High Court affirms deletion of ITAT addition under Section 68 of Income Tax Act

The High Court dismissed the appeal against the ITAT order deleting the addition under Section 68 of the Income Tax Act. The Court found that the AO's suspicion lacked concrete evidence to prove that the share application money was unaccounted for. The CIT(A) decision, upheld by the ITAT, was based on verifiable banking transactions, indicating no unaccounted cash dealings. The Court concluded that no substantial legal question arose, affirming the deletion of the addition and rejecting the appeal.

---

---

Issues:
Appeal against ITAT order deleting addition under Section 68 of the Income Tax Act, 1961.

Analysis:
The appeal was filed against the ITAT order that dismissed the Revenue's appeal against the CIT(A) order deleting the addition of Rs. 75,00,000 made by the AO under Section 68 of the Income Tax Act, 1961. The AO had added the amount as the share application money received by the assessee company, suspecting it to be unaccounted money. The AO's decision was based on the statements of a third party, Shri Aseem Kumar Gupta, recorded behind the back of the company.

The CIT(A) allowed the appeal by the assessee, noting that the investment and refund of the share application money were made through regular banking channels and were verifiable from the appellant company's bank accounts. The CIT(A) found no evidence to prove that the money received was unaccounted for or that any cash transactions occurred between the assessee company and the share applicant company. Consequently, the addition made by the AO was ordered to be deleted.

The ITAT upheld the CIT(A)'s decision, stating that the AO's addition was based on suspicion and lacked concrete evidence to prove that the share application money was unaccounted for. The ITAT found the CIT(A)'s decision to be factual and not capricious or perverse. Therefore, the High Court concluded that no substantial question of law arose for consideration in the appeal and dismissed it.

In summary, the High Court held that the addition made by the AO was not sustainable in the eyes of the law as there was no concrete evidence to establish that the share application money was unaccounted for. The decision of the CIT(A), affirmed by the ITAT, was found to be based on facts and not erroneous. Consequently, the appeal against the ITAT order deleting the addition under Section 68 of the Income Tax Act was dismissed.

---