DCIT, CIRCLE- 19(1), DELHI V. VIVEK SEHGAL, DELHI

ITA 1898/DEL/2025

AI Insights

The case involves an appeal by the Revenue against the order of the Ld. Commissioner of Income-tax (Appeals), which had deleted the addition of Rs.7,35,00,000 made by the Assessment Unit under Section 69 of the Income Tax Act, 1961. The addition was based on the finding that the assessee, Vivek Sehgal, had made unexplained cash payments for the purchase of a villa during the Financial Year 2015-16 relevant to Assessment Year 2016-17. The Revenue contended that the Ld. CIT(A) erred in deleting the addition without considering the incriminating documents provided by the Investigation Wing, which substantiated the cash transactions. The court agreed with the Revenue, noting that the Ld. CIT(A) had not called for a remand report from the Ld. AO and had relied on documents that did not support the deletion of the addition.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 841640 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2016-2017
• Appeal Filed On: 26-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUNEESH RAJANI
• Assessee Lawyers: A.K SRIVASTAVA
• Keywords: Condonation of delay; Corroborative evidences; Unexplained investment; Reopening of assessment; Search and seizure
• Section: 147; 148; 132; 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G : NEW DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No.1898/Del/2025 Assessment Year : 2016-17 DCIT, Circle-19(1), Delhi. Vs. Vivek Sehgal, E-11, Naraina vihar, New Delhi. PAN: AANPS7009L (Appellant) (Respondent) Assessee by : Shri A.K Srivastava, CA Revenue by : Shri Muneesh Rajani, Sr.DR Date of Hearing : 04.02.2026 Date of Pronouncement : 25.02.2026 ORDER PER MADHUMITA ROY: The instant appeal filed by the Revenue is directed against the order dated 23.01.2025 of the Ld. Commissioner of Income-tax (Appeals), NFAC, Delhi [hereinafter referred to as the Ld. CIT(A)] u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of the assessment order dated 21.03.2024 passed by the Assessment Unit, IT Deptt. (hereinafter referred to as ‘the ld. AO’) under Section 147 r.w.s. 144B of the Act for Assessment Year 2016-17. Printed from counselvise.com ITA No.1898/Del/2025 2 2. There is a delay of three days in preferring the appeal in support of which an application for condonation of delay has been filed by the Revenue and the reason explained therein appears to be genuine. Hence, the delay is condoned. 3. The brief facts of the case is that a search and seizure operation was conducted u/s 132 of the Act by the Investigation Wing, Delhi on 02.03.2022 on Gaur group of companies including the company of the assessee. During the search a pen drive (SBV-5) was found and seized as Annexure A-4 from the house of one Ms Veenu Singhal, COO of Gaur group at K-102, Gaur Spotswood, Sector-79, Noida, wherein an excel file ‘Projection Final 11.07.2018’ was found containing several spread sheets having data on various projects of Gaur group entities. The details of payment received by the said group against the sale of units/flats/plots shops, etc. which were recorded in the books of account and part was received out of books in cash were also reflecting from the loose sheets found. A spread sheet ‘FHs containing the details of cheques, cash receipts of payments made to Greater Noida Authority’ during the course of sale of farm house by the said entity was also found and seized. From the above evidences, it was evident that the Gaur group was receiving out of books receipts in sale of farm house of Gaur Mulberry Mansions – FH-02 and FH-03. The amount written in ‘X’ term denotes the out of the books receipts while ‘Ch’ denotes the amount received via banking channel the details whereof has duly been mentioned in page 2 of the assessment order. On the other hand, the assessee Printed from counselvise.com ITA No.1898/Del/2025 3 being an individual had filed the return of income for the year under consideration declaring the taxable income of Rs.64,89,610/-which was selected for scrutiny assessment proceedings under issuance of order u/s 148A(d) of the Act on 29.03.2023 the contents whereof is as follows:- Printed from counselvise.com ITA No.1898/Del/2025 4 4. The information uploaded on the portal suggests that the assessee before us has escaped assessment in regard to purchase of a villa at a cost of Rs.12,63,20,000. As per the documents date of registration was 10.06.2016 wherein the assessee paid an amount of Rs.7,35,00,000 , the actual consideration whereof was paid of Rs.16,83,00,000/- and the difference being paid in cash. In fact the said balance amount being Rs.7,35,00,000/- paid by cash by the assessee during the FY 2015-16 relevant to AY 2016-17 source of which remained unexplained and, therefore, the said income chargeable to tax has escaped assessment as the case made out by the Revenue. 5. A show cause notice, therefore, under Section 148A(b) of the Act dated 13.03.2023 was issued to the assessee for examining the above facts by 23.03.2023 and further show cause as to why a notice under Section 148 of the Act would not be issued to the assessee on the basis of the information described hereinabove suggesting income chargeable to tax has escaped assessment. Relevant to mention that there was no reply forthcoming from the assessee and Printed from counselvise.com ITA No.1898/Del/2025 5 the Ld. AO having no other alternative satisfied that the amount in question of Rs.7,35,00,000/- had escaped assessment, the said amount representing the assets in the form of immovable property had escaped assessment in the relevant Assessment Year 2016-17. Thus, the notice under section 148 of the Act was issued with the prior approval of the PCIT, New Delhi against the assessee. The extract of the said incriminating documents justifying the cash payment made by the assessee of Rs.7,35,00,000/- is also appearing at page 6 of the assessment order which is extracted hereinabove. 