2011 (2) TMI 1463 - HC - Income Tax

Summary

Issues involved: Seizure of pen drive containing incriminating information, addition in income u/s 69 of Income Tax Act based on pen drive data, deletion of addition by CIT(A) due to lack of reliance on pen drive, confirmation of deletion by ITAT.

Seizure of pen drive and addition in income: A pen drive belonging to Mr. Chetan Gupta was seized, leading to an addition in the income of the assessee u/s 69 of the Income Tax Act based on the information found on the pen drive. However, the CIT(A) overturned this addition, citing the inability to rely on the pen drive data. Mr. Chetan Gupta denied receiving any cash from the assessee in his statement recorded u/s 131, further weakening the case for the addition.

Confirmation of deletion by ITAT: The ITAT upheld the CIT(A)'s decision to delete the addition, emphasizing the lack of concrete evidence to prove that the assessee had made any cash payments to Mr. Chetan Gupta. The ITAT noted the absence of the Superintendent of Police's report and the lack of a statement from Mr. Chetan Gupta corroborating the alleged cash transaction. Mr. Chetan Gupta's denial of receiving any cash, coupled with the Assessing Officer's silence on the matter, supported the deletion of the addition. The ITAT found no infirmity or illegality in the decision and dismissed the appeal, stating that no substantial question of law arose for consideration.