ACIT, NEW DELHI V. SH. D.K. GUPTA, NEW DELHI

ITA 3848/DEL/2016

AI Insights

The case revolves around an appeal by the Revenue against the order of the Ld. CIT(A)-25, New Delhi, which had deleted the addition of Rs. 25 crores to the income of D.K. Gupta for the assessment year 2012-13. The addition was initially made by the Assessing Officer based on documents seized during a search operation, which allegedly showed that a cash loan of Rs. 25 crores was given by D.K. Gupta to Sanjeev J Aeren in exchange for a property share. The CIT(A) found the addition unjustified, leading to the Revenue's appeal. The Tribunal agreed with the CIT(A), noting the lack of evidence and the casual nature of the MOU.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 776786 (ITAT-DELHI)
• Duration Of Justice: 9 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2025
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 30-06-2016
• Laws Referred To: Income Tax Act
• Court: TRIBUNAL
• Department Lawyers: MONIKA SINGH
• Assessee Lawyers: RAJESHWAR PAINULY
• Section: 132

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘F’’ : NEW DELHI) BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUTANT MEMBER ITA No. 3848/Del/2016 (AY 2012-13) ACIT, CC-18, vs. D.K. GUPTA, ROOM NO. 102, ARA CENTRE, G-56, 1ST FLOOR, E-2, JHANDEWALAN EXTN., GREEN PARK MAIN, NEW DELHI NEW DELHI (PAN: AAHPG0478P) (Appellant) (Respondent) Assessee by : Sh. Rajeshwar Painuly, Adv. Department by : Ms. Monika Singh, CIT- DR Date of Hearing 27.08.2025 Date of Pronouncement 17.09.2025 ORDER PER KRINWANT SAHAY, AM: This appeal filed by the Revenue is against the order of the Ld. CIT(A)-25, New Delhi dated 31.03.2016 relating to assessment year 2012-13 on the following ground:- “The Ld. CIT(A) has erred in law and on the facts in deleting the addition in respect of advances of Rs. 25 crores without appreciating the fact that the assessee had made such advances from the sources not disclosed to the Department.” Printed from counselvise.com 2 2. Brief facts of the case are that a Search & Seizure operation u/s 132 was conducted on 17.08.11 on the Assessee, and other members of the group at various residential and business premises. After the Search, the jurisdiction over the Assessee was transferred from the ITO Ward-24(1), New Delhi to Central Circle-9, New Delhi vide Order u/s 127 dated 25.09.13 of CIT-VIII, New Delhi. In response to Notice u/s 143(2) dt. 30.09.13, the Assessee filed Return declaring income at Rs. 6,68,570/-. During the course of Search conducted on 17.08.11, certain documents being pages 32 to 36, being an MOU dated 10.08.11 were seized from the residence of Sh. Surendra Kumar Gupta, photocopy of which being pages 132 to 135 of Annexure A-1 were seized from the office of Sh. Sanjeev J Aeren. On the basis of these documents, it was concluded by the Assessing Officer that a Cash Loan of Rs. 25 Crores was given by the Assessee Sh. D.K. Gupta to Sh. Sanjeev J Aeren on 31.07.11, in lieu of which 25% of the undivided Share of the Property bearing no. 15/1, Prithvi Raj Road, New Delhi, measuring approximately 2,200 square yards, valued at about Rs. 18.75 Crores was given to the Assessee. On the basis of such conclusion, the Assessing Officer was of the opinion Printed from counselvise.com 3 that Unaccounted Cash of Rs. 25 Crores was advanced by the Assessee and added this amount to the Income of the Assessee. The Assessee has claimed that there was no such transaction of Rs. 25 Crores being paid in Cash by him and that neither Cash was paid nor the Property was transferred to him and that the addition of Rs. 25 Crores should be deleted. Assessee preferred appeal before the Ld. CIT(A), who vide his impugned order dated 31.03.2016 has allowed the appeal of the assessee. Aggrieved, with the action of the ld. CIT(A), Revenue is in appeal before us. 3. At the time of hearing, Ld. DR relied the order of the AO and filed her written submissions in support of her contention. Per contra, Ld. AR for the assessee relied upon the order of the Ld. CIT(A) and stated that Ld. CIT(A) has passed a well reasoned order which does not need any interference on our part. In support of his contention, he filed the written submissions. 4. We have heard both the parties and perused the records alongwith the written submissions filed by both sides. It is observed that Assessee has claimed that the MOU was not found from the premises of Sh. D.K. Gupta, and hence the onus was not upon the Printed from counselvise.com 4 Assessee. It was contended that the Assessing Officer has considered only one part of the MOU and he has not considered the full performance of the MOU and since Shrey Properties Pvt. Ltd. and Snerea Properties Pvt. Ltd, who were the owners of the Property in question i.e. 15 /1 Prithvi Raj Road, New Delhi, were not confirming Parties in the MOU, the MOU had not taken any relevance, and it was executed just for the sake of good family relationship. It was the contention of the assessee that neither any corroborative evidence was produced by the Assessing Officer nor any Cash was seized from the premises of Sh. Sanjeev J. Aeren or Sh. Devender Kumar Gupta. The Assessee has also pointed out that the MOU only stated that a 'Cash Loan' of a sum of Rs. 25 Crores was 'payable' to Sh. D.K. Gupta by Sh. Sanjeev J. Aeren as on 31.07.11 