ACIT, NEW DELHI V. AJAY CHAUDHRY, NEW DELHI

ITA 2742/DEL/2024

AI Insights

The case revolves around an appeal by the Revenue against the CIT(A)'s decision which had favored the assessee, Ajay Chaudhary. The core issue was the addition of Rs. 15,93,94,200 to the assessee's income, which the AO claimed was an unaccounted investment in M/s Celebration City Projects Pvt. Ltd. The CIT(A) found that the investment was actually made by three other companies and not by the assessee himself. The Tribunal's decision affirmed the CIT(A)'s findings, leading to the dismissal of the Revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474534 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAVED AKHTAR
• Assessee Lawyers: ABHINAV JAIN
• Keywords: Set aside; Unexplained investment; Document seized; Documents seized
• Section: 143(3); 132; 69A; 153C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: A : NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No.2742/Del/2024 Assessment Year: 2018-19 ACIT, New Delhi. Vs Ajay Chaudhary, 186/1, Gautam Nagar, New Delhi – 110 049. PAN: AABPL4866E (Appellant) (Respondent) Assessee by : Shri Abhinav Jain, Advocate Revenue by : Mr. Javed Akhtar, CIT, DR Date of Hearing : 10.02.2025 Date of Pronouncement : 12.03.2025 ORDER PER ANUBHAV SHARMA, JM: This appeal is preferred by the Revenue against the order dated 18.03.2023 of the Commissioner of Income-tax (Appeals)- 26, New Delhi (hereinafter referred to as the Ld. First Appellate Authority or ‘the Ld. FAA’, for short) in Appeal No.10600/2017-18 arising out of the appeal before it against the order dated 31.12.2022 passed u/s 153C r.w.s. 143(3) of the Income Tax Act, ITA No.2742/Del/2024 2 1961 (hereinafter referred as ‘the Act’) by the ACIT, Central Circle- 16, New Delhi (hereinafter referred to as the Ld. AO). 2. Heard and perused the record. The factual background of this appeal of the Revenue is that a search u/s 132 of the Act was conducted in the case of Rakesh Jain Group on 02.11.2017. the case of Shri. Prahlad Kumar Aggarwal was also covered under search operation. On perusal of seized data/documents in the case of Rakesh Jain Group of cases certain documents were found pertaining to Shri Ajay. The AO of the searched persons has recorded his satisfaction dated 10.08.2021 and handed over the seized material to the AO of the other person, i.e., Shri Ajay Chaudhary. The seized materials were perused and after arriving at satisfaction that the information contained in the seized documents pertained to the assessee and have a bearing on the determination of total income of the assessee, satisfaction note was recorded by the AO of the assessee on 10.08.2021. Thereafter, assessment was completed at an income of Rs.17,43,76,250/-. The ld. AO has primarily proposed to tax the investment of the assessee in M/s Celebtration City Projects Pvt. Ltd. However, ld. CIT(A) has allowed the appeal of assessee and grounds taken by the Revenue, in appeal here, are as under: ITA No.2742/Del/2024 3 “1. Whether on facts of the case and in law, the Ld. CIT(A) has erred in holding that the AO has failed to establish the provisions of section 69A of the Act, whereas the assessee has failed to explain the genuineness of the transactions? 2. Whether on facts of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 15,93,94,200/- as the assessee had made investment of Rs.15,93,94,200/- in cash in RED Mall being constructed and developed by M/s Celebration City Projects Pvt. Ltd? 3. Whether on facts of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 15,93,94,200/- while ignoring the incriminating documents found in the seized data in which a total consideration of Rs. 15,93,94,200/- has been mentioned? 4. Whether on facts of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 15,93,94,200/- the additions referred to by Ld. CIT(A) w.r.t investments made by AGC Projects Pvt. Ltd., DKM Developers Pvt. Ltd. and M/s Alethea Infracon Pvt. Ltd. amounting to Rs. 11,40,69,200/- (the addition of Rs.11.14.69,200/- instead of Rs. 11,40,69,200/- mentioned in assessment order), Rs. 1,63,60,000/- and Rs. 3,15,65,000/- respectively pertains to A.Y 2014-15. Whereas, in the instant matter, the addition to the income of the assessee has been w.r.t transaction for A.Y. 2018-19. 5. It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the AO may be restored to the above extent. 