TaxTMI 
TaxTMI 
2017 (1) TMI 820
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....as the 'I.T. Act', for brevity) the assessee is said to have filed a return of income declaring a total income of Rs. 7,60,000/-. However, based on the material seized by the assessing authority and on completion of the assessment, the following additions were said to have been made: (i) Undisclosed income to the account of Trade Creditors at Rs. 2,67,560/-; (ii) Undisclosed income, namely, the unexplained investments towards purchases under Section 69B of the I.T.Act. at Rs. 50,18,873/-; and (iii) Gross profit on suppressed sales at Rs. 13,33,242/-. 3. The assessee is said to have filed an appeal before the Commissioner of Income Tax (Appeals) against the above order. The said authority had confirmed the addition to the account of Trade Creditors. However, the addition under Section 69B of the I.T. Act was deleted, holding that on the date when the unaccounted purchases were made, the money from unaccounted sales was available for making such purchases. 4. In dealing with the issue of the addition on account of gross profit on suppressed sales made by the Assessing Officer, the Appellate authority had increased the addition to Rs. 90,96,818/-. It was observed that the Assessi....
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.... in trade creditors account, ignoring the fact that the assessing officer has brought on record the ledger extract of the assesse as appearing in the books of the supplies in whose books no such outstanding balance is reflected? 2. Whether the ITAT is justified in not upholding the addition made on account of 'unaccounted purchases', by ignoring the provisions of section 69B of the Income Tax Act, 1961? 3. Whether the ITAT is justified in deleting the addition made by the CIT(A) on account of 'unaccounted sales/suppressed sales', when the ITAT has not disbelieved the amount of closing stock arrived at by the CIT(A)?" 9. The learned Counsel Shri Ameet Kumar Deshpande appearing on behalf of the Revenue would contend that the Tribunal had erred in deleting the addition of Rs. 2,67,556/- made on account of the difference in trade creditors as the Assessing Officer had brought on record, the ledger extracts of the assessee as appearing in the books of the supplier and the assessee had failed to reconcile the differences in the statement of accounts. The Tribunal was also in error in not taking into account the fact that the assessee had indulged in unaccounted business transactions a....
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.... of accounts of the assessee were not reliable. Therefore, after considering the respondent's explanation had rejected the books and had invoked the provisions of Section 145 (3) of the I.T. Act. The Assessing Officer estimated the income by applying the Gross Profit Rate of 8.63% on the unaccounted sales over and above the declared sales and determined the income accordingly to the best of his judgment in the manner provided under the I.T. Act. It is pointed out that the rejection of the books of account under Section 145 (3) of the I.T. Act the total sales determination and the gross profit rate at 8.63% adopted by the Assessing Officer has not been disputed by the respondents and therefore has attained finality. Pursuant to the appeals before the CIT (Appeals) and the further appeals before the ITAT and the present appeals having been filed by the Revenue, the substantial questions of law that have been framed in the present appeals would have to be viewed in the background that the appellate Tribunal on a scrutiny of the entire factual material on record has passed the impugned order and now an attempt is being made by the Revenue to seek re-appreciation of the evidence on fact....
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....oner of Income Tax) 2. 229 ITR 229 (All) @ 232 (Commissioner of Income Tax vs. Banwari Lal Banshidhar) 3. 302 ITR 246 (P & H) @ 249 (Commissioner of Income Tax vs. Aggarwal Engineering Company) 4. 377 ITR 568 @ 580 (Commissioner of Income Tax vs. Amman Steel and Allied Industries) 16. In the light of the above contentions and on a perusal of the impugned orders, we notice that the learned Counsel for the appellants has re-worded the substantial questions of law as framed in the memoranda of appeals and as framed by this Court at the stage of admission, as on 14.06.2016 at the final hearing as above. 17. It is evident from a reading of Section 260A of the I.T. Act that an appeal would lie to this Court from an order of the ITAT, only if there is a substantial question of law that arises for consideration. In Vijay Kumar Talwar's case supra, the Supreme Court has held that it is mandatory for the High Court to formulate the substantial question of law on which the appeal would be considered. But that the expression "a substantial question of law," is not defined in the I.T. Act. However, it has acquired a definite connotation through various judicial pronouncements. In Shri Chun....
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....eral rule is that High Court will not interfere with the concurrent findings of the courts below. But it is not an absolute rule. Some of the well-recognised exceptions are where (i) the courts below have ignored material evidence or acted on no evidence; (ii) the courts have drawn wrong inferences from proved facts by applying the law erroneously; or (iii) the courts have wrongly cast the burden of proof. When we refer to 'decision based on no evidence', it not only refers to cases where there is a total dearth of evidence, but also refers to any case, where the evidence, taken as a whole, is not reasonably capable of supporting the finding." 20. In Vijay Kumar Talwar's case the Supreme Court has observed thus: "21. A finding of fact may give rise to a substantial question of law, inter alia, in the event the findings are based on no evidence and/or while arriving at the said finding, relevant admissible evidence has not been taken into consideration or inadmissible evidence has been taken into consideration or legal principles have not been applied in appreciating the evidence, or when the evidence has been misread. (See: Madan Lal Vs. Mst. Gopi & Anr. [19800 4 SCC 255; Narendr....