2011 (5) TMI 951 - HC - Income Tax

Tribunal dismisses appeal, upholds Assessing Officer's decision on surrendered amount, denies setting off against trading results.

The Tribunal upheld the Assessing Officer's decision regarding the surrendered amount of Rs. 43 lacs, rejecting the plea of the assessee. The Tribunal ... - Issues involved: Appeal u/s 260A of the Income Tax Act, 1961 against ITAT order for assessment year 2005-06.Summary:1. Issue A: The appeal challenged the double addition of surrendered amount of Rs. 43 lacs in profit and loss account, contending it was against established legal principles. The assessee's gross profit rate and net profit were disputed by the Assessing Officer, leading to the addition. Penalty proceedings were initiated separately. The CIT(A) upheld the order with a reduced addition. The Tribunal partly allowed the appeal, leading to the current appeal. 2. Issue B: The ITAT's rejection of the audited books of accounts u/s 145(1) without specifying defects was contested. The surrender of Rs. 43 lacs was done to avoid litigation, but the authorities made additions disregarding the surrender conditions. The plea to accept the surrender in toto was rejected by the authorities. 3. Issue C: The order of ITAT was challenged as devoid of merit appreciation, alleged to be bad in law and perverse. The assessee claimed the findings were unjustified and sought the order to be set aside.The Tribunal upheld the Assessing Officer's decision regarding the surrendered amount of Rs. 43 lacs, rejecting the plea of the assessee. The surrendered amount was on specific discrepancies unrelated to manufacturing activity. The Tribunal affirmed the CIT(A)'s decision on the addition, finding no justification for setting off the surrendered income against trading results. The judgments cited did not support the assessee's case due to differing factual situations. Ultimately, no substantial question of law was found, leading to the dismissal of the appeal.