DCIT Vs Mehfooz Khan (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, dismissed the Revenue’s appeal and upheld the order of the Commissioner of Income Tax (Appeals) [CIT(A)] deleting additions made under Sections 69 and 153A of the Income-tax Act for Assessment Year 2018-19. The Tribunal held that the additions were not supported by incriminating material found during the search.
The case arose from a search and seizure operation conducted under Section 132 in the Tyagi Group on 16 May 2018, during which the assessee was also covered. Following the search, the Assessing Officer (AO) completed the assessment under Section 153A read with Section 143(3), determining the total income at Rs. 6,43,79,840/-. The CIT(A) partly allowed the assessee’s appeal by deleting three additions challenged by the Revenue before the Tribunal.
The first addition of Rs. 2,83,50,000/- under Section 69 was made on account of alleged unexplained investment in immovable property based solely on a copy of a registered sale deed found during the search. The CIT(A) noted that the assessee had produced all documents relating to the property purchase, including confirmations from lenders, bank statements and PAN details establishing the identity, creditworthiness and genuineness of the loan transactions. The AO neither issued notices to verify the lenders nor brought any corroborative material to disprove the evidence produced by the assessee. The CIT(A) further held that a registered sale deed is a public document open to public inspection and, by itself, could not be treated as incriminating material. Since the assessment for the relevant year had already been completed, additions could not be made in the absence of incriminating material. The Tribunal agreed with these findings and upheld the deletion of the addition.
