2015 (1) TMI 612 - HC - Income Tax

High Court affirms deletion of unexplained cash credit in income for AY 2008-09

Commissioner of Income Tax Coimbatore. Versus Shri. K. Thirumoorthy

The High Court upheld the decision of the Tribunal and Commissioner of Income Tax (Appeals) to delete the addition towards unexplained cash credit in the ... Unexplained cash credit - CIT(A) deleted the addition - Held that:- Commissioner of Income Tax (Appeals) has gone into the individual transaction on merits holding that payments were made through banking transactions and deleted the addition. The Tribunal has also once again verified the same and held in favour of the assessee. Being pure question of fact, which was verified by the Commissioner of Income Tax (Appeals) and again verified by the Tribunal and confirmed the same, we find no question of law much less any substantial question of law arises for consideration in this appeal. - Decided in favour of assessee. Issues:1. Whether the Tribunal was right in confirming the order of the CIT(A) directing the assessing officer to delete the addition made towards unexplained cash creditRs.2. Whether the Tribunal could have concluded that the assessee had made genuine payments to the creditors in the subsequent year based on the available materialRs.Analysis:Issue 1:The appellant, a trader in old bottles, had unexplained credits added to their income for the assessment year 2008-09 by the Assessing Officer. The Commissioner of Income Tax (Appeals) partially allowed the appeal and directed the deletion of the addition to the extent of a specific amount. The Commissioner considered payments made by the appellant to the creditors through NEFT/RTGS as evidence. The Revenue challenged this decision before the Income Tax Appellate Tribunal.Issue 2:The Tribunal reviewed the details of trade creditors provided by the Commissioner of Income Tax (Appeals). It examined individual transactions and payments made by the appellant to specific creditors through banking channels. The Tribunal analyzed each creditor's case separately, considering the evidence of payments made through RTGS transfers. The Tribunal found that in several cases, the appellant had indeed made payments to the creditors in the subsequent year, supporting the genuineness of the credits.The Tribunal confirmed the order of the Commissioner of Income Tax (Appeals) after verifying the details of payments made by the appellant to the creditors. The Tribunal's decision was based on a factual analysis of the evidence presented regarding the payments made through banking channels. The High Court, after hearing the arguments, found no substantial question of law arising from the case. The Court noted that the Commissioner of Income Tax (Appeals) and the Tribunal had thoroughly examined the transactions and confirmed the deletion of the addition based on the evidence of payments provided by the appellant. Consequently, the Court dismissed the Tax Case (Appeal) filed by the Revenue.