2021 (12) TMI 1086 - HC - Income Tax

Reopening of assessment - Addition u/s 68 - Nature of addition made in order u/s 143(3) r.w.s. 147 - ITAT has observed that the transaction recorded in the books of accounts in the regular course of business is to be accepted as true and correct unless there is a strong evidence to rebut the same and the burden of proof that the transaction is not genuine is on the person who alleges so - HELD THAT - No substantial question of law is involved in the instant appeal. ITAT has observed that the transaction recorded in the books of accounts in the regular course of business is to be accepted as true and correct unless there is a strong evidence to rebut the same and the burden of proof that the transaction is not genuine is on the person who alleges so. ITAT has further held that the existence of M/s Swift Tie Up Pvt. Ltd. is not disputed. Without bringing any adverse evidence on record simply on assumptions and presumptions has held that the transactions of the assessee with M/s Swift Tie Up Pvt. Ltd. are bogus. The ITAT has also observed that the determination of income of Rs. 2, 43, 59, 629/- made by the Assessing Officer is hypothetical and there is no basis for the said determination. The ITAT has held that the Assessing Officer has erred in not allowing the loss of Rs. 11, 75, 857/- to the assessee as of NCDEX/MCX loss. It was held that the CIT(A) has rightly allowed the said loss to the assessee in the facts and circumstances of the case. ITAT has further observed that the CIT(A) has rightly deleted the addition of Rs. 75, 00, 000/- to the assessee made under Section 68 as transaction between the assessee and M/s Swift Tie Up Pvt. Ltd. is clearly evident from the documentary evidence produced by the assessee. The ITAT has also upheld the deletion of disallowance donation expenses and disallowance expenses claimed in the P L account by the CIT(A). On a careful scrutiny of the material available on record the findings recorded by the appellate authorities we are of the opinion that in the facts and circumstance of the case the evidence has properly been appreciated by the CIT(A) as well as the ITAT and in the absence of any clinching adverse evidence on record the said finding of facts are not liable to be interfered with. - Decided against revenue.

Summary

Issues:
- Assessment order challenged by Revenue before CIT(A) and ITAT
- Deletion of additions made by Assessing Officer
- Allegations of incorrect findings by appellate authorities
- Disallowance of losses and expenses

Analysis:
The appeal was filed by the Revenue against the order passed by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal. The original return filed by the assessee for the assessment year 2012-13 was accepted under Section 143(1) of the Income Tax Act, but later a notice under Section 148 was issued, leading to additions by the Assessing Officer totaling &8377; 3,30,71,810. The CIT(A) deleted most of these additions, prompting the Revenue to appeal before the ITAT.

The Revenue contended that the appellate authorities did not examine the matter objectively, leading to contradictory findings. They argued for the correctness of the additions made by the Assessing Officer, including treating business transactions as bogus, unexplained cash receipts, and disallowance of losses. The Revenue raised substantial questions of law challenging the appellate orders.

However, after considering the arguments and reviewing the orders, the High Court found no substantial question of law involved in the appeal. The ITAT observed that transactions recorded in the books of accounts should be accepted as genuine unless strong evidence suggests otherwise. The ITAT also noted that the Assessing Officer's determinations lacked a basis and erred in disallowing certain losses and expenses.

The High Court upheld the decisions of the appellate authorities, stating that the evidence was properly evaluated, and no adverse evidence was presented to challenge the findings. As no substantial legal issues were identified, and the decisions were based on factual assessments, the High Court dismissed the appeal, finding it devoid of merit.

In conclusion, the High Court affirmed the decisions of the lower authorities, emphasizing the importance of evidence evaluation and lack of substantial legal questions, leading to the dismissal of the Revenue's appeal.