Harish Jain Vs ACIT (ITAT Jaipur)
The ITAT Jaipur recently adjudicated a case involving Harish Jain and the Assistant Commissioner of Income Tax (ACIT) concerning an addition of ₹55 lakh as undisclosed income. This dispute arose from a search operation conducted in September 2017 at the premises of Resonance Group, Kota, to which the appellant belongs. During the search, agreements related to a property transaction were seized, showing conflicting sale values. The Assessing Officer (AO) alleged that ₹55 lakh was paid in cash by Harish Jain, which was unaccounted for and added it to his income for the assessment year 2012-13.
Harish Jain contended that the ₹55 lakh payment was disclosed under duress during the search and later retracted. He argued that the second agreement, mentioning ₹40 lakh, was legitimate and supported by banking transactions. The AO dismissed this argument, citing the appellant’s role as CFO of the Resonance Group and his understanding of legal procedures. The Commissioner of Income Tax (Appeals) upheld the AO’s decision, citing Jain’s admission in the recorded statement.
Upon review, the ITAT noted that the property sale agreements from 2008 and 2011 were independent transactions. It highlighted the forced sale due to financial constraints faced by the seller and found no incriminating evidence of unaccounted cash payment by Harish Jain. Additionally, it referenced a Supreme Court ruling in Principal CIT vs. Abhisar Buildwell P. Ltd., which emphasized that no additions can be made without incriminating material in cases of completed assessments.
