2021 (5) TMI 454 - HC - Income Tax

Addition u/s 68 - ITAT deleted the addition - HELD THAT - Tribunal has permitted the assessee to adduce additional evidence along with details of 483 customers pertaining to the advances received along with PAN numbers of 182 customers. The Tribunal has also considered that the developments which have taken post facto institution of the appeal filed in the year 2012 were placed on record by the assessee to show that total 75 customers were stated to be the cases wherein the amount is refunded due to cancellation of plot registration and sale deeds were executed on 31.3.2016 with regard to 21 members who had made advances to the assessee. The Tribunal considering such additional documents on record, remitted the issue back to the Assessing Officer for conducting necessary verification as per law and confirmed the remaining addition wherein the assessee was not able to rebut the findings of the Assessing Officer as confirmed by the CIT(Appeals). Tribunal has therefore, after considering the materials on record, remitted the matter back to the Assessing Officer for verification of the documents produced before the Tribunal so that correct amount liable to tax can be worked out. - Decided against revenue.

Summary

Issues:
Challenge to order under Section 260A of the Income Tax Act, 1961 regarding the disallowance made under Section 68 of the Act for A.Y. 2008-2009.

Analysis:
1. The Revenue challenged the order passed by the Income Tax Appellate Tribunal, Ahmedabad, regarding the disallowance under Section 68 of the Income Tax Act, 1961. The substantial question of law raised was whether the ITAT was correct in deleting a portion of the disallowance made by the Assessing Officer.

2. The assessee filed the return of income declaring total income as NIL, which was later assessed by the AO at a certain amount by making an addition under Section 68 of the Act. The CIT (Appeals) deleted a significant portion of the addition based on the category-wise statement of advances accepted from members with PAN numbers.

3. Both the assessee and the Revenue appealed to the Tribunal. The Tribunal partly allowed the assessee's appeal, remitting the issue back to the Assessing Officer for necessary verification. The Tribunal considered additional documents provided by the assessee, including details of customers and advances received, to prove identity and creditworthiness.

4. The Tribunal found that the assessee had successfully proved the identity of customers and the genuineness of the advances during the lower appellate proceedings. The Revenue's argument for making the entire addition was rejected, as the assessee had discharged its onus of proving the source, identity, and creditworthiness of the credits under Section 68.

5. The Tribunal confirmed a remaining addition amount and remitted the issue back to the Assessing Officer for further verification. The Tribunal considered post-institution developments and additional evidence presented by the assessee, confirming the addition where the assessee failed to rebut the Assessing Officer's findings.

6. The Revenue contended that the Tribunal failed to consider discrepancies in PAN details and the genuineness of advances refunded in subsequent years. However, the Tribunal allowed the assessee to present additional evidence and remitted the matter for verification to determine the correct taxable amount.

7. The High Court upheld the Tribunal's decision, finding no infirmity in the order. The Court concluded that no substantial question of law arose from the order, dismissing the appeal for lack of merit.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive overview of the proceedings and decisions made by the authorities involved.