PCIT Vs Tarun Kumar Goyal (Telangana High Court)
The appeal was filed by the Revenue under Section 260A of the Income Tax Act, 1961, challenging the order of the Income Tax Appellate Tribunal (ITAT) dated 20.04.2021 for the Assessment Year 2016-17. The Revenue questioned the Tribunal’s decision deleting an addition of ₹6,40,00,000 that had been made on the basis of material seized during a search under Section 132.
Background of the Casevs
The respondent, an individual assessee, was assessed under Section 143(3) read with Section 153A following search and seizure operations conducted in the case of M/s. Western Constructions, its partners, and related group entities. The Assessing Officer added ₹6.40 crore to the assessee’s returned income, treating it as unexplained and unreconciled cash investment allegedly admitted during the search.
The assessee’s appeal before the Commissioner of Income Tax (Appeals) was dismissed. Thereafter, the assessee approached the Income Tax Appellate Tribunal, which allowed the appeal and deleted the addition. The Revenue challenged that decision before the High Court.
Tribunal’s Findings
Reliance on Seized Material
The Tribunal found that the addition was based solely on a loose Excel sheet allegedly showing cash payments over and above the sale consideration in connection with a project of M/s. Western Constructions. The Revenue relied upon the partner’s statement and the seized document, contending that the presumptions under Sections 132(4) and 292C applied.
