Appellant: Dinesh Yadav, Faridabad
Respondent: DCIT, CC, Ghaziabad
Assessment Year: 2018-19
Case Filed On: 2021-09-14
Order Type: Final Tribunal Order
Date of Order: 2022-10-10
Pronounced On: 2022-10-10
Final Judgment: IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER
The case revolves around the appeal filed by Dinesh Yadav against the assessment order passed by the DCIT, Central Circle, Ghaziabad. The main contention in the case was the unexplained investment in the property and the cash found during the search operation, which was alleged to be unaccounted money.
The appellant, Dinesh Yadav, Faridabad, filed an appeal against the assessment order for the assessment year 2018-19. A search and seizure operation was conducted under section 132 of the Income Tax Act, 1961, at the residential premises of the appellant, leading to the discovery of cash amounting to Rs. 22,85,600. The appellant was asked to explain the source of the cash found. The appellant claimed that the cash was generated from the sale of old paintings inherited from his late father-in-law.
The appellant contended that the paintings were personal assets, and their sale proceeds were kept at home. The sale transactions were in cash, and individual sales did not exceed Rs. 2,00,000, thus not requiring PAN or KYC details of the buyers as per section 269ST read with section 139A of the Income Tax Act, 1961. The appellant provided a list of paintings sold, detailing the artist names, valuation as on 31.03.2007, and the cash selling price.
The AO noted that no concrete evidence or documentation was provided by the appellant to substantiate the claim of sale of paintings. The AO considered the entire cash found during the search as unexplained and made an addition of Rs. 22,85,600 to the appellant’s income.
The CIT(A) granted partial relief to the appellant by accepting the explanation for Rs. 2,85,600 and upheld the addition of the remaining Rs. 20,00,000 as unexplained money under section 69A of the Income Tax Act, 1961.
The ITAT Delhi Bench ‘G’ considered the facts and circumstances of the case, including the appellant’s explanation and the lack of corroborative evidence from the AO. The Tribunal noted that the AO did not make any further inquiries or field investigations to ascertain the actual cost of the paintings or verify the appellant’s claims. The Tribunal emphasized that the addition was based on conjectures and surmises without substantial evidence.
The Tribunal also referenced various judicial precedents, including the judgment of the Hon’ble Delhi High Court in CIT vs. Praveen Juneja, which highlighted the importance of concrete evidence in making additions based on documents found during searches.
The ITAT Delhi Bench ‘G’ decided to restrict the addition to Rs. 6,00,000, i.e., 30% of the total disallowance made by the AO, and directed the AO to delete the remaining addition. The Tribunal’s decision was based on the principle of justice and the lack of substantial evidence from the Revenue’s side to support the entire addition.
In conclusion, the appeal filed by Dinesh Yadav was partly allowed by the ITAT Delhi Bench ‘G’. The Tribunal directed the AO to restrict the addition to Rs. 6,00,000 and delete the remaining amount, thereby providing significant relief to the appellant. The case highlights the importance of concrete evidence and the need for thorough inquiries by the assessing authorities before making substantial additions to the taxpayer’s income.
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform