Harvinder Kaur Vs ACIT (ITAT Chandigarh)
Summary: The case of Harvinder Kaur vs. ACIT (ITAT Chandigarh) centered on additions made by the Assessing Officer (AO) under Section 153C of the Income Tax Act, 1961, following a search and seizure operation at the residence of Sh. Surinder Singh Bindra. The AO alleged undisclosed investments by the assessee, Smt. Harvinder Kaur, in a land purchase, based primarily on extrapolated figures from cloned mobile images. The AO determined that an additional purchase consideration of ₹2,28,57,080/- was paid for a plot in Village Aayali, Ludhiana. This resulted in additions of ₹1,56,25,000/- for AY 2017-18 and ₹50,32,068/- for AY 2018-19, alongside a cash seizure addition of ₹4,10,000/-. The Commissioner of Income Tax (Appeals) [CIT(A)] reduced the additions by 50%, acknowledging that half the plot belonged to the assessee’s father, Sh. Manjeet Singh, but upheld the remaining 50% as the assessee’s undisclosed investment. However, the assessee contested these additions, arguing that no statement was recorded from her at any stage, the land purchase was through a registered sale deed with documented payments, and the AO conducted no independent inquiry. The assessee also raised concerns about the reliability of the digital evidence and the arbitrary extrapolation of figures, and highlighted that the Prohibition of Benami Property Transactions Act (PBPT) proceedings yielded no adverse findings. The Income Tax Appellate Tribunal (ITAT) Chandigarh ruled in favor of the assessee, deleting the entire addition related to the alleged undisclosed investment and the cash seizure. The ITAT agreed with the assessee’s arguments that the additions were based on uncorroborated digital evidence. The tribunal noted the absence of any inquiry with the seller, the lack of adverse findings in the Benami Act proceedings, and the arbitrary extrapolation of figures from the mobile images. The ITAT emphasized that the land purchase was through a registered sale deed, with documented payments, and that the AO’s reliance on mere mobile images without corroborative evidence was unjustified. Furthermore, the ITAT dismissed the cash seizure addition, accepting the assessee’s explanation that the seized cash represented household savings from various family members who were all income tax return filers. The ITAT cited several judicial precedents, including K.P. Varghese v. ITO and Common Cause, to support its decision that uncorroborated digital evidence and extrapolated figures cannot form the sole basis for additions. The tribunal concluded that the CIT(A) erred in upholding part of the additions, and allowed the assessee’s appeals, deleting the entire disputed amounts.