6. (a) The order of the Ld. CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.” 3. The case of the assessee before the CIT(A) was that the assessee had not entered into the transaction with M/s ITA No.2742/Del/2024 4 Celebration City Projects Pvt. Ltd., which was categorically stated in the statement recorded u/s 132(4) of the Act. It was mentioned that seized documents represents money received from the customers to whom shops/space have been sold through Shri Ajay Chaudhary or Ajay Chaudhary himself. The assessee has not made any transaction himself and the incriminating documents relied in the form of excel sheet mentioned that the investment were by AGC Projects Pvt. Ltd., DKM Developers (P) Ltd. and Alethea Infracon Pvt. Ltd., and the copies of agreement between these investors and M/s Celebration City Projects were submitted before the ld.CIT(A). The details of payments through bank were also submitted before the ld.CIT(A) showing that actually investment was made by the companies and not by the assessee. Thus, it was concluded that Shri Ajay Chaudhary has nothing to do with the cheque payments or cash payments to Celebration City Projects Pvt. Ltd. Accordingly, the addition was deleted for which the Revenue is in appeal. 4. The relevant part of the observation and conclusion of ld. CTI(A), as are relevant to the grounds before us are reproduced below:- ITA No.2742/Del/2024 5 “From the above two seized documents, it is obvious that the amount of investment written From in cheque as well as in cash before the name of Sh. Ajay Choudhary is same which is written in the name of the three companies i.e. AGC Projects Private Ltd., DKM Developers (P) Ltd and M/s Alethea Infracon Pvt. Ltd. Further, from the perusal of assessment order of these three companies, it has been also found that the cash investments totaling to Rs. 15.93.94,200/-have been substantially added in their hands as well. Further, M/s Alethea Infracon Pvt. Ltd. has also submitted that it has accepted the assessed income and has not filed further appeal against the assessment order. Therefore, the same amount of unaccounted investment has been added twice in the hands of appellant and the three companies. In the statement given by Sh. Rakesh Jain, he had also stated that the amounts written before the name of Sh. Ajay Choudhary represents the money either received from the customers to which shop/space has been sold through him or by himself. Thus, it is clear from the statement given by Sh. Rakesh Jain that he was not sure regarding the source of the investment. Considering the seized documents mentioned above, it is obvious that the investments were made by AGC Projects Private Limited DKM Developers (1) Lin and M/s Alethea Infracon Pvt. Ltd. and therefore the additions made in the hands of these companies found to be justified. 4. In view of the above facts, I am of the view that the appellant has not made unaccounted investment in M/s Celebration City Projects Pvt. Ltd, as the same unaccounted investments were made by AGC Projects Private Limited, DKM Developers (P) Ltd and M's Alethea Infracon Pvt. Ltd. and the addition have been already made in their hands of Rs. 11.40,69.200/-, Rs. 1,63,60,000/- and Rs. 3,15.65.000/-respectively considering the amounts of cash investment mentioned in the excel sheets seized during search Therefore, it is held that the addition made by the assessing officer is not justified in the hands of the appellant, hence, the addition made by the assessing officer is directed to be deleted and ITA No.2742/Del/2024 6 the grounds of appeal taken by the appellant are hereby allowed.” 5. Ld. DR has though tried to defend the order of ld. AO however was not able deny the factual aspect that additions stand made in the hands of three companies who were actual investor and incriminating entries pertained to their investments actually and not of assessee before us. Thus we have no hesitation to hold that the appeal of department is without any substantial grievance requiring any interference in the well reasoned conclusion of ld. CIT(A). The appeal is dismissed. Order pronounced in the open court on 12.03.2025. Sd/- Sd/- (NAVEEN CHANDRA) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 12th March, 2025. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi "