2021 (7) TMI 353 - HC - Income Tax

Substantial question of law - Scope of Section 260A - Excess consumption of raw material - CIT (Appeals) and the ITAT have recorded the concurrent findings by observing that AO had wrongly added on account of excess consumption of raw material and there was no justification given by the AO for rejecting the Books of Accounts of the respondent Assessee - HELD THAT - As there are concurrent findings recorded by both the authorities, the Court is not inclined to interfere with the same, more particularly when the learned Sr. Standing Counsel Mr.Patel for the appellant has failed to point out any question of law, much less substantial question of law being involved in the present appeal. See M. Janardhana Rao 2005 (1) TMI 14 - SUPREME COURT

Summary

Issues:
Appeal under Section 260A of the Income Tax Act, 1961 regarding addition made on account of excess consumption of raw material and rejection of Books of Accounts by the Assessing Officer.

Analysis:
1. The appeal was filed by the Principal Commissioner of Income Tax challenging the order passed by the Income Tax Appellate Tribunal (ITAT) in a case related to the Assessment Year 1999-2000. The respondent Assessee had filed an appeal before the CIT (Appeals) Vadodara, which was partly allowed. The present appeal was filed by the appellant against the ITAT's order dismissing the appeal.

2. The substantial questions of law framed by the appellant were related to the addition made by the Assessing Officer on account of excess consumption of raw material and the rejection of Books of Accounts of the Assessee. The appellant argued that the ITAT erred in not upholding the addition made by the Assessing Officer and wrongly relied on a previous order without considering the low tax effect.

3. The Court examined the submissions made by the appellant and found no merit in them based on the orders passed by the ITAT and the CIT (Appeals). The CIT (Appeals) had observed that the Assessing Officer had not pointed out any defects in the Books of Accounts of the Assessee and had allowed the appeal. The ITAT also dismissed the appeal of the Revenue based on similar findings.

4. The Court noted that there were concurrent findings by both authorities that the addition made on account of excess consumption of raw material was unjustified, and there was no justification for rejecting the Books of Accounts. The Court cited the Supreme Court's observations on the scope of Section 260A of the Income Tax Act, emphasizing the need for a substantial question of law to be involved in such appeals.

5. As the appellant failed to point out any substantial question of law, the Court declined to interfere with the concurrent findings of the authorities. The appeal was dismissed as devoid of merit based on the established legal principles and the specific facts of the case.