Rajesh Jain Vs DCIT (ITAT Mumbai)
The Mumbai Bench of the Income Tax Appellate Tribunal adjudicated Revenue appeals for A.Ys. 2018-19 to 2021-22 and assessee appeals for A.Ys. 2020-21 and 2021-22 arising from a common CIT(A) order dated 25.08.2023. The assessee, engaged in the mobile accessories business under M/s Raj Telecom, was subjected to search under Section 132 on 17.03.2021 along with search proceedings involving the Rubberwala Group. During the latter search, details of alleged cash payments received outside the books for 21 shops in Platinum Mall were found. The AO treated Rs.5,21,01,155 as unexplained investment under Section 69 across A.Ys. 2018-19 to 2021-22.
The CIT(A) found that the assessee had purchased only Shop No.36, while the other shops were purchased by family members or other persons who were independently assessed to tax. Accordingly, the CIT(A) deleted the additions relating to the other shops and sustained only Rs.18,64,200 for the cash component attributed to Shop No.36 in A.Y. 2020-21.
For A.Ys. 2018-19 and 2019-20, the Tribunal upheld deletion of the additions. It noted that income or unexplained investment is generally to be assessed in the hands of the person who actually made the investment. There was no material establishing that the assessee had funded the cash payments relating to shops purchased by others. The Tribunal relied on the Supreme Court decision in ITO vs. Ch. Atchiah, which held that the tax authority must tax the right person.
