Heena Dashrath Jhanglani Vs ITO (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT), Mumbai Bench, recently set aside an addition of ₹ 42 lakh made to the income of Ms. Heena Dashrath Jhanglani, ruling in favor of the assessee. The Tribunal’s decision, delivered against an order of the Commissioner (Appeals)-3, Thane, for the assessment year 2007-08, highlighted critical procedural lapses by the tax authorities and the absence of conclusive corroborative evidence for the alleged “on money” payment.
Background of the Case
The assessee, Ms. Heena Dashrath Jhanglani, an individual, had filed her income tax return for the assessment year 2007-08 on February 29, 2008, declaring a total income of ₹ 1,70,480. This return was initially processed under Section 143(1) of the Income Tax Act, 1961.
The case took a new turn following a search and seizure operation conducted by the Income Tax Department on March 11, 2014, against the Hiranandani Group of Builders and Developers. During this operation, certain incriminating materials were seized. These materials allegedly indicated that Ms. Jhanglani had paid “on money” of ₹ 42 lakh in cash to M/s. Crescendo Associates, a concern within the Hiranandani Group, for the purchase of Flat No. 2404 at ‘Torino’.
Further, a statement under Section 132(4) of the Act was recorded from Shri Niranjan Hiranandani, a Director and Promoter of the Hiranandani Group. In this statement, Shri Hiranandani reportedly admitted to receiving “on money” in cash from buyers, over and above the registered value of flats.
