2015 (8) TMI 509 - HC - Income Tax

Undisclosed income - addition on the basis of dairy found during the search - Tribunal based on the oral and documentary evidence has come to the conclusion that the addition of the amount of the income of the assessee was illegal and upheld the order of the Commissioner of Income-tax (Appeals) with elaborate discussion with reference to the evidence - Held that - The documents seized, i.e., GD-8 to GD-12 are admitted and belongs to Hazarimal Bajaj and not the assessee, therefore, such admission being evidenced has to be controverted by the Revenue on the basis of evidence found during the search. Not doing so, the addition for the name sake cannot be justified. Upon considering the order of the Appellate Tribunal, we do not find that there is any perversity in appreciating the materials on record and in coming to the conclusion. The only possible question, the Revenue could urge that the finding of the Appellate Tribunal is perverse and contrary to the evidence and material on record, however, such question would not arise in the light of the above observations extracted above made by the Tribunal in coming to the conclusion while upholding the order of the Commissioner of Income-tax (Appeals). - Decided against revenue.

Summary

Issues: Assessment of undisclosed income based on seized documents.

Analysis:
The case involved a search conducted at the residence of the respondent, resulting in the discovery of a diary (GD No. 8) containing details of investments in shares by an employee and his family members. The Assessing Officer treated the amount mentioned in the diary as undisclosed income of the assessee. However, the Commissioner of Income-tax (Appeals) overturned this decision, deeming the inclusion of the amount in the assessee's income as illegal. The Department appealed to the Tribunal, which extensively analyzed the evidence and concluded that the addition of the amount to the assessee's income was unjustified. The Tribunal highlighted that the seized documents belonged to the employee and his family members, not the assessee, and there was no concrete evidence linking the investments to the assessee. The Tribunal's decision was based on both oral and documentary evidence, affirming the Commissioner of Income-tax (Appeals) order.

The High Court, after reviewing the Tribunal's decision, found no perversity in the assessment of the materials on record. The Court noted that the Revenue could only challenge the Tribunal's decision if it was deemed perverse or contradictory to the evidence, which was not the case here. The Court concurred with the Tribunal's detailed analysis and upheld the order of the Commissioner of Income-tax (Appeals). Consequently, the appeal was dismissed, affirming that the addition of the amount to the assessee's income was unwarranted based on the available evidence and legal considerations.