2015 (5) TMI 428 - HC - Income Tax

Assessment under Section 147 r.w.s. 144 - appellant alleged to have been involved in the A.H.D. Scam - non-allowance of the expenditure - Held that - Department has not acted only on the basis of the allegations made in the First Information Report rather the DDI Investigation, Patna has collected details for the purpose, so far as it concerned the Income Tax Department and the materials collected by him, have also formed the basis for the Assessing Officer coming to the conclusions which he has. The Assessing Officer and the Appellate Authorities have taken note of the fact that the expenses which are incidental to supply, such as, purchases on which the business expenses are claimed and other expenses such as, freight, inwards/outwards, loading/unloading charges, godown rent, labour charges, stock insurance etc. which are indicative of a business operation being carried out were not reflected in the accounts of the assessee which would lead to the reasonable conclusion that the assessee was not carrying on any business operation in the nature of supply to the A.H.D. and, accordingly, the story of expenditure has been disbelieved. The aforesaid findings are purely findings of fact which cannot be assailed by the appellant in appeals filed under Section 260A of the Income Tax Act. - Decided against assessee.

Summary

Issues:
Assessment orders under Sections 147/144/154 of the Income Tax Act, Allegations in A.H.D. Scam cases, Non-allowance of expenditure, Findings of fact by Assessing Officer and Appellate Authorities, Challenge under Section 260A of the Income Tax Act.

Analysis:
The judgment pertains to the appellant challenging the order passed by the Income Tax Appellate Tribunal regarding assessment years 1992-1993 and 1993-1994. The appellant, allegedly involved in the A.H.D. Scam, had additions made to their income for the respective years. Despite being issued notices, the appellant did not provide substantial responses or documents, leading to assessments under Sections 147 and 144 of the Act. Appeals before the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal were unsuccessful, prompting the current appeals.

The appellant contended that conclusions were drawn solely based on allegations in the First Information Report without independent investigation. However, the department collected details through DDI Investigation, forming the basis for the Assessing Officer's conclusions. The appellant did not dispute total sales figures but raised concerns about non-allowance of expenditure. The authorities noted that essential business expenses were not reflected in the accounts, casting doubt on the appellant's business operations related to supply to A.H.D., leading to disbelief in the expenditure story.

The court emphasized that the findings regarding expenditure were factual and not challengeable under Section 260A of the Income Tax Act. The appellant failed to demonstrate perversity in the conclusions of the Income Tax Appellate Tribunal based on the evidence on record. Consequently, the court found no substantial question of law in the matter and dismissed the appeals for lacking merit.