The Income Tax Appellate Tribunal (ITAT), Bangalore Bench deleted the addition against Union Minister, D. V. Sadananda Gowda.
The assessee, D. V. Sadananda Gowda is an important public figure. For the assessment year 2011-2012, the return of income was filed declaring total income of Rs.5,41,570. There was a search and seizure action under section 132 of the Income Tax Act in the corporate office of M/s.RNS Infrastructure Limited.
During the course of the search, certain incriminating materials were seized including deleted data retrieved from the seized computer server by using forensic tools. According to the A.O., the deleted data represents systematic and comprehensive day to day recordings including “sundry payments”. This “sundry payment”, according to the A.O., are made outside the books of account submitted along with return of income and one such recipients of the payment from RNSIL was the assessee.
According to the A.O., there was reason to believe that an amount of Rs.1 crore chargeable to tax has escaped assessment within the meaning of section 147. Hence, the assessment was reopened by issuance of notice under section 148 of the I.T.Act. The assessment under section 143(3) read with section 147 was completed vide order, wherein the AO held that RNSIL is a leading contractor, which had executed several Government contracts for building roads, bridges, canals etc. in the State of Karnataka.
During the course of search and seizure, several incriminating material was unearthed pointing out unaccounted income being paid to public servants and bureaucrats. It was further held by the AO that jottings in the handwriting of Vice President, RNSIL, clearly shows that these payments were made outside the books of account and assessee was also beneficiaries of such payment.
The assessment was concluded by making an addition of Rs.5 lakh, which according to the AO, was received by the assessee from RNSIL during the course of relevant assessment year.
The coram of George George K deleted the addition of Rs.5 lakh made by the Income Tax Authorities.
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