The Delhi High Court has held that the addition of unexplained cash based on a single document is not permissible.
The Revenue challenged the order dated 05th October 2018 passed by Income Tax Appellate Tribunal ( ITAT ) in ITA No. 5957/DEL/2015 and C.O. NO. 38/DEL/2016 for the Assessment Year (‘AY’) 2007-08.
It was contendedthat ITAT erred in deleting the addition of Rs.34,06,11,102/- without analysing and considering the contents and the words of the seized document, identified in the appeal. As per the said Seized Document the Vasant Square Mall was acquired by Vinita Chaurasia, the Assessee for Rs.32,85,37,354/- before 1st October 2006, which was undisclosed in the Income Tax Return (‘ITR’) of the Assessee.
The Assessment order was passed by the Assessing Officer (‘AO’) under Section 147 read with 143(3) of the Income Tax Act. The original return was filed on 31st July 2007 under Section 139(1) of the Income Tax Act, 1961 (‘the Act’) declaring a total income of Rs.4,70,97,930/-. There was a search and seizure operation on 29th April 2008 and in consequence thereof, the reassessment had been completed under Section 153A read with Section 143(3) of the Income Tax Act at the returned income of Rs.4,70,97,930/- vide order dated 29th December 2010.
The ITAT has held that the additions made by the AO are factually incorrect, illegal and arbitrary. Furtherobserved that the entire basis of the AO for making the additions to the assessable income of the Assessee isa single document andno fresh material has been taken into account by the AO for reopening the assessment under Section 147 of the Act.
Given the factual finding returned by ITAT in the assessment proceedings to the effect that no fresh material was taken into account by the AO for making additions in the present proceedings and the sole basis for making the additions was the Seized Document.
While dismissing the appeal filed by the revenue, the Court comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora upheld the finding of the ITAT.
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