Raghu Nath Arora Vs DCIT/ACIT (ITAT Dehradun)
Summary: The ITAT Dehradun disposed of six appeals involving Raghu Nath Arora, his spouse Meena Arora and son Virat Arora. Four quantum appeals concerned additions under Section 69A made in the hands of Raghu Nath Arora and Meena Arora for AYs 2020-21 and 2021-22. The additions were Rs.10,00,480/- and Rs.57,43,570/- in Raghu Nath Arora’s hands and Rs.88,70,170/- and Rs.1,05,49,351/- in Meena Arora’s hands. A search under section 132 had been conducted in the family’s cases on 07.02.2022 and the departmental authorities relied upon seized diary Annexure A-1 allegedly indicating unaccounted cash receipts and expenses.
The assessees relied upon the DVO’s report dated 18.11.2022, arising from a reference made on 12.05.2022 under section 142(A), which according to the Tribunal supported the declared sale/purchase prices of 36 properties by matching them with the corresponding fair market value. The Tribunal recorded that this factual position remained unrebutted by the Revenue and held that the additions could not be sustained as they went against the DVO report. It also relied upon Commissioner of Income-tax v. Dr. Indra Swaroop Bhatnagar, CIT Vs. D.M. Prunesh and Smt. B. Jayalakshmi vs. ACIT for the proposition that such a valuer’s report, or even a favourable remand report, is binding on the departmental authorities and the department could not be treated as an aggrieved party. Accordingly, the substantive grounds challenging the Section 69A additions were accepted and all four quantum appeals were allowed. In the remaining two appeals, Raghu Nath Arora and Virat Arora challenged penalties under Section 271B for failure to get their books of account audited. The Tribunal noted that counsel could not establish any explanation, much less a “reasonable” cause, for the failure to obtain audit due to circumstances beyond their control. It therefore declined to interfere with the lower authorities’ findings and dismissed both penalty appeals.
