2022 (2) TMI 929 - HC - Income Tax

Voluntary disclosures - Amount disclosed by the assessee in the return of income filed pursuant to notice under Section 158BC(a)(ii) - ITAT deleted the addition - HELD THAT - This issue was not raised before the (Appeals)-VI, Kolkata when the assessee challenged the order of assessment dated 28th March, 2001 - assessee was on an appeal before the tribunal on the said issue. The tribunal considered the contentions of either side and set aside the finding of the assessing officer with regard to the addition of ₹ 7.10 crores and restored the matter back to the assessing officer to examine the seized materials and re-compute the income of the assessee for the block period. The learned counsel for the respondent/assessee submits that the order passed by the tribunal has been given effect to and the assessing officer has passed an order which is adverse to the interest of the assessee and the assessee is pursuing further remedies against the said order. Thus, in our considered view, there is no substantial question of law. Additions made towards contribution of share capital by the assessee to 117 companies - ITAT deleted the addition - HELD THAT - Tribunal has re-appreciated the facts which were available on record while affirming the order passed by the CIT(A). In fact, it has rendered a finding that the assessing officer without bringing any evidence to show that the companies which are legal entities and assessed to tax every year have not disclosed the paid-up or less paid-up capital, the amount of paid-up capital which have been disclosed in its balance-sheet every year. There are other findings of fact as well. Thus, we find that there is no substantial question of law arising on the said issue. Unexplained cash deposits - ITAT deleted the addition - HELD THAT - After analysing the facts, the tribunal concluded that addition made by the assessing officer is not on the basis of evidence or material to even remotely suggest that the cash deposited in bank accounts belongs to the assessee and the addition was totally contrary to the findings recorded at various places in the assessment order and accordingly deleted the addition. Here also we find that a thorough investigation of the factual position has been done by the tribunal while granting relief to the assessee and we do not find any substantial question of law arising for consideration on the said issue. Addition towards income out of shares dealing for assessment year 1992-93 which was confirmed by CIT(A) and which was in fact stated by the assessee himself as his income during recording of his statement - ITAT deleted the addition - HELD THAT - AO himself has rendered a finding that the assessee is not a man of means and he has also accepted that he has engaged only in the name lending and providing accommodation entries for a small commission. Further, factual analysis have also been made and it has been held that addition based on statement alone which has been recorded when the assessee was mentally disturbed cannot be sustained. In this regard it will be beneficial to note the circular issued by the CBDT dated 10th March, 2003 wherein the Board has stated that confession during the course of search, seizure and survey operations did not serve any useful purpose and the assessing officers were advised that there should focus and concentrate on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income Tax Department. Further, it has been mentioned that while recording statement during the course of search and seizure operation, no attempt should be made to obtain confession as to the undisclosed income. Thus, we are of the clear view that no question of law as suggested in substantial question of law (d) arises

Summary

Issues:
1. Deletion of voluntarily disclosed amount by assessee.
2. Deletion of addition of share capital contribution by assessee to companies.
3. Deletion of cash deposits in bank accounts of benamdar.
4. Deletion of income out of shares dealing.
5. Deletion of returned income under Section 158BC(a)(ii) of the Income Tax Act.

Deletion of Voluntarily Disclosed Amount:
The appeal raised questions regarding the deletion of an amount of ?7.10 crores disclosed by the assessee. The Tribunal set aside the assessing officer's finding and directed a re-computation of income. The tribunal's decision was challenged, but the Court found no substantial question of law and rejected the appeal.

Deletion of Share Capital Contribution:
The issue of deletion of addition of share capital contribution by the assessee to 117 companies was discussed. The tribunal affirmed the CIT(A)'s order, stating that the assessing officer failed to provide evidence regarding the companies' paid-up capital. The Court found no substantial question of law and rejected the appeal.

Deletion of Cash Deposits:
Regarding the deletion of cash deposits in bank accounts, the tribunal concluded that the assessing officer's addition lacked evidence linking the cash to the assessee. The tribunal's detailed analysis led to the deletion of the addition. The Court found no substantial question of law on this issue.

Deletion of Income from Shares Dealing:
The tribunal reevaluated the addition of ?10 crores towards income from shares dealing. It found that the assessing officer's conclusion, based on a statement made under mental distress, was not sustainable. The Court referred to a CBDT circular emphasizing the importance of evidence collection over confessions during search operations. No substantial question of law was found on this issue.

Returned Income under Section 158BC(a)(ii):
The Court dismissed the appeal as no substantial question of law arose for consideration in the case. The connected application for stay was also dismissed. The judgment was delivered by Justice T. S. Sivagnanam, with agreement from Justice Hiranmay Bhattacharyya.