DCIT Vs Navin Hanumanprasad Bagadiya (ITAT Pune)
The Revenue appealed against the order of the Commissioner of Income Tax (Appeals), Pune-12, for Assessment Year 2014-15, challenging the deletion of an addition of ₹6,05,31,261 made under Section 69 of the Income-tax Act in proceedings under Sections 143(3) read with 153C. The addition related to alleged unexplained cash payments reflected in seized pocket diaries recovered during a search conducted on the Pride Group.
During the search conducted on 21 January 2020, pocket diaries containing handwritten cash transactions were seized. The diaries were accepted as belonging to the Manjeet Disha Group by its Head Accountant, and Shri Devanand Narayan Kotgire (DNK), the key person of the group, also admitted ownership of the diaries. The entries recorded cash receipts and payments between DNK and the assessee over several financial years. Based on these entries, the Assessing Officer calculated a cumulative excess cash payment of ₹6,05,31,261 made by the assessee up to Financial Year 2013-14 and treated it as unexplained investment under Section 69, assessing the amount accordingly.
Before the Commissioner (Appeals), the assessee contended that the transactions were business transactions and had already been accepted by DNK, who had owned up all transactions recorded in the seized diaries. The assessee relied on DNK’s affidavit, wherein he stated that all transactions recorded in the diaries belonged to him and that he had offered the related income for taxation. Accepting this contention, the Commissioner (Appeals) held that since the transactions had already been taxed in the hands of DNK, making the addition again in the assessee’s hands would amount to double taxation. The addition of ₹6,05,31,261 was therefore deleted.
