2014 (4) TMI 536

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.... The Revenue claims to be aggrieved by the order of the Income Tax Appellate Tribunal (ITAT) which allowed the assessee's appeal. It is urged that the impugned judgment discloses errors which led to a substantial question of law pertaining to the interpretation of Section 292 (C) of the Income Tax Act, 1961 in respect of the materials seized and inference drawn by the income tax authorities in t....

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....sed income. On the basis of these inferences, amounts were added. The assessee was given the benefit of deductions actually claimed in his books towards his expenses. Consequently, grossing up of liability on account of TDS was also added by the AO. The third head on which the AO added amount was the sum of Rs.28,28,000/- said to be the loss of interest income due to the advance given to the asses....

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....d been paid. Learned counsel for the Revenue relied upon the materials in this regard and also stated that on account of Section 69 (c) read with Section 292 (c), the presumption logically drawn had to be sustained. He also pointed out to the Commissioner of Appeals' decision which has substantially upheld the AO's order and that the Tribunal fell into error in disturbing this finding . Whilst ....

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....a statement under Section 132 (4) or any reply to the questionnaire which was circulated in this case, the conclusions drawn would have found support in law. In the absence of these, this Court is of the opinion that the findings of the AO - and that of the CIT to the extent that they confirm them - were conjectural and not based on any material. In these circumstances, the presumptions which the ....