2020 (1) TMI 1142 - HC - Income Tax

Addition u/s 68 - HELD THAT - No addition can be made in respect of un-signed, unstamped, Satakhat, which has not been registered and is found from CD of computer of a person who is not connected with the assessee. In view of these facts and circumstances and in law, the addition so made by the AO is without any basis, without any corroborating evidences and without allowing due opportunity of cross-examination to the assessee and is therefore, unsustainable in law. The case laws led by the learned Authorized Representative of the assessee are also supports findings of Ld.ICIT(A). In such circumstances, we do not find any infirmity in the order of CIT(A), accordingly, same is upheld. Accordingly, appeal of Revenue is therefore, dismissed

Issues:
1. Appeal under Section 260A of the Income-tax Act, 1961 against ITAT order for A.Y. 2013-2014.
2. Substantial questions of law proposed by Revenue regarding additions made under sections 68 and 69 of the Act.
3. Tribunal's findings on the case of Shri Rajubhai Zalabhai Bhadidyadara.
4. Absence of appeal by Revenue in the case of Shri Rajubhai Zalabhai Bhadidyadara.
5. Determination of substantial questions of law by the High Court.

Analysis:
1. The Tax Appeal was filed by the Revenue against the order of the Income Tax Appellate Tribunal (ITAT) for the assessment year 2013-2014. The Tribunal upheld the decisions of the Commissioner of Income Tax (Appeals) [CIT(A)] to delete certain additions made under sections 68 and 69 of the Income-tax Act, 1961. The Revenue proposed substantial questions of law challenging these deletions.

2. The proposed questions by the Revenue mainly revolved around the evidentiary value of the agreement to sell and the authenticity of corroborative evidence supporting the additions made under sections 68 and 69 of the Act. The Tribunal's findings in the case of Shri Rajubhai Zalabhai Bhadidyadara emphasized the lack of evidentiary value in certain documents found in a computer hard disk, as they were neither signed, dated, nor stamped. The Tribunal concluded that the additions made by the Assessing Officer lacked basis, corroborating evidence, and opportunity for cross-examination, rendering them unsustainable in law.

3. Notably, the High Court observed that no appeal had been filed by the Revenue specifically in the case of Shri Rajubhai Zalabhai Bhadidyadara. The Court acknowledged the factual nature of the issues raised and determined that none of the questions proposed by the Tribunal could be considered substantial questions of law.

4. Consequently, the High Court dismissed the Tax Appeal, affirming the Tribunal's decision to delete the additions under sections 68 and 69 of the Act. The Court found no merit in the proposed questions by the Revenue and upheld the Tribunal's order. The absence of an appeal by the Revenue in the specific case mentioned further supported the dismissal of the Tax Appeal.

5. In conclusion, the High Court's detailed analysis of the issues raised by the Revenue, particularly regarding the additions made under sections 68 and 69 of the Income-tax Act, resulted in the dismissal of the Tax Appeal. The Court's decision underscored the importance of evidentiary value, corroborative evidence, and legal sustainability in such matters, ultimately upholding the Tribunal's order.

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