Commissioner Of Income Tax … vs Chetan Gupta on 15 September, 2015

1. This appeal by the Revenue is directed against the order dated 21st
June 2013, passed by the Income Tax Appellate Tribunal (ITAT) in ITA
No.1891/Del/2012 for the Assessment Year (AY) 2001-2002.
Question of law
2. Admit. The question of law framed for consideration is:
Background facts
3. The Assessee, showing his address as “C/o Jagat Theatre,
Chandigarh”, filed a return of income for AY 2001-2002 with the
Income Tax Range-2, Chandigarh on 11th October, 2001 disclosing an
income of Rs.6,47,425. The return was processed under Section 143(1)
of the Act and an acknowledgement issued on 5th January, 2002.
4. Information was received from the Additional Director of Income Tax
Investigation (ADIT) Unit (VI), New Delhi by letter dated 27th
February, 2008, stating that the Assessee had been arrested on 17 th May,
2007 in FIR No.5 dated 23rd March, 2007, Police Station Vigilance
Bureau, Ludhiana pertaining to the Ludhiana City Centre Scam and a
pen drive had been recovered from him. The print outs from the pen
drive received by ADIT from the Punjab Vigilance Bureau were
forwarded to the Assessing Officer (AO) in Chandigarh. A perusal of
the print outs revealed that there were various entries in different names
pertaining to Financial Year (FY) 2000-2001. The information when
tabulated by the AO showed that there were credits of Rs.40,49,77,905
on which interest of Rs.7,35,49,141 had been paid. For the FY in
question a sum of Rs. 84,86,363 had been paid as interest. The Assessee
had failed to enclose a balance sheet with his return of income filed.
Apart from salary income, the Assessee had disclosed income from

house property on account of his half share in a property in Delhi and
some interest income. The AO therefore concluded that the Assessee
had not fully and truly disclosed all material facts for the AY in
question. The AO noted that in a statement dated 24th September 2007,
recorded by the ADIT (Inv.), Ludhiana, the Assessee denied knowledge
of the names appearing in the pen drive although he failed to deny that
the pen drive was recovered from his possession. The AO drew a
presumption that the information in the pen drive found in his
possession was true and that the primary onus to establish the identity,
genuineness and creditworthiness of the creditors whose names
appeared therein was on the Assessee. The AO accordingly concluded
that he had reason to believe that the income for the AY in question had
been under-assessed to the extent of the sums mentioned hereinbefore
and had therefore escaped assessment within the meaning of Section
147(b) of the Act.

Source: Indian Kanoon

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