2022 (2) TMI 290 - HC - Income Tax

Unexplained cash credit under Section 68 - ITAT deleted the addition - HELD THAT - Discussion made by the Tribunal in the impugned order sustained the order passed by the Commissioner of Income Tax (Appeal) by which a limited relief was granted to the assessee, after noting the factual position, more particularly, the remand report submitted by the assessing officer wherein the assessing officer has accepted the factual position. Therefore, we find there is no question of law, much less substantial question of law, arising out for consideration as suggested in question no. 1. Whether Tribunal has erred in law in interpreting section 68 by holding that credited to the account of M/s V.K. Minerals on 31.03.2007 did not represent cash credit as the said amount was credited on account of transfer entry, but, failed to appreciate that M/s V.K. Minerals is a non existing entity? - HELD THAT - Tribunal has remanded the matter to the assessing officer to decide the same afresh. In fact, the assessee also agreed that the matter may be restored to the file of the assessing officer to decide the issue afresh. Thus, we find the second question also does not arise for consideration. Hence, the appeal fails and is dismissed with the observation that no substantial question of law arises for consideration.

Summary

Issues:
1. Appeal against the order passed by the Income Tax Appellate Tribunal regarding the addition of unexplained cash credit under Section 68 of the Income Tax Act, 1961.
2. Interpretation of Section 68 of the Income Tax Act, 1961 in relation to a credited amount to a non-existing entity.

Analysis:
1. The first substantial question of law raised by the revenue pertained to the deletion of a significant amount as unexplained cash credit under Section 68 of the Income Tax Act, 1961. The Court noted that the Tribunal had upheld the order of the Commissioner of Income Tax (Appeal) after considering the factual position, including the assessing officer's acceptance of the same in the remand report. Consequently, the Court found no substantial question of law arising for consideration, leading to the dismissal of the appeal.

2. The second issue revolved around the interpretation of Section 68 concerning a credit to the account of a non-existing entity. The Tribunal had remanded the matter back to the assessing officer for a fresh decision, a course of action also agreed upon by the assessee. As a result, the Court determined that the second question did not warrant consideration, ultimately resulting in the dismissal of the appeal. The Court emphasized that no substantial question of law emerged for deliberation in this regard.

In conclusion, the Court dismissed the appeal filed by the revenue, emphasizing the absence of substantial questions of law for consideration in both issues raised. Additionally, the stay application was also dismissed in line with the overall decision.