ACIT Vs Swapna Mohan (ITAT Delhi)
ITAT Delhi held that addition towards undisclosed income merely on the basis of conjectures cannot be sustained in the eye of law. Further, also held that addition purely based on post-dated cheques cannot be sustained.
Facts- A search action was carried out by the Economic Offence Wing CID, Bangalore on 05.08.2015 on M/s PSIK Finance Solutions Pvt. Ltd. group. Based upon that, search u/s 132A of the Income-tax Act, 1961 was also carried out on the residential premises of the assessee on 08.08.2015. As per AO, various material/documents were found and seized and statements of various persons were also recorded. AO further noticed that the assessee filed original return of her income u/s 139(1) of the Act on 26.09.2016 declaring total income at Rs. 5,93,910/- which was processed u/s 143(1) of the Act. Thereafter, AO proceeded to frame assessment u/s 143(3) of the Act. Thereby he made addition on account of unexplained investment of Rs. 2,45,00,000/- and assessed income at Rs. 2,50,93,910/-.
CIT(A) deleted the addition. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that the law is well settled that the addition made on the basis of conjectures cannot be sustained in the eye of law. CIT(Appeals) has rightly followed the decision of the co-ordinate Bench [ITA nos. 374-375/Ahmd/2002] that no addition can be made purely on the basis of post-dated cheques. In the case in hand impugned addition has been made on the basis of the post dated cheques recovered from the possession of the assessee. The explanation offered by the assessee is not controverted by the AO. Moreover, the AO has failed to establish any link of post dated cheques with undisclosed income of the assessee. In the absence of such nexus or link it cannot be construed that such cheques related to some unexplained income of the assessee. Therefore, we do not see any infirmity into the finding on fact recorded by the learned CIT(Appeals). The same is hereby upheld. The grievance raised by the Revenue lacks merit, hence dismissed.
