HC reduced pre-deposit of tax amount from 20% to 10% considering high tax demand raised against assessee

Dalpatsinh Ukabhai Vasava v. PCIT – [2019] 108 taxmann.com 265 (Gujarat)

The assessee filed his return of income electronically. His case was selected for limited scrutiny to verify the sources & genuineness of the loans received by him and whether the investment & income relating to the properties were duly disclosed.

 During the assessment proceeding, Assessing Officer (AO) noticed that the assessee had purchased an agricultural land.

Upon verification of the account details of the seller and the persons from whom the assessee claimed to have obtained loan, the transactions were found to be sham and bogus.

The AO made additions to the income of the assessee under the head ‘Income from Other Sources’.

Aggrieved by the order of the AO, assessee filed appeal to the CIT(A) and requested the AO for stay of demand.

 The AO rejected the stay application and directed assessee to pay 20% of the demand.

The assessee further preferred stay application before the Principal Commissioner of Income-tax (Pr. CIT).

 The Pr. CIT didn’t allow any relief and directed him to pay 20% of the demand.

Thereafter, assessee filed writ petition before the High Court.

 The High court held that the total tax demand in the instant case was quiet high.

Even 20% of the disputed tax dues would run into lakhs of rupees.

Thus, the High Court reduced the requirement of depositing the disputed tax dues to 10% subject to the condition that the assessee shall offer immovable property as security for the remaining 10% to the satisfaction of the AO.