C I T vs. SATISH KUMAR

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ITA/332/2008HC Punjab & HaryanaPHHC01080313200828 November 2008Author: MR. JUSTICE L.N. MITTAL,MR. JUSTICE ADARSH KUMAR GOEL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose for consideration. The Court noted that the CIT(A) and the Tribunal had both recorded findings that the creditors had explained the source of their deposits in the bank accounts, and therefore, the credit entries could not be held to be doubtful. The Tribunal had specifically observed that the persons (creditors) were produced before the AO, proving their identity, and that they had sufficiently explained the sources of their deposits in their bank accounts. The transactions were through bank accounts, and none of the depositors were related to the assessee. The Tribunal also noted that the department had accepted the CIT(A)'s finding for the assessment year 2001-02, which strengthened the conclusion for the current year. Consequently, the appeal was dismissed.

What were the facts?

The Revenue, represented by the Commissioner of Income-tax, Karnal, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had upheld the order of the Commissioner of Income-tax (Appeals) [CIT(A)] which deleted an addition of Rs. 10,50,000/- made by the Assessing Officer (AO). The AO had treated this amount as unexplained income under Section 68 of the Act. The assessment year in question was 2000-2001. The CIT(A) had found the credit entries to be genuine after the creditors were produced before the AO and their sources of deposit in bank accounts were explained. The ITAT noted that the department had accepted the CIT(A)'s finding for a subsequent assessment year (2001-02) concerning the same creditors.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the ITAT was right in law in upholding the order of the CIT(A) deleting the addition of Rs. 10,50,000/- made by the AO under Section 68 of the Income-tax Act, 1961? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue argued that the ITAT was wrong in upholding the CIT(A)'s deletion of the addition. The Revenue's appeal was based on the substantial question of law framed above. The judgment notes that the CIT(A)'s order for the subsequent year, referred to by the Tribunal, was in respect of interest, and the Revenue's counsel submitted that the issue of interest in respect of the same creditors would not stand on a different footing.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 68

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Case No. : I. T. A. No. 332 of 2008 Date of Decision : November 28, 2008. The Commissioner of Income-tax, Karnal .... Appellant Vs.

Sh. Satish Kumar Prop. M/s Shiv Shakti Timber Store, Imambara, Karnal .... Respondent CORAM : HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE L. N. MITTAL * * * Present : Mr. Sanjeev Kaushik, Standing Counsel for the Revenue. * * * ADARSH KUMAR GOEL, J. (Oral) :

1.

The Revenue has preferred this appeal under Section 260-A of the Income Tax Act, 1961 (for short, the Act) against the order of the Income Tax Appellate Tribunal, Delhi Bench `A', New Delhi in ITA No.1975/Del/2004 for the Assessment Year 2000-2001, proposing to raise following substantial question of law :- “Whether on the facts and in the circumstances of the case, the Ld. I.T.A.T. was right in law in upholding the order of the CIT (A), deleting the addition of Rs.10,50,000/- made by the A.O. u/s 68 of the Income-tax Act, 1961 ?”

2.

The Assessing Officer made addition to the declared amount of the assessee by Rs.10,50,000/- treating the amount of cash credit to be an unexplained income. The CIT (A) reversed the finding of the Assessing Officer and held that there was no ground for the addition and there was nothing to doubt the genuineness of credit entries. The Tribunal upheld the said finding and observed :- “After hearing the submissions we are of the view that while deciding the appeal to assessment year 2001-02, the CIT (A) has considered the relevant assessment record and submissions of the appellant. He has held that since the persons were produced before the Assessing Officer which prove the identity. He has also observed that these creditors have also sufficiently explained the sources regarding the deposit in their bank account the transactions were from the bank account none of the depositors were remotely related to the appellant and he held that the credit worthiness and genuineness of transactions stands proved beyond reasonable doubt. The department has accepted this finding of the CIT(A) and has not filed an appeal against the order. In such a situation we have no alternate but to confirm the order of the CIT (A) in this year also.”

3.

We have heard learned counsel for the Revenue and perused the record.

4.

It was submitted that the order of the CIT (A) for the assessment of the subsequent year, which has been referred to by the Tribunal was in respect of interest.

5.

Even though the issue of interest in respect of same creditor will not stand on different footing, the CIT (A) as well as the Tribunal have recorded a finding that creditors explained the source regarding their deposits in the bank and the entries could not be held to be doubtful.

6.

In view of above, no substantial question of law arises for consideration.

7.

The appeal is accordingly dismissed.

(ADARSH KUMAR GOEL) JUDGE November 28, 2008

( L. N. MITTAL ) monika JUDGE

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