2017 (1) TMI 241 - HC - Wealth-tax

High Court affirms Tribunal's decision on undisclosed credit balance, dismisses department's appeal

The High Court upheld the Tribunal's decision to delete additions made by the Assessing Officer in the net wealth of the assessee based on undisclosed ... Additions made in the net wealth of the assessee on account of undisclosed credit balance in the books of the firm M/s Salas S.A. Of Geneva and on the basis of information supplied by Mr. John Ashlyn of M/s Salas S.A. Geneva - ITAT deleted the addition - Held that:- Additions were made in income-tax assessments as well as wealth-tax assessments of some connected assessees of this group on the basis of the statement of Mr. John Ashlyn. Several orders have been passed by the Tribunal in such cases deleting the additions so made. It is found that the ld. Commissioner of Income-tax (Appeals) also overturned the action of the Assessing Officer on the basis of the Tribunal order in assessee's own case. In view of these facts, we are satisfied that the decision of the first appellate authority, being based on the Tribunal's orders, does not warrant any interference. Respectfully following the precedents, we uphold the impugned orders as announced in the open court. Issues:Challenge to Tribunal's judgment on additions made by Assessing Officer in net wealth, Setting aside of specific addition amount, Perversity of ITAT's findingAnalysis:1. Challenge to Tribunal's judgment on additions made by Assessing Officer in net wealth:The department challenged the Tribunal's decision to dismiss the appeals regarding the additions made by the Assessing Officer in the net wealth of the assessee. The High Court framed substantial questions of law related to the deletion of these additions based on undisclosed credit balance in the books of the firm M/s Salas S.A. of Geneva and information provided by Mr. John Ashlyn of M/s Salas S.A. Geneva. The Tribunal observed that the original assessment order was set aside by the first appellate authority, directing the Assessing Officer to decide the matter afresh. The Tribunal noted that the additions were made based on undisclosed credit balance and Mr. John Ashlyn's statement. The Commissioner of Income-tax (Appeals) reversed the Assessing Officer's orders in line with the Tribunal's decision. The Tribunal's decision to delete the additions made in income-tax and wealth-tax assessments was upheld based on previous precedents and findings.2. Setting aside of specific addition amount:The Tribunal also set aside a specific addition amounting to Rs. 1,41,40,300/-. The Tribunal's decision was based on considering the relevant material on record and the fact that similar orders deleting such additions had been passed in connected cases of the group. The Commissioner of Income-tax (Appeals) overturned the Assessing Officer's action based on the Tribunal's order in the assessee's case. The High Court concurred with the Tribunal's findings, upholding the impugned orders as they were based on previous decisions and did not require any interference.3. Perversity of ITAT's finding:The High Court noted that the concurrent findings of fact based on an earlier decision by the Tribunal had attained finality and were not challenged. Consequently, the Court agreed with the view taken by the Tribunal. As a result, the questions of law did not necessitate answers, and all the appeals were decided in favor of the assessee and against the department, leading to the dismissal of the appeals.