If no Books of accounts, Section 69A Of Income Tax Act cannot be invoked: Delhi High Court
CIT Versus Hersh Washesher Chadha (ITA 676/2023)
Facts:
- The respondent, a non-resident individual in the UAE, disclosed an income of Rs. 1,02,288, which included interest from savings accounts and income tax refunds in the Assessment Year 2017-18.
- Through scrutiny, the Assessing Officer made additions under Section 69A: Rs. 1,40,09,733 for unexplained bank credits, Rs. 1,64,219 for under-reported interest, and Rs. 4,69,335 as a deemed dividend under Section 2(22)(e).
- Sec 69A pertains to undisclosed income and its inclusion in the overall income assessment. It stipulates that if, during a financial year, the assessee is found to possess money, precious metals, jewellery, or other valuables not recorded in their records maintained, if any, and if there is no satisfactory explanation or none provided by the assessee regarding its source, it may be considered as their income for that fiscal year.
Hon Delhi HC held as below:
- The phrase “if any” in Section 69A specifies that the absence of such records precludes the application of this provision.
- The assessee is not obligated to maintain books of accounts in India.
- Absent departmental allegations of irregularity, under Section 260A, the court refrains from delving into fact-based assessments and document analysis.
- Sec 69A cannot be invoked and the revenue appeal is dismissed.
The copy of the order is as under:
