This article provides a detailed analysis of the Income Tax Appellate Tribunal’s decision in the case of DCIT, Central Circle, Ghaziabad vs. Pummy Sahni concerning the assessment year 2016-17, as per ITA No. 1347/Del/2021.
The case involved an appeal by the Revenue against the order of the learned Commissioner of Income-tax (Appeals), Kanpur, dated 12.07.2021. The dispute centered around the deletion of substantial additions made to the assessee’s declared income, which the Assessing Officer had initially identified during the reassessment proceedings under section 153A of the Income Tax Act.
The primary contention in the appeal was the deletion of an addition amounting to Rs.1,44,69,493, which was based on discrepancies between the profit and loss account and the income declared in the return filed by the assessee. Another significant issue was the deletion of an addition amounting to Rs.3,60,88,611, attributed to unsecured loans that were treated as unexplained cash credits by the Assessing Officer.
The Tribunal, after careful consideration of the submissions and the materials presented on record, concurred with the Commissioner of Appeals’ decision. The Tribunal noted that the Assessing Officer had accepted major reconciliations provided by the assessee concerning the profit and loss account and the declared income, justifying only a minor difference. Additionally, regarding the unsecured loans, it was established that except for a nominal amount, all other loans were carried over from previous years and were adequately substantiated.
The Tribunal’s decision to dismiss the Revenue’s appeal highlights the importance of proper documentation and compliance by taxpayers in substantiating their financial statements and transactions. This case serves as a significant reference for understanding the judicial approach towards handling discrepancies in reported income and the treatment of unsecured loans under the Income Tax Act.
Order pronounced in the open court on 17/05/2023 by Shri Saktijit Dey, Judicial Member, and Shri M. Balaganesh, Accountant Member.
DCIT vs. Pummy Sahni: Detailed Analysis of ITA No. 1347/Del/2021 for Assessment Year 2016-17
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