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2025 Supreme(Online)(ITAT) 7004
INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH)
SHRI VIMAL KUMAR, J
Vikas Jain – Appellant
Versus
Deputy Commissioner of Income Tax – Respondent
Income Tax Appeal | ITA No. 208/Del/2022
For the Appellants/Petitioners: Ms. Priyanka Garg, Shri Deepchand Garg
For the Respondents: Shri Sanjeev Kaushal
Procedural fairness and adherence to evidence standards are critical in assessments under the Income Tax Act.
Headnote:This judgment concerns an appeal against the order of the Learned Commissioner of Income-Tax (Appeals) confirming the action of the Assessing Officer under Section 153C of the Income Tax Act, 1961. The court analyzed the validity of the assessment proceedings based on the alleged unexplained expenditure of Rs. 24,50,000. The findings highlighted that the Assessing Officer's reliance on a satisfaction note from a search that lacked corroborative evidence violated legal standards. The issues revolved around procedural compliance in assessing unexplained income and failure to provide necessary documentation, emphasizing the importance of Section 65B of the Evidence Act in admitting electronic evidence. The appeal was ultimately allowed, with the Tribunal setting aside the previous orders.
| Table of Content |
|---|
| 1. assessment initiated post-search. (Para 1 , 2) |
| 2. unexplained expenditure based on incomplete documentation. (Para 3 , 4) |
| 3. alleged violations of natural justice in tax assessment. (Para 5) |
| 4. requirement for substantiating claim of cash payments. (Para 6 , 7) |
| 5. reliance on evidence missing necessary verification. (Para 8) |
| 6. conclusion favoring the appellant's claims. (Para 9 , 10) |
ORDER
PER VIMAL KUMAR, JUDICIAL MEMBER:
The appeal filed by assessee is against order dated 14.08.2023 of Learned Commissioner of Income-Tax (Appeals)-29, New Delhi (hereinafter referred as “the Ld. CIT(A)”) under Section 250 of the Income Tax Act, 1961 ( hereinafter referred as “the Act”) arising out of assessment order dated 24.03.2022 of the Learned Assessing Officer/Deputy Commissioner of Income Tax, Central Circle, 28, Delhi (hereinafter referred as “Ld. AO") under Sections 153C of the Act for assessment year 2017-18.
2. Brief facts of case are that search and seizure operation under Section 132 of the Act was carried out at Seven Seas Hospitality Pvt. Ltd. (SSHPL) Group of Cases on 03.05.2018. Documents/incriminating material related to the person other than the searched person were found. Notice under Section 153C of the Act dated 05.02.2021 was issued and served upon the assessee by the Central Circle-30, Delhi. In pursuance of order under Section 127 of the Act dated 02.02.2022 passed by the Ld. PCIT, Central-3, New Delhi, the jurisdiction over the case assigned to the Ld. AO. Due to change of jurisdiction, notice under Section 129 of the Act dated 09.02.2022 was issued to assessee requesting for compliance of notice under Section 153C of the Act dated 02.02.2022. Assessee filed ITR declaring income of Rs.4,35,300/-. Notice under Section 143(2) of the Act dated 17.03.2022 was issued to Assessee. From the analysis of the same, it is gathered that in the image there is estimate of function organized by Vikas Jain on 16.03.20217 and the same was centralized to M/s. Seven Seas Hospitality Pvt. Ltd. During search action, cheque as well as cash was received as advance by M/s. Seven Seas Hospitality Pvt. Ltd. The document clearly shows that for the function of the assessee, M/s Seven Seas Hospitality Pvt. Ltd. (SSHPL) had made a contract of Rs.30,57,500/- out of which Rs.6,07,500/- was paid by cheque and the rest amount of Rs. 24,50,000/- was paid as cash. When the cheque amounting to Rs.6,07,500/- as mentioned in the document was accepted then the transaction of cash part of Rs.24,50,000/- also stands verified. M/s Seven Seas Hospitality Pvt. Ltd. (SSHPL) used to receive cash from the customers and same would not have been accounted for in the books of account, In this case, a function was scheduled to be held on 16.03.2017 in M/s Seven Seas Hospitality Pvt. Ltd. (SSHPL) for a total package of Rs.30,57,500/- (Rs.29,50,000/-+ Rs.1,07,500/- (taxes)). This fact is clearly mentioned in the incriminating document found in the possession of searched person. According to the same, the assessee had to pay total amount of Rs.30,57,500/-including taxes for the scheduled function to be held on 16.03.2017 out of which an amount of Rs.6,07,500/- was paid through cheque from the Bank Account of the assessee. In response to the specific query (cash payment made to SSHPL) raised vide notice u/s 142(1) of the Act dated 16.03.2022, assessee vide its letter dated 17.03.2022 has stated that "there is no function held by the assessee on 16.03.2017 as alleged. However a function was held on 04.03.2017 on the function of marriage of assessee himself. It is submitted that assessee, Vikas Jain got married on 04.03.2017 with Ms Suchna Jain D/o Santosh Kumar Bhansali and Suman Bhansali and a marriage function was held on 04.03.2017. For the same function held on 04.03.2017, an invoice bearing no. 5987 at Book No. 120 dated 16.03.2017 of Rs. 6,07,500/- was raised by Seven Seas Hospitality Private Limited and the same has been paid by cheque no. 0302405 throu
