This detailed analysis explores the contentious legal battle involving Kapil Mehta and the PCIT(Central)-3, New Delhi, regarding the assessment year 2017-18. This case highlights critical issues surrounding the unexplained cash deposits of Rs. 2 Crores and the tax implications therein.
The dispute centers on a tax assessment order passed under section 263 of the Income Tax Act, 1961, which the appellant, Kapil Mehta, challenged. The core of the controversy pertains to the source of Rs. 2 Crores in cash, which the Income Tax Department argued was unaccounted for, leading to a search and seizure operation.
The Tribunal’s exhaustive review of the case led to a confirmation of the PCIT’s revision order, mandating a fresh examination of the claimed agricultural income origins of the cash deposit. The decision elaborates on the deficiencies in the original assessment, particularly the failure to conduct adequate inquiries into the nature and source of the cash.
The judgment underscores the importance of thorough documentation and compliance with procedural norms in tax assessments. It illustrates the complexities involved in cases where substantial amounts of cash are claimed as agricultural income, and the necessity for tax authorities to meticulously verify such claims to prevent tax evasion.
The article provides a comprehensive analysis of the legal arguments presented, the evidence considered, and the rationale behind the Tribunal’s decision to uphold the revisionary order under section 263 of the Income Tax Act.
Order pronounced in the open court on October 11, 2021.
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