SUBHASH GUPTA vs. DCIT, CENTRAL CIRCLE, DEHRADUN

Facts

The assessee is appealing an order of the Income Tax Appellate Tribunal (Tribunal) for Assessment Year 2014-15. A search under Section 132 of the Income Tax Act was conducted on 21.11.2013, leading to a notice under Section 142(1). The assessee initially declared an income of Rs. 25,23,790/- and later revised it, surrendering Rs. 3723/-. During the search, Rs. 20,45,000/- cash was found in the assessee's locker. The Assessing Officer (AO) did not accept the assessee's explanation for the cash and made an addition of Rs. 20,45,000/-. The Commissioner (Appeals) partially allowed the appeal, treating Rs. 16,00,400/- as explained and Rs. 4,45,000/- as unexplained. The Tribunal, in its order dated 05.01.2023, further reduced the unexplained income by estimating Rs. 1,00,000/- from professional income as part of the cash, treating Rs. 17,00,400/- as explained.

Held

The High Court held that no substantial question of law arises for consideration in the present appeal. The court observed that the orders passed by the Assessing Officer, Commissioner of Income Tax (Appeals), and the Tribunal involved a mere computational exercise. The Tribunal had considered the assessee's professional income of Rs. 9,96,750/- and expenses of Rs. 4,42,680/-, and based on this, an amount of Rs. 1 lakh was assessed as undisclosed income (Rs. 20,45,000/- minus Rs. 17,00,400/-). The court found this to be a factual determination and not a question of law. Therefore, the appeal was dismissed.

Key Issues

1. Whether the Tribunal erred in its computation of the unexplained income, considering the professional income and expenses of the assessee (mixed question of law and fact, turning on Section 143(3) and Section 132 of the Income Tax Act). Assessee's contention: The assessee argued that the cash found in the locker pertained to their professional income. The Tribunal's estimation of Rs. 1,00,000/- as unexplained income, after considering professional income of Rs. 9,96,750/- and expenses of Rs. 4,42,680/-, was part of a computational exercise. The appeal was filed to challenge the Tribunal's final determination. Revenue's contention: The judgment does not record any specific contentions made by the Revenue before the High Court. The Tribunal's order itself noted that the cash of Rs. 4,45,000/- was not supported by cogent documentary evidence and was considered unexplained by the revenue.