ITO Vs Bhuvan Sharma (ITAT Delhi)
ITAT Delhi held that additions merely on the basis of presumption that assessee had earned undisclosed income without having concrete evidence is not sustainable in law and hence liable to be deleted. Accordingly, action of CIT(A) upheld and appeal of revenue dismissed.
Facts-The case of the assessee was selected for scrutiny through CASS and assessment was completed on 15.11.2019 at an assessed income of Rs. 2,93,35,390/-. On perusal of assessment order, it is observed that the addition was made on account of unexplained cash credit u/s. 68 of the Act and disallowance in respect of 20% of total debtors, amounting to Rs. 2,79,33,700/-. Accordingly, a sum of Rs. 2,79,33,700/- was added back to the income of the assessee.
CIT(A) allowed the appeal of the assessee. Being aggrieved, revenue has preferred the present appeal.
Conclusion- It is well settled law by the Hon’ble Supreme Court that in absence of supporting evidence, additions based merely on presumption that assessee had earned undisclosed income and incurred expenses outside books of account would not be sustainable.
Held that CIT(A) has rightly held that since AO has carried out additions under presumptions and without having concrete evidence for the same and he has not issued show cause notice which is in violation of principle of natural justice and thus the assessment order is liable to be quashed and hence, CIT(A) correctly deleted all the additions in dispute, which in our opinion, do not need any interference on our part, therefore, we affirm the finding of CIT(A) in deleting all the additions.
