The case number ITA 810/DEL/2019 involves the appellant, DCIT Central Circle-2, Faridabad, and the respondent, Upright Enterprises Pvt. Ltd, Faridabad. This case pertains to the assessment year 2014-15, with the final tribunal order pronounced on August 28, 2019. The appeal was filed on February 4, 2019.
DCIT Central Circle-2, Faridabad filed an appeal against the order dated November 26, 2018, passed by the Commissioner of Income Tax (Appeals) [CIT(A)]-16, New Delhi, relating to the assessment year 2014-15. The appeal was heard by the Delhi Bench ‘Friday-A’ of the Income Tax Appellate Tribunal (ITAT), comprising Shri H.S. Sidhu, Judicial Member, and Shri Anadee Nath Misshra, Accountant Member.
The primary issue in this appeal was the addition of unaccounted income allegedly received by Upright Enterprises Pvt. Ltd. The addition was based on statements recorded during a search operation and ledger accounts showing cash transactions.
A search operation was conducted at Ahmadabad and New Delhi, revealing an unaccounted money lending business involving several entities. Documents found during the search indicated several beneficiaries, including Upright Enterprises Pvt. Ltd. Statements from various individuals highlighted the involvement of various parties in cash loan transactions.
The Assessing Officer (AO) received information from the Investigation Wing about cash loans disbursed by certain individuals, identifying Upright Enterprises Pvt. Ltd as one of the beneficiaries. Based on this information, the AO assumed jurisdiction under section 148 of the Income Tax Act and issued statutory notices to Upright Enterprises Pvt. Ltd.
The appellant’s counsel relied on a similar case, M/s Shagun Jewellers (P) Ltd. vs ACIT, where the ITAT had ruled in favor of the assessee due to lack of direct evidence. The counsel argued that the addition was based on statements without corroborating evidence of actual cash transactions between Upright Enterprises Pvt. Ltd and the individuals involved.
The Departmental Representative (DR) supported the orders of the lower authorities, emphasizing the findings from the search operation and the statements recorded.
The tribunal noted that the facts and circumstances of the case were similar to the M/s Shagun Jewellers case. The ITAT had previously ruled that additions based solely on statements without corroborative evidence could not be sustained. The tribunal found that the AO had relied on statements without confronting the individuals involved and without direct evidence of cash transactions.
The tribunal referred to the detailed ledger accounts and statements, concluding that the addition was based on surmises and conjectures rather than concrete evidence. The tribunal emphasized the need for direct evidence linking Upright Enterprises Pvt. Ltd to the alleged cash loans.
In conclusion, the tribunal allowed the appeal filed by DCIT for statistical purposes. The tribunal directed the CIT(A) to reconsider the case, providing a fair opportunity for the appellant to present evidence and substantiate their claims.
The tribunal pronounced the order in the open court on August 28, 2019, directing the CIT(A) to re-evaluate the evidence and statements, ensuring a fair hearing for the appellant.
Sd/- (H.S. Sidhu) Judicial Member
Sd/- (Anadee Nath Misshra) Accountant Member
Dated: 28/08/2019
Copy forwarded to:
ASSISTANT REGISTRAR
ITAT, New Delhi
DCIT vs Upright Enterprises: Appeal Against Addition of Unaccounted Income for AY 2014-15
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