2012 (12) TMI 1017 - HC - Income Tax

Court affirms Tribunal's deletion of unexplained cash credit in Tax Appeal under Section 68

Commissioner of Income-tax, Gandhinagar Versus Jagatkumar Satishbhai Patel

The Court dismissed the Tax Appeal, upholding the Tribunal's decision to delete the majority of the addition of unexplained cash credit under Section 68 ... - Issues involved: Appeal against the judgment of the Income-tax Appellate Tribunal regarding deletion of addition of unexplained cash credit under Section 68 of the Income-tax Act, 1961.Summary:1. The Revenue appealed against the Tribunal's decision to delete the addition of Rs. 10,09,000 under Section 68 of the Act. The Tribunal found that only Rs. 50,000 was received in the present year, with the balance being an opening balance. Consequently, the Tribunal deleted the balance addition, considering only the Rs. 50,000 for addition under Section 68. 2. The Tribunal reasoned that since the assessee could not properly explain the Rs. 50,000 received in the present year, they deserved the benefit of telescoping against the addition made by the Assessing Officer. The total addition confirmed by the Tribunal was Rs. 1,58,606, while the fresh loan was only Rs. 50,000, leading to the deletion of the Rs. 50,000 addition as well.3. The Tribunal's decision to delete the majority of the addition was based on the fact that only Rs. 50,000 was received in the year under consideration, while the rest was an opening balance in the assessee's account. The Tribunal's view was upheld as no error was found in their reasoning.4. Regarding the deletion of the Rs. 50,000 addition, the Tribunal acknowledged it as unaccounted credit but applied the principle of telescoping to delete the addition since they had independently confirmed a larger addition of Rs. 1.58 lakhs. The Court noted that although the Revenue could appeal against this decision, the relatively small amount did not warrant further consideration.5. The Tax Appeal was ultimately dismissed by the Court.