Addition u/s68 deleted as Revenue fails to disprove explained cash credits; Tribunal's factual findings stand unshaken

HC upheld ITAT's deletion of addition under s.68, holding that the Revenue failed to discharge its burden to prove that the cash credits were unexplained. The assessee had disclosed the identities of the creditors, the jewellers to whom old jewellery was sold, and the banking-channel payments. The AO did not doubt these core facts nor conduct any inquiry from the jewellers, relying only on suspicion about the genuineness of the jewellery sale. Since the creditors had demonstrated a plausible source of funds and the deposits with the assessee were undisputed, the Tribunal's findings were treated as findings of fact, immune from interference. The appeal was decided against the Revenue.

---

---

Issues:
The judgment involves an appeal under Section 260-A of the Income Tax Act, 1961 regarding the addition made under Section 68 of the Income Tax Act.

Issue 1: Addition under Section 68 of the Income Tax Act
The Tribunal dismissed the revenue's appeal and confirmed the first appellate authority's order, deleting the addition of Rs. 3,48,00,852. The appeal questioned the Tribunal's decision, arguing that the assessing officer did not make sufficient inquiries to establish any suspicion regarding the transaction's genuineness, despite opportunities given to the assessee to provide necessary proofs.

Issue 2: Inquiry and Consideration of Material
The appeal also contended that the Tribunal erred in deleting the addition without appreciating that the assessing officer had considered all available material, including submissions and statements of the assessee and related parties. The Tribunal noted evidence supporting the sale of jewellery, including purchase invoices, cheques for sale consideration, and bank account credits, but highlighted the lack of inquiry by the assessing officer from the jeweller or other sources to confirm suspicions.

The Tribunal's findings were based on the evidence and material on record, concluding that no substantial question of law arose. The Tribunal emphasized that the assessee disclosed details of the jeweller and established the payment mode through banking channels, with no doubts raised about the transaction's genuineness on critical aspects. The Tribunal found that the assessing authority failed to inquire from the jeweller from whom jewellery was purchased, leading to the conclusion that the transaction was genuine and the source of the deposit with the assessee was available.

The Tribunal's decision was based on factual findings and evidence, determining that no substantial question of law was raised. Consequently, the appeal lacked merit and was dismissed, with no costs awarded.

---