Appeal Against Assessment Order on Wrongful Cash Deposit Claim: Case of Rajeev Gupta vs DCIT

How Rajeev Gupta’s Appeal in ITA No. 1066/Del/2022 Prevailed Against Alleged Wrongful Cash Deposit Claim

The Income Tax Appellate Tribunal of Delhi’s bench rendered a landmark decision on March 3, 2023, in the case numbered ITA 1066/DEL/2022. This case spotlighted the appeal of Rajeev Gupta against the Deputy Commissioner of Income Tax, Central Circle-46(1), Delhi, for the assessment year 2017-18. The crux of the matter revolved around an assessment order linked to alleged wrongful cash deposits during the demonetization period in India.

Background

Rajeev Gupta, the appellant, contested the order passed under section 263 of the Income Tax Act, 1961, by the Commissioner of Income Tax (CIT) Delhi-10. This order was in relation to an assessment framed under sections 143(3)/153A, which Gupta claimed was against the law, facts, circumstances, natural justice, and all other principles and rules of law, thereby necessitating quashing.

The primary grievance arose from the CIT’s conclusion that a cash deposit of Rs. 5,12,00,000 during the demonetization period allegedly belonging to Gupta was erroneously linked to him, leading to an arbitrary notice and order without jurisdiction.

The Proceedings

During the proceedings, it was unveiled that the controversial cash deposit was made into an account that was not owned by Gupta. Instead, it was registered under the name of Orchid Infrastructures Development Pvt. Ltd. This revelation came after an inquiry conducted with the bank, which contradicted the claim that the funds belonged to Gupta.

Gupta’s counsel highlighted multiple accounts owned by him, none of which were linked to the disputed transaction. This defense played a crucial role in the tribunal’s decision-making process.

The Verdict

The tribunal, after considering the facts and circumstances, allowed Gupta’s appeal, setting aside the assessment order. This pivotal decision underscored the tribunal’s commitment to ensuring that justice prevails, highlighting the importance of accurately identifying the factual matrix surrounding alleged cash deposits during demonetization.

Conclusion

The case of Rajeev Gupta vs. DCIT stands as a testament to the intricacies involved in tax assessment disputes and the judicial scrutiny required in cases of alleged wrongful cash deposits. It encapsulates a scenario where the absence of concrete evidence against the assessee led to the triumph of justice, ensuring that individuals are not wrongfully implicated.

ITA No. 1066/Del/2022 has laid down a significant precedent for similar cases, emphasizing the critical nature of thorough verification and investigation in the assessment processes by tax authorities.

Appeal Against Assessment Order on Wrongful Cash Deposit Claim: Case of Rajeev Gupta vs DCIT