Mahesh Chandra Sharma Vs ACIT (ITAT Lucknow)
Summary: The ITAT Lucknow partly allowed four appeals filed by Mahesh Chandra Sharma and Usha Sharma for Assessment Years 2018-19 and 2019-20, principally concerning additions under Section 69 based on Tally data found during a survey at KLS Nursing College. The Assessing Officer treated entries appearing in the impounded data as unexplained cash loans allegedly advanced by the assessees to Kanchi Lal Shastri Smarak Sansthan.
A search under Section 132 had been conducted on 17.01.2019 in the Dr. M.C. Sharma, S.P.M. Hospital & Trauma Centre Group, while a survey at KLS Nursing College resulted in impounding electronic data containing Tally accounts. The Assessing Officer considered the entries as showing unsecured cash loans and invoked Section 69.
The Tribunal, however, found that the impounded ledger entries primarily represented payments for construction materials, contractors, electricians, labourers, plumbers and other expenses relating to the Trust. The data also contained a drawings account showing substantial cash payments. On examining the entries and the statement of Sunil Srivastava, the Tribunal found that fees collected by the nursing college were handed over to the assessees, who handled the Trust’s funds and incurred expenditure on its behalf.
The Tribunal held that there was no corroborative material showing that the assessees had unexplained income which was advanced to the Trust as cash loans, nor was there material showing that the Trust acknowledged any corresponding repayment liability. Consequently, the Section 69 additions of Rs.4,34,831/-, Rs.33,35,611/-, Rs.18,84,410/- and Rs.22,03,480/- were deleted as unsustainable.
