2023 (10) TMI 710 - HC - Income Tax

Block assessment - Undisclosed income - unaccounted expenses towards medical expenses, purchase of jewellery and other purchases assessed by the A.O.- Addition on the basis of statement of appellant - retraction of statement after a sufficient long gap - ITAT CIT(A) confirmed part addition - HELD THAT - As we find that there is no dispute that the assessee has contended that the loose papers do not belong to him, therefore, the quantum of expenditure noted therein be not taken cognizance thereof inasmuch as, the medical expenses incurred on his daughter s delivery were met by her husband and father in law and not by the assessee. The revenue has placed no material on record to show that the loose papers are in the hand-writing of the assessee or the notings made therein are belonging to the assessee. There is no corroborative material on record to prove that the expenditure recorded in the said loose papers is incurred by the assessee. The AO has not recorded any statement of the assessee s daughter or her husband or her father-in-law Perusal of the order of CIT(A) as well as Appellate Tribunal, shows that the contentions raised by the appellant have been considered and detailed reasons have also been recorded by the Appellate Tribunal while passing order. Appellate Tribunal had considered the grounds raised as well as submissions made on behalf of the appellant and recorded the detailed reasons for its conclusion. Question of law on which the present appeal is filed is factual in nature and finding of facts, which was already considered by the Appellate Tribunal. Therefore, we do not find any reason to interfere with the order passed by the Appellate Tribunal. The Appeal thus fails and deserves to be and is accordingly dismissed.

Summary

Issues Involved:
The judgment involves an appeal under Section 260-A of the Income Tax Act, 1961, challenging the order of the Income Tax Appellate Tribunal regarding undisclosed income and expenses for a block period.

Facts Leading to the Appeal:
The appellant, a Managing Partner of a partnership firm, was found to have undisclosed expenses during a search operation, including on jewellery and household expenses. The appellant admitted to undisclosed income for personal and functional expenses but did not fully reflect it in the accounts.

Assessment and Appeals:
After issuance of notices and responses, the Assessing Officer added undisclosed income to the appellant's account. The Commissioner of Income Tax (Appeals) partially upheld the addition of undisclosed expenses. The appellant then appealed to the Income Tax Appellate Tribunal.

Arguments Before the Tribunal:
The appellant argued that a retracted statement should be considered, referencing relevant legal decisions. The respondent contended that a retraction loses significance over time, citing a Supreme Court decision.

Consideration by the Tribunal:
The Tribunal considered the grounds raised by the appellant, reducing the total addition of undisclosed income and expenses. It found that certain expenses were not sustainable due to lack of corroborative evidence.

Conclusion of the Tribunal:
The Tribunal concluded that the factual findings had been adequately considered and dismissed the appeal. No interference was deemed necessary, and the appeal was dismissed without costs.

This judgment highlights the assessment of undisclosed income and expenses, the consideration of retracted statements, and the importance of corroborative evidence in tax matters. The Tribunal's decision was based on a thorough review of facts and legal arguments presented during the appeal process.