2022 (11) TMI 781 - HC - Income Tax

Addition on account of difference in receipts as per the Assessee s bank account when compared with the books of accounts maintained by the Assessee - ITAT concurring with the CIT(A) that the AO had failed to verify the evidence produced before him and for not providing adequate opportunity for hearing to the Assessee - As per CIT AO failed to make any sincere effort regarding the aforesaid addition and the same was made only on the basis of doubt, suspicion, conjecture or surmises without affording proper opportunity of being heard to the Assessee - Substantial question of law - HELD THAT - ITAT and CIT (A), both fact finding authorities have concurrently held that there is no merit in the ground raised with respect to the addition on account of the income declared by the Assessee and the receipts as per the books of account of the Assessee. CIT(A) in its order has set out the information and explanation furnished by the Assessee explaining each of the entries to substantiate its contention that the said amount is not exigible to tax. The CIT(A) has noted that the documentary evidence in support of the said explanation furnished by the Assessee was available on record. ITAT while concurring with the aforesaid finding has held that the Revenue has failed to controvert the said finding of the CIT(A). There is no substantial question of law raised in the present appeal. The Supreme Court in the case of Ram Kumar Aggarwal Anr. vs. Thawar Das (through LRs), 1999 (8) TMI 1008 - SUPREME COURT has reiterated that under Section 100 of CPC, the jurisdiction of the High Court to interfere with the orders passed by the Courts below is confined to hearing on substantial question of law and interference with finding of the fact is not warranted if it involves re-appreciation of evidence.Appellant has not placed any material on record to contradict the aforesaid concurrent finding of facts returned by the ITAT and CIT(A). - Decided against revenue.

Summary

Issues:
1. Challenge to the order of the Income Tax Appellate Tribunal (ITAT) by Revenue.
2. Addition of Rs. 10,20,64,174 made by the Assessing Officer (AO) and deleted by the Commissioner of Income Tax (Appeals) [CIT(A)].
3. Failure of the AO to verify evidence and provide adequate hearing to the Assessee.
4. Sustainment of the addition by the CIT(A) based on documentary evidence.
5. Concurring findings of the ITAT and CIT(A) regarding the addition.

Issue 1: Challenge to ITAT Order
The High Court heard the appeal filed by Revenue challenging the ITAT's order dated 27th April, 2022, regarding the Assessment Year 2011-12. The Revenue contended that the ITAT erred in upholding the CIT(A)'s decision to delete the addition of Rs. 10,20,64,174 made by the AO.

Issue 2: Addition of Rs. 10,20,64,174
The AO made an addition to the Assessee's income based on the difference in receipts as per the Assessee's bank account compared to the books of accounts. The CIT(A) deleted this addition, citing documentary evidence already on record to substantiate the difference. The CIT(A) criticized the AO for not making sincere efforts in verifying the addition and for not providing proper opportunity to the Assessee.

Issue 3: Failure of AO
The CIT(A) found the addition by the AO unsustainable due to lack of effort in verification and violation of natural justice principles. The AO's reliance on doubt, suspicion, and conjecture without proper hearing was deemed inappropriate.

Issue 4: Sustainment of Addition by CIT(A)
The CIT(A) allowed the Assessee's appeal, emphasizing the documentary evidence supporting the explanation provided by the Assessee for the difference in receipts. The ITAT concurred with the CIT(A)'s findings, noting the Revenue's failure to challenge the CIT(A)'s conclusions.

Issue 5: Concurring Findings
Both the ITAT and CIT(A) arrived at concurrent findings after reviewing the evidence, expressing satisfaction with the Assessee's explanation for the discrepancy in receipts. The High Court, considering the concurrent factual findings, dismissed the appeal, citing the limited scope of interference on substantial questions of law.

In conclusion, the High Court dismissed the appeal by Revenue as no substantial question of law was raised, and there was no material provided to contradict the concurrent factual findings of the ITAT and CIT(A). The judgment highlighted the importance of documentary evidence, proper verification procedures by the AO, and adherence to natural justice principles in tax assessments.