Case Analysis of ITA No. 909/DEL/2022: Gunjan Bhageria Vs. ACIT

Case Analysis of ITA No. 909/DEL/2022: Gunjan Bhageria Vs. ACIT

Date of Hearing: July 13, 2023
Date of Pronouncement: September 6, 2023

Introduction

This document provides a detailed analysis of the Income Tax Appellate Tribunal (ITAT) case numbered ITA No. 909/DEL/2022. The case involved the assessee, Ms. Gunjan Bhageria of New Delhi, and the respondent, the Assistant Commissioner of Income Tax (ACIT), also based in New Delhi. The appeal focused on the assessment year 2017-18, with the tribunal’s verdict dismissing the assessee’s appeal.

Background

Ms. Gunjan Bhageria was represented by Sh. Arvind Kumar, Advocate, while the Department was represented by Sh. T. James Singson, CIT, Departmental Representative (DR). The case arose from discrepancies in the income tax returns filed by the assessee for the assessment year 2017-18, which were selected for scrutiny leading to the dispute.

Case Summary

The assessee contested the order dated March 31, 2022, passed under section 263 of the Income Tax Act, 1961, by the Principal Commissioner of Income Tax (Central), Delhi-1. The crux of the issue was related to two major inquiries: unexplained cash payments towards credit card bills and claims of long-term capital gains (LTCG) exempt under section 10(38) of the Income Tax Act.

Upon extensive review, the tribunal found that there was a lack of genuine inquiry into both matters by the assessing officer (AO), leading to erroneous conclusions that were prejudicial to the interests of the revenue. It was brought to light that the assessee had made significant cash payments for credit card bills without adequate explanation of the source. Additionally, the claim of LTCG from the sale of shares of Monotype India Limited was scrutinized, revealing discrepancies that questioned the genuineness of the transactions.

Final Judgment and Implications

The tribunal, after considering the submissions and evidence presented, upheld the order passed under section 263 of the Income Tax Act by the Principal Commissioner of Income Tax. It was concluded that the assessment order made by the AO was indeed erroneous and prejudicial to the interest of revenue in respect of unexplained cash payments and the claim of LTCG. Thus, the appeal filed by Ms. Gunjan Bhageria was dismissed.

The case underscores the importance of thorough scrutiny and inquiry in assessment proceedings and serves as a precedent for similar matters involving unexplained transactions and claims of tax exemption under LTCG.

Case Analysis of ITA No. 909/DEL/2022: Gunjan Bhageria Vs. ACIT