ACIT Vs B.L. Agrawal (Chhattisgarh High Court)
Facts of the case
On February 4, 2010, a search under Section 132 was conducted at the premises of Shri B.L. Agrawal. The Revenue alleged that unaccounted income was routed through 230 bank accounts, shell companies, and villagers from Kharora into M/s Prime Ispat Ltd., a company linked to the assessee’s relatives. Protective additions were made under Sections 69-A and 69-C, which were later deleted by the CIT(A) and ITAT due to lack of direct evidence and a retracted statement by a Chartered Accountant. However, the Chhattisgarh High Court set aside these deletions, holding that the authorities failed to properly assess the evidence and noting the use of a colorable device to conceal income. The Court upheld the Revenue’s position and remanded the matter to the CIT(A) for fresh consideration.
Legal Issues
Whether the conditions for invoking Sections 69A (unexplained investments) and 69C (unexplained expenditure) were satisfied in the present case.
High court’s findings and judgement
The Court set aside the orders of the ITAT and CIT(A) which had deleted protective additions made under Sections 69-A and 69-C following a search at Shri B.L. Agrawal’s premises. The Revenue had alleged that unaccounted income was routed through shell entities and villagers into Prime Ispat Ltd., linked to the assessee. The High Court found that the lower authorities failed to consider crucial evidence, including statements of key individuals and the structured scheme of fund routing. It held that the retraction of a CA’s statement did not outweigh corroborative material and restored the protective additions, remanding the matter to the CIT(A) for fresh consideration in accordance with law.
