2015 (4) TMI 636 - HC - Income Tax

Unaccounted sales - ITAT hold that the addition made of 1, 35, 00, 000/- representing sale consideration and sustained by the Commissioner of Income Tax (Appeals) was sustainable in law or on facts? - Held that - Tribunal took note of each of the adverse findings recorded against the appellant. In fact paragraphs 35-37 deal with other amounts and held that the sum of 15, 15, 000/- which was sustained by the CIT (Appeals) was unwarranted. Likewise relief was granted in respect of addition of 20, 00, 000/- by the AO. Having regard to this conspectus of facts the submissions of the assessee in this Court s opinion amount to re-appreciation of circumstances at the third appellate level. Although the interpretation of a document made in certain circumstances require interpretation of law we are clear that in the overall circumstances of the case given the concurrent nature of findings by the three authorities as far as the three amounts in question are concerned at least no such question of law arises. As to whether the interpretation placed upon the document is such as to amount to patent error or not in any case the interpretation given to the two documents in question and the inference drawn on the basis of the statements made are not such as to attract the jurisdiction of the Court which is confined to framing and answering substantial question of law. Since no such substantial question of law arises for consideration the appeal is devoid of merit and is accordingly dismissed.

Summary

Issues:
1. Interpretation of material by Income Tax Appellate Tribunal
2. Addition of undisclosed income based on seized documents
3. Legality of holding cash received as income

Issue 1: Interpretation of material by Income Tax Appellate Tribunal
The assessee challenged the order of the Income Tax Appellate Tribunal (ITAT) regarding the addition of Rs. 1,35,00,000 as sale consideration. The Tribunal upheld this addition based on documents seized during search operations, indicating undisclosed income. The CIT (Appeals) accepted part of the assessee's contentions but sustained additions, including the mentioned sum. The Tribunal analyzed the documents and affirmed the addition, stating that the undisclosed payment was adjusted in investments, leading to increased stock value. The Tribunal concluded that the addition of Rs. 1,35,00,000 was rightly retained by the CIT (Appeals) based on the evidence presented.

Issue 2: Addition of undisclosed income based on seized documents
Another disputed amount was Rs. 49,64,904, representing cash received from a specific sale instance. The CIT (Appeals) confirmed this addition based on documents seized from a residence, indicating undisclosed sales to a party. The Tribunal reviewed the documents and upheld the addition, considering the evidence provided by the Assessing Officer. The Tribunal found the addition of Rs. 49,64,904 sustainable, as supported by the seized material and the observations made during the assessment process.

Issue 3: Legality of holding cash received as income
The Tribunal also addressed the legality of considering cash received as income based on seized documents. It analyzed the documents in detail and found that the seized papers did not clearly indicate cash components or specific sale instances. The Tribunal concluded that the documents did not support the assertion of understated sales consideration, leading to the dismissal of certain grounds raised by the revenue. The Tribunal confirmed the additions of Rs. 1,35,00,000 and Rs. 49,64,904 but deleted another addition of Rs. 15,50,000. Overall, the Tribunal found no substantial question of law arising from the interpretation of the documents and upheld the additions made by the lower authorities. Consequently, the appeal was dismissed for lack of merit at the third appellate level.