Rajesh Jain Vs DCIT (ITAT Mumbai)
Summary: The Income Tax Appellate Tribunal, Mumbai Bench, disposed of cross-appeals arising from the common order dated 25.08.2023 of CIT(A)-52, Mumbai, concerning AYs 2018-19 to 2021-22. The assessee, engaged in mobile accessories business under M/s Raj Telecom, was searched under section 132 of the Act following search and seizure operations in the Rubberwala Group. Documents found with the group recorded alleged cash receipts outside the books for 21 shops in “Platinum Mall”, aggregating to Rs.5,21,01,155/- for FYs 2017-18 to 2020-21.
The Assessing Officer treated the entire year-wise amounts as unexplained investment under section 69 in the assessee’s hands. The assessee contended that only Shop No.36 had been purchased in his name and that the other shops belonged to family members or other persons independently assessed to tax. The CIT(A) accepted this contention, sustaining only Rs.18,64,200/- for Shop No.36 in AY 2020-21 and deleting the remaining additions. The Revenue challenged that relief for all four years, while the assessee challenged the surviving AY 2020-21 addition. In AY 2021-22, both sides also challenged the CIT(A)’s treatment of a stock-shortage addition.
For AYs 2018-19 and 2019-20, the Tribunal held that unaccounted investment is assessable in the hands of the person who actually made the investment. Since the other shops were purchased by different persons who were separately assessed to tax, and it was not shown or proved that the assessee funded their cash payments, the Tribunal agreed that any enquiry or action concerning such payments had to be against the respective purchasers. It accordingly upheld deletion of the additions on merits.
