PR. COMMISSIONER OF INCOME TAX (CENTRAL) - 2 vs. RENU NANDA

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ITA/562/2018HC DelhiDLHC01077367201814 May 2018Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises from the ITAT's order. The Court agreed with the lower appellate authorities that the assessee is not required to establish the source of the source of funds received, but rather only to demonstrate the genuineness of the receipt from an identified party. This reasoning is supported by the High Court's own prior judgments, including the dismissal of the Revenue's appeals for later years in similar cases involving the same assessee (ITA Nos. 527 and 529/2018). The Court also noted that the ITAT's deletion was consistent with the principle laid down in CIT v. Kabul Chawla (2016) 380 ITR 573, regarding assessments under Section 153A where no fresh material is recovered. Consequently, the appeal filed by the Revenue was dismissed. No issue was expressly left undecided.

What were the facts?

The appeal by the Pr. Commissioner of Income Tax (Central) - 2 challenges an order of the Income Tax Appellate Tribunal (ITAT) concerning assessment year (AY) 2001-02. The ITAT had deleted certain amounts that the Assessing Officer (AO) had brought to tax in the hands of the assessee, Renu Nanda. These amounts were received by the assessee from her husband. The AO's assessment was conducted under Section 153A of the Income Tax Act, 1961. The lower appellate authorities had granted relief to the assessee, noting that no fresh material was recovered during the search and seizure. The AO's addition was based on the husband's income source not being disclosed. The High Court noted that similar appeals for later years in ITA Nos. 527 and 529/2018 (Pr. Commissioner of Income Tax (Central-2) vs. Renu Nanda) were also dismissed.

What were the issues?

1. Whether, in the context of a Section 153A assessment, the addition of amounts received by the assessee from her husband is valid when no fresh material was recovered during search and seizure, and the source of the husband's income was not disclosed by the Revenue. (Question of law and mixed fact and law, turning on Section 153A). Assessee's Contentions: The assessee argued that the lower appellate authorities correctly granted relief. The ITAT's deletion was based on the finding that no fresh material was recovered during the search and seizure, which aligns with the High Court's decision in CIT v. Kabul Chawla (2016) 380 ITR 573. Furthermore, the assessee contended that she is not obligated to establish the source of her husband's income, only that the receipt from him is genuine. Revenue's Contentions: The Revenue argued for the addition of the amounts received by the assessee from her husband, primarily on the ground that the source of the husband's income or receipts was not made known.

Which sections of the Income-tax Act were involved?

Section 153A

AI-generated summary — verify with the full judgment below

$~54 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 562/2018 & CM APPL. 19739/2018

PR. COMMISSIONER OF INCOME TAX (CENTRAL) - 2 ..... Appellant

Through: Mr. Zoheb Hossain, Sr. Standing Counsel for Revenue.

versus

RENU NANDA

..... Respondent

Through:

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

14.05.2018

The Revenue’s appeal is directed against an order of the Income Tax Appellate Tribunal (ITAT) questioning the deletion of certain amounts brought to tax in the hands of the assessee for A.Y. 2001-02. The scrutiny assessment under Section 153A of the Income Tax Act, 1961 (hereafter referred to as ‘the Act’) concluded in the hands of the assessee whereby the Assessing Officer (AO) added certain amounts, received by her from her husband. The lower appellate authorities granted relief to the appellant holding that in the course of the search and seizure no fresh material had been recovered. This view is supported by the judgment of this Court in CIT v. Kabul Chawla, (2016) 380 ITR 573. Furthermore, the Court notices that the AO added this amount in the hands of the assessee on the ground that

the source of the assessee’s husband’s income or receipts was not made known. On this aspect, both the lower appellate authorities have ruled correctly that the assessee is not under an obligation to establish the source of the source and merely has to indicate that the receipt is genuine from an identified party. This Court has rejected the Revenue’s appeal for later years in ITA Nos.527 and 529/2018 [Pr. Commissioner of Income Tax (Central-2) vs. Renu Nanda]. In view of the above, the Court is of the opinion that no substantial question of law arises. The appeal is dismissed along with pending application.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J MAY 14, 2018 nn

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