This case involves a dispute regarding the addition of income from undisclosed sources under Section 69 of the Income-Tax Act, 1961, where Puran Sharma, the appellant, contested the addition of Rs.15,23,438 as undeclared income.
Puran Sharma, a resident of Faridabad, faced an assessment order for the year 2012-13 concerning cash deposits totaling Rs.50,40,000. These deposits, according to the Income Tax Officer (ITO), were made into his savings bank account at the Oriental Bank of Commerce. The ITO reopened the assessment citing discrepancies in reported and observed transactions.
The ITO requested explanations for the source of the cash deposits. Sharma responded that the money was from prior withdrawals and property sales. Despite his explanations, the ITO found a mismatch in the total amounts of withdrawals and deposits, leading to the addition of income from undisclosed sources.
The case was brought before Shri Saktijit Dey, Judicial Member of the ITAT, Delhi Bench. After reviewing the provided bank statements and additional evidence showing withdrawals not accounted for by the ITO, the Tribunal concluded that there was a significant oversight in the assessment process. The previously unaccounted withdrawals reconciled the discrepancy between Sharma’s declared transactions and the ITO’s findings, leading to the removal of the added income.
The Tribunal’s decision highlighted the importance of thorough and accurate assessment in tax proceedings and upheld the legitimacy of Sharma’s financial declarations, resulting in the appeal being allowed and the added income being deleted from his record.
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