and that the word used was 'payable' and there was no reference of any agreement for 'Cash Loan' or date for 'Cash Loan' on which the actual transaction could have occurred. It was claimed that the MOU was a document drawn up between two real brothers in lieu of settlement of old loan of Hyderabad Party and that in the language of Real Estate business, 'Cash' means any amount which can be liquidated in a short span of time, and that 'Cash' as used in the MOU included banking transactions, and that the loans were actually given through regular bank accounts and were duly reflected in the Books of Accounts of the respective Assessees involved. It was also claimed that the explanation regarding the so called 'Cash Loan' was given during the Search Proceedings itself, on the same day. It was also stated that the Printed from counselvise.com 5 Hyderabad Party was well known to Sh. Sanjeev J. Aeren (Brother of the Assessee), and that the loan of Rs. 25 Crores was advanced to them only on the insistence of Sh. Sanjeev J. Aeren, and that the Hyderabad Party had failed to honour its commitment and the post dated cheques issued by them bounced and several Court Cases were filed against them and were pending. The Assessee has stated that in the MOU, there is no reference or mention of Rs. 25 Crores paid to Hyderabad Party, long back by Sh. D.K. Gupta and others, as the fact regarding the Hyderabad case was well known to the family members. The Assessee has also claimed that the MOU was drawn up to swap and settle the amount which had been advanced to the Hyderabad Party on the insistence of Sh. Sanjeev J. Aeren, and that the MOU was just a family settlement to put pressure on Sh. Sanjeev J. Aeren for recovery of loan advanced to Hyderabad Party. Perusal of the MOU dated 10.08.11 shows that the MOU is between two individuals i.e. the two brothers, Sh. D.K. Gupta and Sh. Sanjeev J. Aeren, but the primary transaction is the transfer of property owned by two Companies i.e. Shrey Properties Pvt. Ltd. and M/s Snerea Properties Pvt. Ltd. It is also seen that the proposed transaction from the Second Party i.e. Sh. Sanjeev J. Aeren is to be carried out not by the individual i.e. Sh. Sanjeev J. Aeren, but by two Companies. In such a situation, there is no reason to claim that in the reverse transaction, which is from the First Party, i.e. Sh. D.K. Gupta, (i.e. the 'Cash Loan' of Rs. 25 Crores), did not or could not involve any Company. The transaction from the Second Party i.e. the transfer of Property was not Printed from counselvise.com 6 only to be done by Companies, as per the MOU dated 10.08.11 itself, but it was not actually carried out, as there is no evidence regarding the actual transfer of any Property. In view of above, it is abundantly clear that the MOU dated 10.08.11 had internal contradiction, as though the main transaction, i.e. transfer of Property was shown in the MOU to be from Second Party (an individual) to the First Party (another individual), the Property was owned by two Companies. Thus, legally, the Second Party could not have signed a legal Agreement or Contract giving away a share of the Property owned by the two Companies. In such a situation, it is clear that the MOU has been drawn up in a casual manner and cannot be said to be a legally correct document. On one hand, the Assessing Officer accepts that when the Second Party mentions about repayment of the loan, it is to be done by Companies, but on the other hand, the Assessing Officer rejects the claim of the Assessee that the original loan by the First Party was through Companies. Thus the stand of the Assessing Officer is contradictory and cannot be accepted. It is seen that merely because the word 'Cash Loan' was used in the MOU, the Assessing Officer was drawn to the conclusion that Cash i.e. Currency must have been paid. However, while arriving at this conclusion, the Assessing Officer failed not only to look at all the facts and circumstances, but also failed to properly study the MOU which shows that not only the MOU appeared to be a casual document, but also that specific performance had to be carried out by 15.08.11, which was not carried out and hence the MOU was vitiated. In view Printed from counselvise.com 7 of above, it is clear that there is no justification for rejecting the explanation of the Assessee and concluding that Cash amounting to Rs. 2.5 Crores had been paid, without determining as to who had paid what amount to whom and on which date, that too, ignoring the entire facts and circumstances. Hence, there is no justification for concluding that Cash amount of Rs. 25 Crores was paid by the Assessee or that the Assessee had advanced an amount of Rs. 25 Crores in Cash from Undisclosed Sources. Keeping in view of the aforesaid background, we do not find any infirmity in the order of the Ld. CIT(A), hence, we uphold the same wherein, the Ld. CIT(A) deleted the addition in dispute. Accordingly, the ground raised by the Revenue stand rejected. 5. In the result, the Revenue’s appeal stands dismissed in the aforesaid manner. Order pronounced in the Open Court on 17-09-2025 Sd/- Sd/- (Anubhav Sharma) (Kriwant Sahay) Judicial Member Accountant Member Date: 17-09-2025 Copy forwarded to: - 1. Appellant 2. Respondent 3. DIT 4. CIT (A) 5. DR, ITAT Assistant Registrar, ITAT, Printed from counselvise.com "