ACIT, NEW DELHI vs. SH. VIKAS GUTGUTIA, NEW DELHI

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ITA 862/DEL/2014Status: DisposedITAT Delhi07 April 2021AY 2006-076 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the addition made by the Assessing Officer was unjustified as the assessee had already offered a larger sum to tax from the same business. Accepting seized material in part and rejecting it in part is not permissible.

What were the facts?

During a search, documents related to a handicraft business were seized. The Assessing Officer made an addition of Rs. 50,30,610/- for unexplained capital and liabilities from this business. The assessee claimed this constituted double addition as they had already disclosed a higher amount as profit from the business.

What were the issues?

Whether an addition can be made on the basis of seized documents when the assessee has already disclosed a higher amount as income from the same source, leading to a potential double addition.

Which sections of the Income-tax Act were involved?

Section 132(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH, ‘D’: NEW DELHI

Before: SHRI R.K. PANDA & MS. SUCHITRA KAMBLE

For Respondent: Ms. Ashna, CIT-DR
Hearing: 30.03.2021Pronounced: 07.04.2021

order of the learned CIT(A) in deleting the addition on this issue. We find merit in the arguments advanced by the learned counsel for the assessee that whenever any document is found and seized during the course of search, the same has to be accepted in toto or be rejected in toto and the same cannot be partly accepted and partly rejected. A perusal of the material available on record shows that the assessee has already declared profit of Rs.79,65,515/- on account of new business in the return of income, although, the assessee had disclosed a sum of Rs.1,10,00,000/- on the ground that the differences were due to certain adjustment of mandi creditors. Further, the learned CIT(A) had already sustained an amount of Rs.30,34,485/- being difference between the amount disclosed of Rs.1,10,00,000/- and the ultimate surrender of Rs.79,65,515/-. We, therefore, find merit in the arguments of the learned counsel for the assessee that since, the amount of Rs.79,65,515/- has already been offered to tax in the return of income on account of handicraft business, therefore, the addition of Rs.50,30,610/- again on the basis of same Annexure A-5 will amount to double addition. We, therefore, do not find any infirmity in the order of the learned CIT(A) in deleting the addition. Accordingly, the ground of appeal no. 5, raised by the Revenue is dismissed.

10.

In the result, ground of appeal no.2 raised by the assessee is dismissed as ‘withdrawn’ and ground of appeal no.5 raised by the Revenue is dismissed.

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