The Income Tax Appellate Tribunal ( ITAT ) Patna Bench has dismissed the appeals filed by the appellant and upheld the income tax additions made under Section 153A of the Income Tax Act, 1961. The tribunal ruled that the tax authorities were justified in making additions based on undisclosed income and unexplained investments found during a search and seizure operation.
The Income Tax Department conducted a search and seizure operation at the residence of Kumar Suman Singh,the appellant-assessee, under Section 132 on February 19, 2004. The search covered Singh and his associates.
The investigation revealed undisclosed income and substantial investments in movable and immovable properties. The department alleged that Singh had used multiple aliases(false names), such as Indrajeet Kumar and Ranjit Singh, to hide assets and evade taxes.
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Based on the findings, the Assessing Officer (AO) initiated proceedings under Section 153A and determined that the assessee had significant undisclosed income. The Commissioner of Income Tax (Appeals) CIT(A) upheld most of the additions. Dissatisfied with this decision, assessee filed an appeal before the ITAT Patna.
The ITAT dismissed the appeals and supported the tax authorities’ decision. The tribunal ruled that the search operation was based on credible information and led to the discovery of substantial unaccounted income. It found that the initiation of proceedings under Section 153A was legally valid.
The tribunal found strong evidence that the assessee had used fake identities, including Indrajeet Kumar and Ranjit Singh, to hide financial transactions. The ITAT agreed with the CIT(A)’s decision to merge the income of these identities with Singh’s taxable income.
The tribunal upheld the addition of Rs.7,59,520, which was originally assessed in the name of Indrajeet Kumar, as Singh’s taxable income. It also ruled that assessee failed to prove the genuineness of a Rs. 3 lakh gift from his grandmother. Since assessee could not provide credible proof, the amount was classified as unexplained income.
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The ITAT Bench composed of Sonjoy Sarma ( Judicial Member ) and Sanjay Aswathi ( Accountant Member ) found that the assessee had withdrawn insufficient funds for household expenses. It upheld the CIT(A)’s addition of Rs.64,000 on this basis.
In Conclusion,the appellant received partial relief for Assessment Year 2001-02. The ITAT Patna Bench reduced the addition related to low household withdrawals, lowering the disallowed amount to Rs.64,000 instead of the original Rs. 1 Lakh. However, the tribunal upheld all other major tax additions across multiple assessment years.
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