G K Reddy vs. The Assistant Commissioner Of Income Tax

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TCA/68/2024HC Madras19 August 2024Bench: Honourable Mr Justice R. SURESH KUMAR4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Tax Case Appeal. Regarding the second ground before the ITAT, the assessee claimed a loan of Rs. 25 Lakhs from Sukumar but failed to provide any proof. The ITAT found this ground not feasible to entertain. Similarly, for the third ground, the assessee claimed an expenditure of Rs. 17,37,000/- for levelling the ground, but there was no evidence regarding the source of payment or that the payment was made directly by the assessee. Consequently, the Assessing Officer added this amount as unexplained expenditure under Section 69C. The ITAT also found this ground factually not feasible. The High Court found no substantial question of law in the ITAT's order and therefore dismissed the appeal. The court noted that it is open to the appellant to file a rectification application before the ITAT if any factual error is found in the impugned order.

What were the facts?

The assessee, Shri G.K. Reddy, filed a Tax Case Appeal before the High Court of Judicature at Madras against the order of the Income Tax Appellate Tribunal (ITAT) 'A' Bench, Chennai, dated 28.10.2022. This order pertained to the assessment year 2008-09 and was passed in I.T.A.No.3353/Chny/2019. The appeal before the High Court challenges the ITAT's decision. The ITAT had dismissed the assessee's appeal after the first ground was not pressed. The remaining two grounds concerned a loan of Rs. 25 Lakhs from Sukumar, for which no proof was filed, and an expenditure of Rs. 17,37,000/- for ground levelling, which was added as unexplained expenditure under Section 69C of the Income Tax Act, 1961, due to lack of evidence regarding the source of payment.

What were the issues?

1. Whether the ITAT was justified in dismissing the assessee's appeal concerning the addition of Rs. 25 Lakhs as unexplained income, allegedly received as a loan from Sukumar, when no proof of the loan was provided by the assessee? (Question of fact and law, relating to Section 68 of the Income Tax Act, 1961). 2. Whether the ITAT was justified in upholding the addition of Rs. 17,37,000/- as unexplained expenditure for ground levelling, when the assessee failed to provide evidence of the source of payment or direct payment by the assessee? (Question of fact and law, relating to Section 69C of the Income Tax Act, 1961). Assessee's contentions: The assessee did not press the first ground before the ITAT. For the second ground, the assessee claimed a loan of Rs. 25 Lakhs from Sukumar. For the third ground, the assessee claimed expenditure of Rs. 17,37,000/- for ground levelling. Revenue's contentions: The revenue, through the Assessing Officer, added the Rs. 25 Lakhs as unexplained income and the Rs. 17,37,000/- as unexplained expenditure under Section 69C, as the assessee failed to provide necessary proof and evidence.

Which sections of the Income-tax Act were involved?

Section 260A,Section 68,Section 69C

AI-generated summary — verify with the full judgment below

T.C.A.No.68 of 2024 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 19.08.2024 CORAM THE HONOURABLE MR.JUSTICE R.SURESH KUMAR and THE HONOURABLE MR.JUSTICE C.SARAVANAN T.C.A.No.68 of 2024 Shri G.K.Reddy ... Appellant -Vs- The Assistant Commissioner of Income Tax, Corporate Circle 2(1), Chennai.

... Respondent PRAYER : Tax Case Appeal filed under Section 260 A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal 'A' Bench, Chennai dated 28.10.2022 in I.T.A.No.3353/Chny/2019 for the assessment year 2008-09. For Appellant : Mr.M.Vijayakumar For Respondent : Mr.T.Ravikumar Senior Standing Counsel J U D G M E N T (Judgment of the Court was delivered by R.SURESH KUMAR, J) This tax appeal has been filed against the order passed by the Income Tax Appellate Tribunal 'A' Bench, Chennai for the assessment year 2008-09 in I.T.A.No.3353/Chny/2019 dated 28.10.2022. 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.68 of 2024 2. The three grounds were raised before the Tribunal, out of which, the first ground has not been pressed by the appellant / assessee, that was recorded by the Tribunal in the impugned order itself. Insofar as the second and third grounds which were urged before the Tribunal, the Tribunal has given reasons not to accept the same, because in the second ground, the assessee claimed that he has received a sum of Rs.25 Lakhs as loan from one Sukumar, for which, no proof had been filed. 3. The third ground that was urged by the assessee that, he has spent a sum of Rs.17,37,000/- for levelling the ground of the property concerned, for which also, there had been no evidence with regard to the source of payment as there had been no direct payment made by the assessee, therefore, the Assessing Officer has added the expenditure claimed by the assessee as unexplained expenditure under Section 69C of the Income Tax Act, 1961. 4. Therefore, the two grounds also factually found not feasible to entertain the appeal and accordingly, the appeal was dismissed through the impugned order dated 28.10.2022 by the Income Tax Appellate Tribunal, 'A' Bench, against which, this tax appeal has been filed. We do not find any substantial question of law, hence, we are inclined to dismiss this Tax Case 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.68 of 2024 Appeal and accordingly, it is dismissed. However, it is open to the appellant to agitate the issue by filing a rectification application, if there is any factual error found in the order impugned herein, before the Income Tax Appellate Tribunal, if he is advised to do so. However, there shall be no order as to costs. (R.S.K., J.) (C.S.N., J.) 19.08.2024 NCC : Yes / No Index : Yes / No Speaking Order : Yes / No vji Note: Issue order copy by 20.08.2024. To 1. The Assistant Commissioner of Income Tax, Corporate Circle 2(1), Chennai. 2. The Income Tax Appellate Tribunal 'A' Bench, Chennai. 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.68 of 2024 R.SURESH KUMAR, J. and C.SARAVANAN, J. vji T.C.A.No.68 of 2024 19.08.2024 4/4 https://www.mhc.tn.gov.in/judis

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