Law:

Section:

Section 69 of the income-tax act, 1961-Unexplained investments-In the course of assessment for relevant assessment year, ito found certain discrepancies in stock account of rice and paddy of assessee-company and calculated total transactions outside books of account at rs. 90,000-After considering facts and circumstances of case, tribunal found that impugned amount of rs. 90,000 invested in undeclared stock of paddy and rice was covered by additions made by ito in earlier two years on account of transactions outside books of account in those years and, therefore, held that further addition of this amount was not reasonable-Whether conclusion drawn by tribunal was perverse and was based on no evidence-Held, no Facts In the course of assessment for the relevant assessment year, the ITO found discrepancies in the stock account of rice and paddy of the assessee-company. As there was no reasonable explanation offered by the assessee, the ITO concluded that the assessee was having transactions outside the books. The ITO calculated the total transactions outside the books of account at Rs. 90,000. The AAC confirmed the estimate of the ITO. On second appeal, the Tribunal found that in the immediately preceding two years addition to the extent of more than Rs. 90,000 had been made as representing the additional investment in the business outside the books. Considering the facts and circumstances of the case, the Tribunal came to the conclusion that the amounts added in the earlier years were available to that extent for being invested in the paddy and rice business and the impugned investment in the relevant accounting year of Rs. 90,000 would be fully covered in the additions made in the earlier two years. On these grounds, the additions of Rs. 90,000 were deleted. On reference: Held The Tribunal had taken special care to note that the money had come from undisclosed fund and had further recorded a finding of fact that such undisclosed fund was available to the assessee on account of additions made to the tune of Rs. 92,000 in the earlier two years. Where the Court has to judge as to whether a finding of fact arrived at by the Tribunal is perverse or not, only…

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