2018 (6) TMI 456 - HC - Income Tax

Addition u/s 69A - Seizure of jewellery - ownership of the seized jewellery - Addition on basis of statement made on the date of the seizure - voluminous evidence filed by the respondent during the course of the assessment proceedings has been completely ignored on the ground that the same was not produced when the seizure was made - Held that - There is no requirement in law that evidence in support must be produced only at the time when the seizure has been made and not during the assessment proceedings - evidence led by the respondent during the assessment proceedings establish that the jewellery belonged to his employer - thus the question as proposed does not give rise to any substantial question of law - appeal is dismissed.

Summary

Issues:
1. Challenge to the order of the Income Tax Appellate Tribunal for the block period assessment.
2. Question of law regarding the Tribunal's power to review its own order under Section 254(2) of the Income Tax Act.
3. Justification of upholding the deletion of an addition made by the Assessing Officer under Section 69A of the Act.
4. Allegation of perversity in the Tribunal's order and the ownership of seized jewellery.
5. Interpretation of evidence and legal provisions in the assessment proceedings.

Analysis:
1. The appeal challenged the order of the Income Tax Appellate Tribunal (Tribunal) for the block period assessment from 1st April, 1989 to 16th July, 1999. The High Court found discrepancies regarding the admission of the appeal due to missing records, leading to a reevaluation of the case for admission.

2. Initially, the question of law raised was whether the Tribunal had the power to review its own order under Section 254(2) of the Income Tax Act. However, it was later reframed to address the justification of upholding the deletion of an addition made by the Assessing Officer under Section 69A of the Act. The Tribunal's decision was scrutinized for its legality and correctness.

3. The case revolved around the ownership of jewellery seized from the respondent, who claimed it belonged to his employer. The Commissioner of Income Tax (Appeals) [CIT(A)] deleted the addition under Section 69A based on substantial evidence provided by the respondent, which the Assessing Officer had disregarded as an afterthought. The Tribunal upheld the CIT(A)'s decision, emphasizing the lack of concrete evidence supporting the addition.

4. The appellant alleged perversity in the Tribunal's order, arguing that the respondent's statement under Section 132 of the Act did not clearly establish ownership of the jewellery. However, the High Court noted that the appellant's uncertainty regarding ownership and the evidence presented during assessment proceedings contradicted the claim of perversity.

5. The High Court emphasized that the Tribunal's decision was based on a possible view of the evidence and legal provisions. It highlighted that the respondent's evidence during assessment proceedings, which indicated ownership by his employer, was crucial in determining the case's outcome. The Court concluded that the Tribunal's decision was reasonable and aligned with existing facts and laws, dismissing the appeal.

In conclusion, the High Court upheld the Tribunal's decision, emphasizing the importance of evidence presented during assessment proceedings and the legality of the deletion of the addition under Section 69A of the Income Tax Act.