DCIT Vs ECR Buildtech Pvt. Ltd. (ITAT Delhi)
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) allowed the Revenue’s appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Year 2021-22, restoring an addition of ₹1,43,95,419 made by the Assessing Officer (AO) on account of alleged unexplained salary paid in cash.
The assessee, engaged in the business of construction and infrastructure activities, was subjected to a search and seizure operation under Section 132 on 10.01.2023. During the search, loose papers and other documents relating to the assessee were seized. According to the AO, these documents indicated that the assessee had made salary and other payments in cash. The AO also relied on the statement of one of the company’s directors recorded under Section 132(4), wherein the director had admitted that salary had been paid in cash in certain cases. On this basis, the AO made an addition of ₹1,43,95,419.
The CIT(A) deleted the addition after considering the papers and submissions filed by the assessee during the appellate proceedings. However, the Revenue contended before the Tribunal that the CIT(A) had deleted the addition without conducting any further enquiry, without verifying the material relied upon by the assessee, and without obtaining a remand report from the AO.
