In ITA No. 830/DEL/2019, the dispute involves the Assistant Commissioner of Income Tax, Circle-19, New Delhi, and Pawan Kansal concerning undisclosed sales and expenses for the assessment year 2011-12. This case highlights significant issues regarding undisclosed income and the procedural facets of tax assessments under the Income Tax Act.
Pawan Kansal, engaged in the manufacturing and trading of stainless steel cutlery and utensils, was assessed with substantial additions by the IT department. These additions included undisclosed sales, underreported stock, and disallowed expense claims. Initially, the appellate authorities had deleted these additions, but the case was reopened following a search and seizure operation, leading to a repeat of the same additions.
The initial deletions of these additions by CIT(A) and their subsequent confirmation by the ITAT set the stage for the appeal by the Revenue. The Revenue’s challenge was focused on the reinstatement of these additions in a subsequent assessment under section 153A of the Act. However, the legal precedent and the principles of res judicata played a crucial role, as previous appellate decisions were upheld, disallowing the Revenue to reassert the same additions.
The tribunal’s decision emphasized the finality of appellate decisions unless new evidence suggests otherwise. This case underscores the importance of consistency in judicial decisions and the protection of taxpayer rights against repetitive claims by the tax authority.
The Tribunal dismissed the Revenue’s appeal, affirming that previous deletions of additions should stand, marking a significant win for the taxpayer and setting a precedent on the handling of similar cases. This decision highlights the judiciary’s role in maintaining fair assessment practices and respecting previous judicial outcomes.
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