2014 (1) TMI 1540 - HC - Income Tax

Undisclosed income - Held that - The cash was duly reflected in cash book, which was found in Computer hard disc seized by ADIT(Investigation) - The CIT(Appeals) accepted the submission of the representative of the Assessee - When the CIT(Appeals) was satisfied on such factual aspect and the ITAT has also upheld the order of the CIT(Appeals) - There is no substantial question of law before court - Decided against Revenue.

Summary

Issues:
Appeal against ITAT order upholding CIT(A) decision on various additions made by AO, Deletion of addition on account of suppression of gross profit, unexplained unsecured loans, excess stock, deficit stock, unexplained cash found during search.

Analysis:
1. The Tax Appeal was filed by the Revenue against the ITAT's decision upholding the CIT(A)'s order. The assessee, a partnership firm dealing in gold and silver jewellery, faced additions to income during assessment due to various reasons like suppression of gross profit, unexplained unsecured loans, excess stock of gold jewellery, deficit in silver and stone stock, and unexplained cash found during a search under Section 132 of the Income Tax Act.

2. The CIT(A) allowed the appeal of the assessee and deleted all the additions. The Revenue then appealed to the ITAT, which upheld the CIT(A)'s decision. The Revenue further challenged the ITAT's order, raising substantial questions of law regarding the deletions made by the CIT(A).

3. The Revenue argued that the deletion of the addition of unexplained cash found during the search was not properly considered. The Revenue contended that the CIT(A) should have remanded the matter to the Assessing Officer for verification. The Revenue claimed that the ITAT did not adequately address the issues raised, leading to a flawed decision.

4. The counsel for the assessee pointed out that the cash found during the search was duly reflected in the cash book, as confirmed by the CIT(A) and accepted by the ITAT. It was emphasized that this was a factual matter, and no substantial question of law was involved in this specific deletion of addition.

5. The High Court, after considering the arguments from both sides and reviewing the evidence, concluded that the addition of cash found at the business premises, and whether it was reflected in the cash book, was a question of fact. Since the CIT(A) and ITAT had already examined and upheld the decision based on factual submissions, the Court found no substantial question of law in the deletion of this particular addition.

6. Consequently, as no substantial question of law was identified in the appeal related to the addition of unexplained cash, the High Court dismissed the Tax Appeal filed by the Revenue, affirming the decision of the lower authorities.