Discovering that legal norms have been applied effectively via the Tribunal in valuing the proof and there has been no substantial question that emerges for consideration, the Madhya Pradesh High Court authorized the measure of the Tribunal in removing the additions made u/s 68.
Under section 68 of the Income tax Act where any sum is discovered credited in the book of a taxpayer kept for any former year and the taxpayer proposes no elaboration for the nature and source thereof or the explanation proposed via him is not in the AOs view, satisfactory the sum credited may be levied to the income tax as the taxpayer’s income of that former year.
HC while removing the addition stated that a finding of the fact may raise a substantial question of law, the findings are on the grounds of the proof, and arriving at the stated finding, pertinent to the admissible proof was not regarded or inadmissible proof has been regarded.
The Division Bench of Justice Sushrut Arvind Dharmadhikari and Justice Anuradha Shukla observed that “The Tribunal being a final fact-finding authority, in the absence of demonstrated perversity in its finding, interference with the concurrent findings of the CIT(A) as well as the ITAT therewith by this Court is not warranted”.
Case Facts
The taxpayer individual has filed his return declaring his total income of Rs 3,49,810. At the time of the assessment, the AO remarked that the taxpayer was raising loans from distinct parties.
To analyse those loans the AO u/s 133(6) issued the notices before the creditors, however, did not obtain an answer from 15 creditors. The taxpayer furnished that he had repaid the loans to almost all the creditors before the start of the assessment. The Assessing Officer (AO) doesn’t accept the submission and has made an addition under section 68.
MP High Court’s Observation
It was remarked by the Bench that the impugned case comprised receiving loans from distinct shell companies.
According to Section 105 of the Companies Act, the bench encountered that no person can be a Director of more than 20 companies, though in the current matter distinct shell companies were made and draw the amount.
It was remarked from the bench that the Revenue Department has refuted the fact findings of the ITAT in the grab of substantial questions of law which is not allowed via the regulatory itself.
It was quoted by the Bench that the writ court must abstain from entertaining any plea if there would be no awkwardness in the order passed via the last fact-finding authority i.e., the ITAT.
Given that the ITAT has addressed all the issues raised by the Revenue Department and has issued a thorough and well-reasoned order, considering all available evidence, the Bench declined to accept the Revenue’s opinion.
Concluding that the current matter does not comprise any substantial question of law to attain the provisions of Section 260(A) to consider the plea, the appeal of the revenue in limine has been dismissed by the High Court.
| Case Title | Pr. Commissioner of Income Tax Central VS Mukul Kakar |
| Citation | ITA No. 124 of 2024 |
| Date | 21.08.2024 |
| Counsel For Appellant | Shri Siddharth Sharma |
| Madhya Pradesh High Court | Read Order |
