41. CIT vs. Sant
Lal [2020] 423 ITR 1 (Del) Date of order: 11th March, 2020 A.Y.: 2002-03
Search and seizure – Assessment of third
person – Section 153C of ITA, 1961 – Undisclosed income – Assessment based
solely on statement of party against whom search conducted – A.O. not making
any further inquiry or investigation on information received from Deputy
Commissioner – No cogent material produced to fasten liability on assessee –
Concurrent findings of fact by appellate authorities; A.Y. 2002-03
For the A.Y. 2002-03, the assessee declared
income from salary, house property and capital gains. On the basis of
information from the Deputy Commissioner that search and seizure conducted in
the premises of BMG revealed that BMG was engaged in hundi business
wherein previously undisclosed money was arranged from various parties
including the assessee, the A.O. issued a notice u/s 148 and passed an order
including the undisclosed cash transactions with the BMG group as unexplained
income u/s 69A which had escaped assessment.
The Commissioner (Appeals) deleted the
addition. The Tribunal confirmed the order of the Commissioner (Appeals) on the
ground that the issues in appeal were directly covered in its earlier
decisions.
On appeal by the Revenue, the Delhi High
Court upheld the decision of the Tribunal and held as under:
‘i) On the facts and the concurrent findings
given by the Commissioner (Appeals) and the Tribunal, it was evident that the
Department had not been able to produce any cogent material which could fasten
the liability on the assessee.
ii) The
Commissioner (Appeals) had also examined the assessment record and had observed
that the A.O. did not make any further inquiry or investigation on the
information passed on by the Deputy Commissioner with respect to the party in
respect of whom the search was conducted. No attempt or effort was made to
gather or corroborate evidence in respect of the addition made u/s 69A by the
A.O. No question of law arose.’
