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of <h1>Appeal Dismissed: No Evidence Found for Unexplained Credit Under Income Tax Act Sections 68 and 115BBE</h1> <h3>PR. COMMISSIONER OF INCOME TAX -12 Versus KARUNA GARG</h3> PR. COMMISSIONER OF INCOME TAX -12 Versus KARUNA GARG - [2023] 457 ITR 591 (Del) Issues:1. Challenge to the ITAT order regarding unexplained credit under Section 68 read with Section 115BBE of the Income Tax Act, 1961.2. Interpretation of the judgment in Suman Poddar v. ITO and its relevance to the present case.3. Analysis of the order in PCIT vs. Smt. Krishna Devi and its impact on the current appeal.Issue 1:The appellant filed an Income Tax Appeal challenging the ITAT's decision regarding the addition of Rs.1,60,18,923 as unexplained credit under Section 68 read with Section 115BBE of the Income Tax Act, 1961. The appellant argued that the ITAT erred in deleting the additions on the grounds of lack of independent inquiry by the assessing officer. The Revenue referred to the judgment in Suman Poddar v. ITO, where the Assessee's appeal was dismissed due to an astronomical increase in share price not commensurate with the company's financial parameters. However, a Coordinate Bench in PCIT vs. Smt. Krishna Devi upheld the ITAT order in question, emphasizing the lack of material supporting the conclusion of fictitious transactions. The Court found no substantial question of law and dismissed the appeal.Issue 2:The judgment in Suman Poddar v. ITO was cited by the Revenue to support the challenge against the ITAT's decision. However, the Court noted that the factual matrix in Suman Poddar was different, as it revolved around the lack of evidence regarding actual share sales. The Court also distinguished the case of Sumati Dayal v. CIT, stating that both cases were not applicable to the current scenario. The Court emphasized the need for evidence and proof rather than suspicion alone to establish claims, ultimately dismissing the appeal based on the lack of supporting material.Issue 3:The order in PCIT vs. Smt. Krishna Devi highlighted the AO's reliance on the financials of the company and the significant increase in share prices without adequate justification. The ITAT found the AO's conclusion unsupported by material evidence, leading to the dismissal of the additions. The Court agreed with the ITAT's decision, noting the lack of cogent material to sustain the additions. The Court emphasized the importance of factual evidence over suspicion and upheld the ITAT's findings, concluding that no substantial question of law arose for consideration in the appeal.This comprehensive analysis of the judgment addresses the issues raised in the appeal, highlighting the key arguments, legal interpretations, and the ultimate decision of the Court in dismissing the appeal.
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