissed the appeal, affirming the deletion of the addition of ?66,76,237 made on account of bogus purchases for the assessment year 2011-12.