Case Number: ITA 1164/DEL/2020
Appellant: ACIT Central Circle-28, New Delhi
Respondent: Rajiv Gupta, New Delhi
Assessment Year: 2011-12
Result: Appeal dismissed due to lack of incriminating evidence
Case Filed On: 2020-06-12
Order Type: Final Tribunal Order
Date of Order: 2023-02-17
Pronounced On: 2023-02-17
The case involves an appeal filed by the Assistant Commissioner of Income Tax (ACIT) Central Circle-28, New Delhi, against Rajiv Gupta, New Delhi, for the assessment year 2011-12. The appeal was directed against the order of the Commissioner of Income-tax (Appeals) [CIT(A)]-28, New Delhi, dated 25.02.2020.
The appellant, ACIT Central Circle-28, New Delhi, filed the appeal against the respondent, Rajiv Gupta, challenging the order passed by the CIT(A). The main contention in the appeal was regarding the alleged unexplained profit/investment under Section 69A of the Income Tax Act, 1961, and credit card payments made by the respondent, which the appellant claimed were from undisclosed sources.
The case was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘F’, New Delhi, on 06.02.2023. The bench comprised Shri Shamim Yahya, Accountant Member, and Ms. Astha Chandra, Judicial Member. The appellant was represented by Shri T. Kipgen, CIT DR, while the respondent was represented by Shri Ajay Wadhwa, Advocate, Ms. Ragini Handa, CA, and Shri Ujjwal Jain, CA.
The Revenue contended that the CIT(A) had erred in deleting the addition of Rs.7,36,99,291/- on account of unexplained profit/investment and Rs.26,14,151/- on account of unexplained credit card payments. The Revenue argued that these additions were based on information from seized documents and post-search enquiries.
The ITAT reviewed the case and noted that the CIT(A) had deleted the additions on the ground that no incriminating documents were found during the search proceedings. The ITAT found that the CIT(A) had correctly applied the decision of the Hon’ble Delhi High Court in the case of Kabul Chawla (2016) 380 ITR 573 (Delhi), which restricts additions only to the incriminating documents found during search and seizure operations.
The ITAT further observed that the AO had not provided any specific document which suggested undisclosed income relating to the transactions of purchase of shares or credit card payments. The ITAT concluded that the additions made by the AO were not based on any incriminating material found during the search, and therefore, the CIT(A) had rightly deleted the additions.
The ITAT upheld the order of the CIT(A) and dismissed the appeal filed by the Revenue. The ITAT emphasized the importance of adhering to the guidelines set forth in the CBDT Circular No.17/2019 and the decision of the Hon’ble Delhi High Court in Kabul Chawla’s case.
This case highlights the significance of the CBDT Circular No.17/2019, which aims to reduce litigation by setting a monetary threshold for filing appeals. The circular helps in minimizing the burden on the judiciary and focuses the resources of the Revenue Department on high-value cases. The ITAT’s decision to dismiss the appeal due to lack of incriminating evidence underscores the importance of adhering to the guidelines set forth in the circular.
The dismissal of the appeal serves as a reminder to the Revenue to carefully evaluate the evidence before making additions in assessments. It ensures that judicial resources are utilized efficiently and only significant cases with substantial evidence are brought before the tribunal. The ITAT’s decision also reinforces the importance of the principles laid down in the case of Kabul Chawla, ensuring that additions in assessments are made only based on incriminating material found during search operations.
ACIT Central Circle-28 vs. Rajiv Gupta – ITA 1164/DEL/2020: Assessment Year 2011-12
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