2019 (8) TMI 657 - HC - Income Tax

Addition u/s 68 - obligation to explain the Source of the source - HELD THAT - ribunal has held that the alleged gift of ₹ 4,00,000/and alleged borrowings of ₹ 1,53,100/from friends and relatives, they see no reasons to deviate from the well reasoned findings of the CIT(A) which have remained uncontroverted and approve the same. However, as regards the claim of ₹ 14,87,543/as accumulated savings and agricultural income, ITAT was of the view that since the assessee was having some agricultural income, an amount of ₹ 5,00,000/can at best be treated as explained. Having gone through the materials on record, more particularly, the findings of fact recorded by the appellate tribunal, we see no good reason to disturb the impugned order. In our view, none of the questions as proposed can be termed as the substantial questions of law.

Summary

Issues:
1. Appeal against order passed by the Income Tax Appellate Tribunal for A.Y 2006-07.
2. Partial relief granted by the Tribunal on addition made by AO.
3. Obligation to explain the "Source of the source."
4. Challenge to the approval u/s.151 of the Income Tax Act.

Analysis:
1. The appellant challenged the order passed by the Income Tax Appellate Tribunal for the assessment year 2006-07. The appellant raised substantial questions of law regarding the partial relief granted by the Tribunal on the addition made by the Assessing Officer. The Tribunal upheld the addition of &8377; 13,26,730 and deleted the addition of &8377; 5,00,000 based on the findings that the appellant failed to provide sufficient explanations for certain credits. The Tribunal found that the lenders confirmed the loans but did not find the explanations regarding alleged gifts and accumulated savings to be satisfactory.

2. The Tribunal considered whether the appellant was under an obligation to explain the "Source of the source." The Tribunal did not find merit in the appellant's argument that they were not obligated to provide such an explanation. The Tribunal's decision was based on the lack of convincing evidence and explanations provided by the appellant regarding the sources of certain funds and credits.

3. The appellant also challenged the approval granted under section 151 of the Income Tax Act. However, the Tribunal did not find it necessary to decide on this ground as it did not impact the final decision regarding the additions made by the Assessing Officer. The Tribunal concluded that none of the questions proposed by the appellant could be considered substantial questions of law based on the facts and findings presented.

4. After considering the arguments presented by the appellant and reviewing the materials on record, the High Court upheld the decision of the Tribunal. The High Court concurred with the Tribunal's findings and reasoning, stating that none of the proposed questions could be categorized as substantial questions of law. Consequently, the appeal was dismissed by the High Court.

This detailed analysis of the judgment provides insights into the issues raised by the appellant, the Tribunal's findings, and the final decision rendered by the High Court.