IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 1414 of 2011 For Approval and Signature:
HONOURABLE MR.JUSTICE V. M. SAHAI HONOURABLE MR.JUSTICE N.V. ANJARIA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
Whether this case involves a substantial question 4 of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
========================================================= COMMISSIONER OF INCOME TAX-I - Appellant(s) Versus JITENDRA DALPATBHAI SHAH - Opponent(s) ========================================================= Appearance :
MR MANAV A MEHTA for Appellant(s) : 1, None for Opponent(s) : 1, =========================================================
CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI
and HONOURABLE MR.JUSTICE N.V. ANJARIA Date : 07/09/2012 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE V. M. SAHAI)
1. We have heard Mr. Manav A. Mehta, learned counsel for the appellant in this Tax Appeal, which has been filed on the following proposed substantial question of law:
“Whether the Appellate Tribunal is right in law and on facts in deleting the addition made by Assessing Officer in respect of capital gain of Rs.1,38,21,924/- as unexplained cash credit under section 68 of the I.T. Act?”
2. The assessee filed his return of income for the assessment year 2006- 07 on 31.01.2007. The Assessing Officer framed the assessment under section 143(3) on 08.12.2008. The Assessing Officer treated the short term capital gain of Rs.1,38,21,924/- declared by the assessee as unexplained cash credit under section 68 of the Income Tax Act, 1961 (for short `the Act'). The reason given by the Assessing Officer was that the assessee has brought his income from unaccounted sources in his books of account by paying lesser tax claiming that income is from short term capital gain.
3. In the appeal filed by the assessee, the CIT(A) directed the Assessing Officer to accept the capital gain of Rs.1,34,82,475/- as disclosed by the assessee. The Revenue challenged the order of CIT(A) before the Tribunal. The Tribunal considered the argument of the Revenue and held in paragraph Nos. 7 and 7.1 as under:
“7. After hearing the ld. D.R., we have carefully gone through the orders of the authorities below. It is pertinent to note that in the return of income, the assessee has declared the short-term capital gain of Rs.1,34,82,475/- as under:
7.1 In the assessment order, the AO treated the aforesaid short term capital gain as unexplained credit under section 68 of the I.T. Act, 1961. The source of credit has been explained by the assessee with documentary evidence and these documents were not found false. On perusal of the impugned order of the ld. CIT(A), we are convinced that on doubts and suspicion, the AO has treated short-term capital gain of Rs.1,38,21,924/- declared by the assessee as unexplained credit under section 1961 of the I.T. Act and in our considered opinion, the ld. CIT(A) has given cogent reason for directing the AO to accept the short-term capital gain of Rs.1,34,82,475/- declared by the assessee in the return of income. We, therefore, decline to interfere.”
4. The view taken by the Tribunal was that on doubts and suspicion the Assessing Officer has treated short term capital gain declared by the assessee as unexplained credit under the Act and on the contrary, the CIT(A) has given valid reasons for accepting the short term capital gain declared by the assessee in the return of income. This appeal is concluded by findings of fact. No substantial question of law arises for consideration of this court. Accordingly, this Tax Appeal is dismissed.
(V.M. SAHAI, J.) (N.V. ANJARIA, J.) (SN DEVU PPS)