Case Law Details
Pawan Raj Goyal Vs DCIT (ITAT Delhi)
ITAT Delhi held that addition of unexplained money under section 69A of the Income Tax Act via rectification order passed under section 154 stating there was mistake apparent from record is based on surmises and conjectures and hence unsustainable.
Facts- Assessee has preferred the present appeal contending that CIT(A) has erred in sustaining additions of Rs. 10,00,626/- under section 69A of the Income Tax Act made by AO on account of cash found during the course of search and seizure operation as unexplained money by ad-hoc estimation of expenses incurred. Notably, impugned addition was made vide rectification order u/s 154.
Conclusion- Section 154 enables the AO to rectify a mistake apparent on record. A reading of the assessment order and the order u/s 154 nowhere speaks of any mistake which has occurred in the assessment order. The order passed by the AO is as if he is sitting into the shoes of ld. CIT and passing an order u/s 263 of the Act, which is not actually correct. How these additions of cash have been done u/s 154 claiming that there was a mistake apparent from record in the original order, is not borne out anywhere in the records.
In our considered opinion, this is solely on the basis of surmises and conjectures. The estimate of cash under the presumptive regime by the AO as well as ld. CIT (A) is flawed. The same is based on surmises and conjectures and the same is not sustainable on merits also. So, to conclude, this estimate of cash in order passed u/s 154 is jurisdictionally not permissible and secondly, on merits also, we note that the addition is based on surmises and conjectures which cannot be sustained. Accordingly, we direct that the addition of Rs. 10,00,626/- in this regard be deleted.
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