ASHISH GUPTA,NEW DELHI V. DCIT, CENTRAL CIRCLE-8, NEW DELHI

ITA 2935/DEL/2022

AI Insights

The case involves Ashish Gupta, who appealed against the order of the Commissioner of Income Tax (Appeals)-24, New Delhi, which upheld the addition of Rs.19,00,000 as unexplained income under section 69A r.w.s. 115BBE of the Income Tax Act, 1961. The cash was seized during a search operation on November 15, 2017, and the assessee claimed it was part of his business's cash-in-hand. The Assessing Officer rejected this claim, leading to the appeal. The Tribunal, after reviewing the statements and evidence, concluded that the cash was indeed part of the assessee's business and allowed the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 22840 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• 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: VED JAIN
• Keywords: Set aside; Transfer pricing
• Section: 69A; 20

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No.2935/Del/2022, A.Y. 2018-19 Ashish Gupta, 114, Ansari Road, Darya Ganj, New Delhi-110002 PAN: AESPG1231M Vs. Deputy Commissioner of Income Tax, Circle-8, New Delhi (Appellant) (Respondent) Appellant by Sh. Ved Jain, Advocate, Ms. Uma Upadhyay, CA, Sh. Aditya Garg, AR Respondent by Mr. Javed Akhtar, CIT(DR) Date of Hearing 03/03/2025 Date of Pronouncement 03/03/2025 ORDER PER AVDHESH KUMAR MISHRA, AM The appeal for the Assessment Year (hereinafter, the ‘AY’) 2018-19 filed by the assessee is directed against the order dated 25.10.2022 passed by the Commissioner of Income Tax (Appeals)-24, New Delhi [hereinafter, the ‘CIT(A)’]. 2. Vide nine grounds of appeal, the assessee has challenged the impugned order of the Ld. CIT(A) on technical as well as on merit also. ITA No.2935/Del/2022 Ashish Gupta 2 The issue that the assessment order has been passed without DIN is the technical ground besides the jurisdictional issues in general. The assessee’s claim is that the assessment order is not maintainable in the eyes of the law and thus, the same needs to be quashed being void ab initio. Further, the assessee has also raised the issue of taxability of cash of Rs.19,00,000/- under section 69A r.w.s. 115BBE of the Income Tax Act, 1961 (hereinafter, the ‘Act’). 3. The relevant facts giving rise to this appeal are that the search operations were carried out on the assessee along with Sanjay Singhal Group of cases on 15.11.2017. During the search operations, the cash of Rs.19,00,000/- was seized from the residential premises of the assessee. The statement of the assessee was recorded during the search operations raising specific queries with respect to the said cash. However, the Authorized Officer of Search Team was not satisfied with explanations of the assessee. He therefore, seized cash of Rs.19,00,000/-. 3.1 The assessee had filed his original Income Tax Return (hereinafter, the ‘ITR’) on 27.10.2018 declaring income of Rs.27,89,040/-. Since, the search was conducted in November, 2017; therefore, the case of the relevant year was picked up for scrutiny. During the course of assessment proceedings, the assessee claimed that the said cash of ITA No.2935/Del/2022 Ashish Gupta 3 Rs.19,00,000/- was part of the cash-in-hand of Arnav Trading, his proprietary concern. Therefore, the same could not be treated as unexplained. However, the Assessing Officer (hereinafter, the ‘AO’) opining that the assessee, during the search operation, had not admitted in the statement that the said cash belonged to Arnav Trading; therefore, the same was unexplained and taxed the same under section 69A r.w.s. 115BBE of the Act. The assessee did not get any relief from the CIT(A). 