2024 (2) TMI 702 - HC - Income Tax

Addition u/s 68 - non providing the source and proof of old jewellery sold by the depositor - ITAT deleted addition - HELD THAT - Other than the suspicion raised by the assessing officer as to the genuineness of the transaction, no credible/ tangible material was brought on record by the assessing authority as may have led to any satisfaction or finding that the transaction was not genuine. The assessee not only disclosed the name of the jeweller s to whom the jewellery was sold by the creditors of the assessee but it also established the mode of payment through banking channel. No doubt was raised by the assessing authority as to the genuineness on these critical aspects. Thus, no inquiry, whatsoever was made from the jeweller, from where it purchased jewellery,. Once the money was thus made available to the creditors of the assessee, they had the source available to make the deposit with the assessee. Existence of such deposit is also not in dispute. Thus the finding recorded by the Tribunal are findings of fact, based on the evidence and material on record. Decided against revenue.

Summary

Issues:
The judgment involves an appeal under Section 260-A of the Income Tax Act, 1961 regarding the addition made under Section 68 of the Income Tax Act.

Issue 1: Addition under Section 68 of the Income Tax Act
The Tribunal dismissed the revenue's appeal and confirmed the first appellate authority's order, deleting the addition of Rs. 3,48,00,852. The appeal questioned the Tribunal's decision, arguing that the assessing officer did not make sufficient inquiries to establish any suspicion regarding the transaction's genuineness, despite opportunities given to the assessee to provide necessary proofs.

Issue 2: Inquiry and Consideration of Material
The appeal also contended that the Tribunal erred in deleting the addition without appreciating that the assessing officer had considered all available material, including submissions and statements of the assessee and related parties. The Tribunal noted evidence supporting the sale of jewellery, including purchase invoices, cheques for sale consideration, and bank account credits, but highlighted the lack of inquiry by the assessing officer from the jeweller or other sources to confirm suspicions.

The Tribunal's findings were based on the evidence and material on record, concluding that no substantial question of law arose. The Tribunal emphasized that the assessee disclosed details of the jeweller and established the payment mode through banking channels, with no doubts raised about the transaction's genuineness on critical aspects. The Tribunal found that the assessing authority failed to inquire from the jeweller from whom jewellery was purchased, leading to the conclusion that the transaction was genuine and the source of the deposit with the assessee was available.

The Tribunal's decision was based on factual findings and evidence, determining that no substantial question of law was raised. Consequently, the appeal lacked merit and was dismissed, with no costs awarded.