Evidence-based deletion of Section 68 additions involves no substantial question of law.

The assessee filed its return for Assessment Year 2012–13 declaring nil income. Assessment under Section 143(3) of the Income Tax Act, 1961 was completed on 16 March 2015, followed by revision under Section 263.

In the first round of litigation, the Income Tax Appellate Tribunal remanded the matter for a de novo assessment.

On remand, the Assessing Officer made additions of ₹6.27 crore under Section 68 concerning transactions with M/s Growfast Realtors (P) Ltd., ₹19.13 crore under Section 68 concerning M/s Sarda Vanijya (P) Ltd., and ₹20,33,817 towards alleged bogus trading liabilities.

The Commissioner (Appeals) confirmed the additions.

The Tribunal, upon considering documents and additional evidence produced in a paper book, deleted the additions of ₹6.27 crore and ₹19.13 crore, deleted certain trading-liability additions, and partly restricted other additions.

The Revenue challenged the Tribunal’s order dated 10 September 2024 before the High Court, contending that the Tribunal had wrongly deleted the Section 68 additions and had failed to apply the principles governing accommodation entries and unexplained credits.

The Revenue’s delay of 393 days in filing the appeal was condoned.

Whether the Tribunal was justified in deleting the additions of ₹6.27 crore and ₹19.13 crore made under Section 68 of the Income Tax Act on the ground that the assessee had established the genuineness of the transactions?

Whether the Tribunal erred in law by accepting additional evidence and relying upon documents produced by the assessee to establish the nature, source and genuineness of the transactions?

Whether the Revenue’s grounds raised substantial questions of law warranting interference under the High Court’s appellate jurisdiction?

Section 68 of the Income Tax Act, 1961 permits an addition where a credit appearing in the assessee’s books is not satisfactorily explained by establishing the relevant nature and source of the credit, including the genuineness of the transaction.

In an appeal against an order of the Income Tax Appellate Tribunal, the High Court may interfere only where a substantial question of law arises; factual findings of the Tribunal, as the final fact-finding authority, are not ordinarily disturbed absent perversity.

Rule 18(4) of the Income Tax (Appellate Tribunal) Rules, 1963 permits a party to file additional evidence through a separate paper book accompanied by an application stating the reasons for filing it.

The Revenue relied upon PCIT v. Swati Bajaj, PCIT v. NRA Iron & Steel (P) Ltd., and PCIT (Central)-2, Kolkata v. BST Infratech Ltd., but the Court held that the questions raised were factual and did not warrant consideration as substantial questions of law.

The Court examined the Tribunal’s order and found that the Tribunal had considered the assessee’s supporting material, including confirmations, transaction details, payment records, an accountant’s certificate, evidence of tax deducted at source, books of account and bank records.

In relation to Growfast Realtors, the Tribunal found that the amount represented payments made by the assessee and relied upon the confirmation of accounts.

In relation to Sarda Vanijya, the Tribunal relied upon transaction details, the accountant’s certificate under the first proviso to Section 201(1), and evidence that TDS had been deducted, concluding that the payments were genuine business payments.

The Court further held that the Tribunal was legally entitled to consider the additional evidence under Rule 18(4), particularly since the assessee explained that its earlier records had been lost, damaged or soiled and had subsequently been retrieved.

The Tribunal had given reasons for accepting some transactions, confirming one addition, and restricting others to 50 per cent after evaluating the available evidence.

Since these conclusions were based on evidence and were not shown to be perverse, the Revenue’s challenge involved only re-appreciation of facts and did not give rise to a substantial question of law.

The Tribunal’s deletion of the Section 68 additions of ₹6.27 crore and ₹19.13 crore, as well as its treatment of the trading-liability additions, was upheld.

The appeal, ITAT No. 84 of 2026, was dismissed, with no order as to costs.

The delay-condonation application, GA No. 1 of 2026, was allowed, and the connected stay application was disposed of accordingly.