ACIT Vs Daya Rani (ITAT Delhi)
In the case of ACIT Vs. Daya Rani, the Income Tax Appellate Tribunal (ITAT) addressed an appeal filed by the Revenue against the order issued by the Commissioner of Income Tax (Appeals)-3, Noida, regarding the assessment under sections 153A/143(3) of the Income Tax Act, 1961 for the Assessment Year 2019-20.
The Revenue raised two primary grounds in its appeal:
- The deletion of an addition of Rs. 89,70,600/- made by the Assessing Officer (AO) under section 68 of the Income Tax Act, 1961, concerning unexplained capital enhancement.
- The reliance placed by the Commissioner of Income Tax (Appeals) on a judgment of the Supreme Court in the case of PCIT Central-3 vs. Abhisar Buildwell Pvt. Ltd, while the Revenue argued that another judgment by the same court should have been considered.
The case originated from a search and seizure action conducted at the premises of M/s PS Enterprises and other related cases. The assessee, Daya Rani, filed her income tax return declaring Rs. 18,65,140/-. Upon scrutiny of the balance sheet of M/s Parasnath Iron Traders, in which Daya Rani is a proprietor, the AO noted an addition towards capital of Rs. 89,70,600/-. The assessee explained that a portion of this amount was transferred from the personal balance sheet through book entries, while the rest was paid in cash from her opening cash balance.
