Case Law Details
Siddharth Mehta Vs ITO (ITAT Delhi)
In a significant judgment, the Income Tax Appellate Tribunal (ITAT) in Delhi ruled in favor of Siddharth Mehta in the case against the Income Tax Officer (ITO). The crux of the matter revolved around a cash deposit of Rs 29,00,000 in Mehta’s bank account, which was scrutinized under the Income-tax Act, 1961. This detailed analysis explores the tribunal’s rationale and its implications on the interpretation of unexplained cash credits under Indian tax law.
Detailed Analysis: The case, ITA No.2656/Del/2023, emerged from an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi. The appeal challenged the addition of Rs 29,00,000 to Mehta’s income, classified as an unexplained cash deposit by the ITO, Ward-2(2)(3), Ghaziabad.
The primary grounds of the appeal included the legality of the notice issued under section 148 of the Income Tax Act, the validity of the assessment reopening, and the merits of the cash deposit being unexplained credit.
Upon examination, ITAT Delhi found that Mehta had indeed sold a property for Rs. 43 lakhs, receiving part of the sale consideration in cash (Rs. 29 lakhs) and the rest via cheque. The discrepancy in the registered sale deed amount and the actual transaction led to suspicion from the income tax authorities.
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