Treatment of sales as income from unexplained source

Loading

Treatment of sales as income from unexplained source

DELHI HIGH COURT
PR. COMMISSIONER OF INCOME TAX-20, DELHI VERSUS AKSHIT KUMAR
ITA 348/2019 & CM APPL. 15854/2019, CM APPL. 15852/2019, CM APPL. 15853/2019
Short overview of the case:
 Allegation in the case was that the Assessee had created a false business with the objective of laundering its unaccounted income is based on the enquiries conducted by the AO under Section 133B
Assessee had failed to appear in person even after being summoned under Section 131(1) of the Act to clarify the position
The court held as under:
Quantum figure and the opening stock which stood accepted in the earlier years had to be taken as actual stock available with the Respondent-Assessee
 the sales made by the Respondent-Assessee out of its opening stock were not treated as unexplained income, to be taxed as income from other sources.
It thus manifests that the learned ITAT has taken into consideration the entire material placed on record including the report of the AO.
ITAT has applied the rule of consistency and rejected the enquiry made by the AO in the relevant assessment year.
Rule of consistency is a well-established and recognised principle applicable to the Income-Tax proceedings.
Pertinently, the Respondent-Assessee had closed his business in July, 2015 after selling all the stocks and the survey carried out at a later stage would not have strong penitentiary value. Besides, all these aspects are completely factual in nature and we are unable to find any perversity in the impugned order.
 The factual findings recorded by the Income-Tax authorities, have been examined by the last fact-finding authority i.e. the learned ITAT.
In absence of any perversity in the impugned order, we are not inclined to entertain the present appeal, which urges questions of law that are entirely resting on findings of fact.
Menu