DCIT Vs Vinay Chandra (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT) has ruled in favor of the taxpayer in the case of DCIT vs. Vinay Chandra, effectively dismissing the revenue’s appeal concerning an addition made under Section 69A of the Income Tax Act. The tribunal’s decision highlights the importance of adhering to due process and the necessity for revenue authorities to substantiate any claims regarding undisclosed income.
Background of the Case
The appeal was directed against the order issued by the Commissioner of Income Tax (Appeals) [CIT(A)] via the National Faceless Appeal Centre (NFAC), dated March 8, 2024. This case pertains to the assessment year 2017-18, stemming from an assessment order dated December 16, 2019, completed under Section 143(3) of the Income Tax Act, 1961.
The taxpayer, an individual with income derived from house property, long-term capital gains, and other sources, filed a return showing an income of ₹25,03,760. This return included a deduction of ₹3,21,177 under Chapter VI-A. Following the selection of the case for limited scrutiny through the Computer Aided Scrutiny Selection (CASS) system, the Assessing Officer (AO) issued a notice under Section 143(2) on August 13, 2021. After reviewing the case, the AO completed the assessment and made an addition of ₹2,90,00,000, categorizing it as unexplained income from undisclosed sources under Section 69A.
Findings of the CIT(A)
Dissatisfied with the AO’s addition, the taxpayer filed an appeal with the CIT(A). The CIT(A) conducted a detailed examination of the case and noted several important points. He emphasized that the AO had accepted both the sale of the property and the subsequent purchase of a new property, as evidenced by the relevant property deeds submitted by the taxpayer.
