The Income Tax Appellate Tribunal (ITAT) New Delhi, has dismissed an appeal by the revenue finding it as an ‘unnecessary litigation’ and has asked the Central Board of Direct Taxes (CBDT) to take due care before approving filing of such appeals.
The assessee Pratap Singh Solanki is a salaried class person working in Delhi Jal Board and had filed a return of income declaring an income of Rs.6,82,860. During the scrutiny proceedings, Assessing Officer (AO) noticed some interest income from the bank and unexplained income and called upon the assessee to explain the same. AO made the first addition of Rs.5,25,00,000 on account of sale consideration of a plot in Dwarka, New Delhi. On failure of the assessee to explain this receipt, AO made addition thereof under section 68 of the Income-tax Act, 1961. The AO also made addition of Rs.1,07,77,270 on the failure of the assessee to explain the credit entry appearing in his bank account and thereby assessed the total taxable income at Rs.6,41,27,810. The assessee carried the matter before the Commissioner of Income Tax, Appeals (CIT(A)) who deleted the additions made by the AO. This aggrieved the revenue to approach the ITAT.
Judicial Member Kuldip Singh and Accountant Member N.K. Billaiya while dismissing the appeal of the Revenue Department observed, “When all the documents were placed before the AO who has not taken note thereof for the reasons best known to him particularly when AO has not raised any objection to the documents sent to him for comment, the ld. CIT (A) was well within his right to decide the controversy by examining all the documents himself. When the assessee has been found to be eligible u/s 54 qua his capital gains which have been duly explained by virtue of the sale deed qua the property in question, bank statements and sale deed of the new residential property purchased with the capitals gains received the ld. CIT (A) has rightly and legally deleted the additions by accepting the appeal. Finding no illegality or perversity in the impugned order passed by the ld. CIT (A), the present appeal filed by the Revenue is hereby dismissed. However, before parting with this order, it is necessary to bring on record, to be taken care of by the CBDT, that the present appeal has been filed just to generate unnecessary litigation without examining well-reasoned findings returned by the ld. CIT (A) which can be curtailed if proper scrutiny/vetting by the senior officers, who are at the helms of the affairs, is made before approving any case for filing appeal before a higher forum.”