4. Before us, the Ld. Counsel drew our attention to the statements of the assessee duly recorded during the course of search operations. He drew our attention to reply to query No.3 of the statement recorded on 15.11.2017 wherein the assessee had claimed that he was the proprietor of Arnav Trader. Our attention was also invited to the reply to the query No.16 (statement was resumed on 16.11.2017) that the said cash of Rs.19,88,550/- was out of personal savings and cash in hand of business concerns (statement was resumed on 16.11.2017). The Ld. Counsel also drew our attention to Queries & Answers No. 19 and 20 (statement was resumed on 16.11.2017). The relevant portion of the statement to Queries & Answers No. 16, 19 and 20 are reproduced hereunder: ITA No.2935/Del/2022 Ashish Gupta 4 ITA No.2935/Del/2022 Ashish Gupta 5 4.1 The above scanned statement is typed as under for clear reading and proper appreciation of the facts: “Q. 16 During the course of search proceedings Rs. 19,88,550/- was found in cash at the ground floor of your premises. Please explain the source of the same. Ans. The cash of Rs. 19,88,550/- is out of my personal savings and cash-in-hand of my business concerns. ITA No.2935/Del/2022 Ashish Gupta 6 Q. 19 please provide bifurcation of cash found at your premise between personal savings and cash-in-hand of your business concern. Ans. At this moment, I don’t remember. The statement is temporarily suspended as the assessee has to go to 81, Darya Ganj, Delhi -110002 for recording of statement, the business address of the assessee at 3.25 P.M on 16/11/2017. Sd/- Sadhana Panwar Dy. Commissioner of Income Tax Transfer Pricing Officer New Delhi Statement is resumed at 11:00PM on 16/11/2017 Sd/- Sadhana Panwar Dy. Commissioner of Income Tax Transfer Pricing Officer New Delhi Ques. 20 You are shown a summary of cash-in-hand for all the entities associated with you generated from your premise (81, Darya Ganj) (Exhibit-4). As per this summery, the total cash-in-hand is Rs. 1,05,67,295/-. We have not found this cash at your premise. Please explain where is this cash? ITA No.2935/Del/2022 Ashish Gupta 7 Ans. I am explaining my cash recovered at my residence in the following names: - 1. K. K. Sales 2,00,000/- (Bank withdrawal from Axis Bank on 10.11.2017) 2. Krishna Marketing 5,09,786 (as per my Cash Book) 3. B.K.G. Services 6,20,020 (as per my cash book including Bank withdrawal of Rs. 3,50,000/- from Axis Bank) 4 Krishna Interprise 5,62,693/- (as per my Cash Book) I need to reconcile the cash-in-hand as per Exhibit-4 as shown by you for which I need time.” 5. It was categorically submitted by the Ld. Counsel that the assessee had nowhere admitted that the said cash did not belong to Arnav Trading during the course of search proceedings. Hence, the claim of the AO that the assessee had not admitted the fact that the said cash belonged to the Arnav Trading was factually incorrect. 6. The Ld. CIT-DR argued the case vehemently. He, emphasizing various paras of orders of lower authorities, prayed for dismissal of the appeal. ITA No.2935/Del/2022 Ashish Gupta 8 7. We have heard rival parties at length and have perused the material available on the record. We find force in the argument of Ld. Counsel that the said cash of Rs.19,00,000/- is duly disclosed in the books of account of Arnav Trading as the cash in hand of Arnav Trading, on the date of search; 15.11.2017, was Rs.49,61,040/-. Since, the assessee is the Proprietor of Arnav Trading; therefore, in view of the above, we do not see any abnormality in the explanation of the assessee that the part of the cash found at the residence of belonged to Arnav Trading. This inference also gets buttressed by the fact that the Revenue failed to bring any material on the record to contradict the assessee’s explanation. We therefore, set aside the impugned order and delete the addition of Rs.19,00,000/- made by the AO. In view of the above finding, the technical grounds became academic in nature; therefore, the same do not require specific adjudication. 8. In the result, appeal of the assessee is allowed as above. Order pronounced in open Court on 3rd March, 2025 Sd/- Sd/- (VIKAS AWASTHY) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 03/03/2025 Binita, Sr. PS ITA No.2935/Del/2022 Ashish Gupta 9 Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(Appeals) 5. CIT-DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "