2015 (4) TMI 827 - HC - Income Tax

Unexplained investment in unaccounted purchases and unexplained cash credits introduced to make investment in unaccounted purchases - ITAT allowing the appeal against the order of the CIT (Appeals) who set aside the addition made by the A.O. - Held that - the balances of two creditors were on the higher side to the tune of ₹ 10 lacs in the balance sheet. The appellant admitted that the figures furnished to the bank were manipulated. The appellant admittedly obtained two sets of accounts which were at a variance. Both the statements of account were audited and signed by the same auditors on the same day. The two sets of accounts were signed by the same partners. No additions were made under Section 68 of the Income Tax Act, 1961 on account of the credits of ₹ 10 lacs. The CIT (Appeals) held that there was no material to show that the appellant made purchases of ₹ 26 lacs outside the books of accounts. In view of these facts, the Tribunal took a different view. The Tribunal also noted that there were also other variances in the two statements of account. It was for the appellant to establish which of the statements were correct. The appellant failed to discharge the onus. - Decided against assessee.

Summary

Issues:
1. Application for exemption.
2. Application for condonation of delay in re-filing.
3. Appeal against the order of the Income Tax Appellate Tribunal.

Application for Exemption:
The application for exemption was allowed subject to all just exceptions.

Application for Condonation of Delay in Re-filing:
An application was made for condoning a 23-day delay in re-filing the appeal, which was granted based on the reasons mentioned in the application.

Appeal against the Order of the Income Tax Appellate Tribunal:
The appeal challenged the order of the Income Tax Appellate Tribunal dated 24.11.2011, which had allowed the appeal against the order of the CIT (Appeals) regarding the addition of Rs. 26 lacs on account of unexplained investment in unaccounted purchases and cash credits. The High Court noted serious discrepancies between statements filed before tax authorities and the appellant's bank, showing purchases, sales, and closing stock figures. The appellant admitted to filing incorrect statements before the bank to avail larger financial facilities. Despite discrepancies, the Tribunal concluded that the assessment order adding the amount was correct based on detailed evidence. The High Court found no substantial question of law, emphasizing that the case involved the appreciation of evidence rather than a legal issue. As the appellant failed to establish the correctness of the statements, the appeal was dismissed.

This comprehensive summary covers the issues involved in the legal judgment, detailing the applications made, the grounds for granting them, and the analysis of the appeal against the Income Tax Appellate Tribunal's order.