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2020 (2) TMI 159 - HC - Income TaxUndisclosed purchase - purchases were not properly entered - there was Excess Book Stock as compared to Physical Stock - HELD THAT - As recorded in the books no question of law arises in the present case much less substantial question of law giving rise to the maintainability of the appeal under Section 260A by the Assessee. The admission on the part of the Assessee was the best evidence to be used by the Assessing Authority in the present case. Admittedly during the course of survey the discrepancies in the stocks of gold were found at the business place of the Assessee for which initially though he admitted a difference of 50 lakhs in value but later on during the course of assessment proceedings he seems to have reduced that valuation by the admission letters dated 7 March 2005 and 17 February 2006 to the extent of 42 lakhs. The Tribunal has upheld the admissions only to the extent of 42 lakhs in the present case. We do not find any perversity in the said findings of the learned Tribunal based on the admission of the Assessee himself and therefore we do not find any merit in the appeal filed by the Assessee and the same deserves to be dismissed.
Issues:
1. Appeal under Section 260A of the Income Tax Act against the order of the Income Tax Appellate Tribunal. 2. Addition of ?42 lakhs as undisclosed purchases in the hands of the Appellant. 3. Validity of the Assessee's admission of additional income. 4. Corroboration of the Assessee's admission by other material on record. 5. Interpretation of the real income theory under Section 28 of the Income Tax Act. 6. Assessment based on discrepancies in stock found during survey. Issue 1: The Assessee appealed under Section 260A of the Income Tax Act against the Income Tax Appellate Tribunal's order partially allowing the Revenue's appeal and setting aside the Commissioner of Income Tax Appeals' order for the Assessment year 2003-04. The Tribunal restored the Additions made by the Assessing Authority, specifically adding ?42 lakhs as admitted by the Assessee on account of unproved purchases. Issue 2: The Tribunal justified the addition of ?42 lakhs as undisclosed purchases based on the Assessee's admission after a survey and during the assessment proceedings. The Tribunal emphasized that the Assessee's admission, in the absence of contrary evidence, was significant and could not be overlooked. The Tribunal rejected the Assessee's contention regarding excess book stock and held that the admitted additional income was justified, leading to the modification of the Assessing Officer's order. Issue 3: The Court considered the Assessee's admission of ?42 lakhs on account of unproved purchases as the best evidence for the Assessing Authority. The Assessee, a dealer of jewellery, made the admission during the survey and assessment proceedings. The Court found no perversity in the Tribunal's decision to uphold the admission and dismissed the Assessee's appeal, stating that no substantial question of law arose from the case. Issue 4: The Assessee argued that the admission was not corroborated by any other material on record, challenging the validity of the addition in the declared income. However, the Court upheld the Tribunal's decision, emphasizing the importance of the Assessee's admission as the primary evidence in the case. Issue 5: The Court addressed the interpretation of the real income theory under Section 28 of the Income Tax Act in the context of the Assessee's admission and the discrepancies in stock found during the survey. The Tribunal's decision to add the admitted amount to the Assessee's income was based on the principles of real income theory and the Assessee's own acknowledgment. Issue 6: The assessment was primarily based on discrepancies in the stock of gold found during the survey at the Assessee's business place. The Assessee's initial admission of a difference in value and subsequent reduction by ?42 lakhs during the assessment proceedings played a crucial role in determining the final addition to the income. The Court found no merit in the Assessee's appeal and dismissed it, ruling in favor of the respondent.
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