Substantial question of law absent where evidence findings support deletion of alleged cash receipts and acceptance of project completion method.

A finding based on appreciation of evidence will not raise a substantial question of law unless perversity is shown. The Tribunal sustained deletion of an addition for alleged unaccounted cash receipts because the seized fund-flow material could not be relied on selectively and any receipts, if they existed, related to an earlier year. It also upheld rejection of an attempt to disturb the assessee's regularly followed project completion method, since the final bill was prepared later and the addition rested only on an unsupported search-party opinion. The assessee succeeded on both issues.

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Issues: (i) Whether the deletion of addition made towards alleged unaccounted cash receipts gave rise to any substantial question of law. (ii) Whether the rejection of the project completion method and the corresponding addition for the assessment year was justified.

Issue (i): Whether the deletion of addition made towards alleged unaccounted cash receipts gave rise to any substantial question of law.

Analysis: The addition was founded on the fund flow statement found during search, which showed payments only up to 22 December 2005. The Tribunal held that the material could not be relied upon in part while ignoring the rest, and that the receipts, if any, related to an earlier assessment year. The finding was one of fact and no perversity was shown.

Conclusion: No substantial question of law arose on this issue, and the finding in favour of the assessee was sustained.

Issue (ii): Whether the rejection of the project completion method and the corresponding addition for the assessment year was justified.

Analysis: The Tribunal accepted that the assessee followed the project completion method and that the final bill was prepared in April 2007. The addition rested only on the opinion of the search party, without supporting evidence, and the record also indicated a payment dispute pending before arbitration. On that material, the Tribunal found no basis to treat the project as completed in the relevant year or to shift the income artificially.

Conclusion: No substantial question of law arose on this issue, and the deletion of the addition in favour of the assessee was upheld.

Final Conclusion: The Revenue's appeal was not entertained on either question, and the assessment additions deleted by the Tribunal were left undisturbed.

Ratio Decidendi: A finding based on appreciation of evidence, including rejection of a piecemeal reliance on seized material and acceptance of a regularly followed project completion method, does not raise a substantial question of law unless perversity is shown.

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