This article delves into the details of ITA No. 1886/DEL/2020, involving ACIT Central Circle-8, New Delhi, and Sanjay Gupta, New Delhi. The case concerns the Assessment Year (AY) 2016-17, was filed on November 20, 2020, and the final order was pronounced on February 24, 2023. The core issue revolves around the inclusion of foreign income in the assessment of Sanjay Gupta.
A search and seizure action under Section 132 of the Income Tax Act, 1961, was carried out in the OPG Group of cases on November 15, 2017. A search warrant was issued in the name of Sanjay Gupta in the case of M/s. OPG Securities Pvt. Ltd., among others. Sanjay Gupta had originally filed his return of income under Section 139 on September 26, 2013, declaring a total income of Rs. 80,51,470, which was processed under Section 143(1) on April 7, 2014.
Following the search, a notice under Section 153A was issued on June 27, 2019, and Sanjay Gupta filed his return in response on September 21, 2019, declaring the same total income as previously filed. During the search operation, a salary certificate found on the mobile phone of Devansh Gupta indicated that Sanjay Gupta received a salary of AED 2000 per month, which was not reported in his income tax returns.
The Assessing Officer (AO) added the unreported foreign salary to Sanjay Gupta’s income, citing it as concealed global income. The AO calculated the total addition for AY 2016-17 at Rs. 3,55,296 based on the exchange rate and the salary amount.
Aggrieved by the AO’s decision, Sanjay Gupta filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) deleted the addition, noting that Sanjay Gupta had only visited Dubai for four days during the year, denied earning the salary, and the salary certificate was not signed by him. The CIT(A) also pointed out that M/s. Richr Business Services, Dubai, did not have any business operations in India, and no such income was found credited in any of Sanjay Gupta’s bank accounts.
The Income Tax Appellate Tribunal (ITAT), comprising Dr. B. R. R. Kumar, Accountant Member, and Sh. Yogesh Kumar US, Judicial Member, reviewed the case. The tribunal agreed with the CIT(A)’s findings that Sanjay Gupta successfully rebutted the presumption under Section 292C of the Income Tax Act. The ITAT affirmed the CIT(A)’s order, thereby deleting the addition of Rs. 3,55,296.
The ITAT concluded that the addition made by the AO was not justified based on the evidence and facts presented. The tribunal’s decision underscores the importance of substantial evidence in cases of alleged concealed foreign income.
The final order, pronounced on February 24, 2023, reads:
In the result, the appeal of the revenue is hereby dismissed.
Signed by:
Dr. B. R. R. Kumar, Accountant Member
Sh. Yogesh Kumar US, Judicial Member
This judgment highlights the necessity of concrete evidence when making additions to an assessee’s income based on alleged foreign earnings.
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