6. As the source of such cash payment made by the assessee remained unexplained, the same was held to be unexplained investment u/s 69 of the Act and deemed it to be the income of the assessee for the Financial Year which was finally added in the hands of the assessee. The same was deleted by the First Appellate Authority in appeal, hence, the instant appeal before us. 7. It is the case of the assessee that difference amount of Rs.7,35,00,000/- as worked out by the Revenue is not figured in any document. Such working of the Revenue was done in a mechanical manner. It was mere speculation and theoretical assumption without any corroborative evidence. Thus, it is the case made out by the assessee before us that the assertions without supporting evidence was duly considered by the Ld. CIT(A) and, therefore, the addition made by the Ld. AO was correctly deleted. The assessee’s case is that the assessee paid an amount of Rs.12,63,20,000/- as on record and as per the Printed from counselvise.com ITA No.1898/Del/2025 6 Revenue, the actual consideration paid was Rs.16,83,00,000/- and the difference being paid in cash which is Rs.4,19,80,000/- whereas the Ld. AO mentioned in the show cause notice that an amount of Rs.7,35,00,000/- for F.Y. 2015-16 was paid by the assessee which is nothing a calculation error on the part of the Ld. AO and this depicts non-application of mind in a simple mathematical calculation and wrong amount of Addition of Rs.7,35,00,000/- was made which has never been confirmed by M/s Gaursons Hitech Infra Pvt. Ltd. The case of the assessee is that cash payment of Rs.3,75,00,000/- was made from past savings of the assessee, sale consideration of Rs.1,72,00,000 was from property sold and unsecured loan of Rs.1,25,00,000/- which was taken from the father of the assessee which was duly been explained as the source of payment made by the assessee towards the consideration of plot. No cross-examination was ever given to the assessee in spite of the request made to that effect. Apart from that, the evidence extracted from the electronic records which is digital/electronic evidence and for using the same against the assessee, certain safeguards are provided under the Information and Technology Act and Indian Evidence Act which are required to be followed, otherwise, the same would render as inadmissible evidence in law. Section 65B of the Indian Evidence Act, 1972 has been relied upon which, for the first time, is coming before us. This particular point was taken neither before the AO nor before the CIT(A). Relevant to note that in the written submissions the assessee has discussed the same for the first time Printed from counselvise.com ITA No.1898/Del/2025 7 8. On the other hand, we have further considered the submissions made by the Ld. DR to the effect that the note given by the Investigation Wing to the Ld. AO, particularly, excel sheet showing payment of Rs.7.35 crores by theassessee. A copy of the said excel sheet in relation to farm house- 02 and farm house-03 projects out of the books receipt indicating details of Gauravsons has been duly filed before us by the Ld. DR the contents whereof is as follows:- Printed from counselvise.com ITA No.1898/Del/2025 8 9. It appears that item No.36 of the said excel sheet deals with the property having been purchased by the customer is none other than the assessee before us wherein the receipt of Rs.7.35 crores for AY 2015-16 has been is shown as made by the assessee. Further the Ld. DR has drawn out attention to the fact of sharing information in the case of individuals and entities found during the search action of Gaur group (DOS:02.03.2022) dated 02.03.2022 appearing from pages 183 to 217 of the paper book filed by the assessee wherein this particular evidence being the annexures as reproduced hereinabove as submitted by the Ld. DR during the course of hearing before us has not been annexed to the paper book filed by the assessee. Thus, it is quite evident that in order to keep the Bench in dark on the veracity of the amount of addition of Rs.7.35 crores instead of difference amount of Rs.4,19,80,000/- being added in the hands of the assessee by the Ld. AO the said excel sheet found to have been missing in the paper book though the same was the annexure of the information received from the Investigation Wing forwarded to the assessee. Furthermore, the Ld. counsel of the assessee repeated and reiterated this as to whether the addition of Rs.7.35 crores being the cash receipt alleged to have been made by the assessee is sustainable in the eyes of law, particularly, when the said amount is not reflecting from any document whatsoever. We find that this amount in question is the very basis as revealed by the Investigation Wing and recorded in the report of the Investigation Wing which was subsequently handed over to the Ld. AO for reopening of assessment consequent to the search conducted. Apart from that Printed from counselvise.com ITA No.1898/Del/2025 9 before the Ld. AO when the assessee has not complied fully as per notices served upon him and the assessment was made on the basis of the documents already on record, the Ld. CIT(A) to the utter surprise has given a complete clearance to the assessee on the basis of those documents which were filed before him that too without calling for any remand report from the Ld. AO which evidences that just to give a clearance to the assessee by granting full relief the Ld. CIT(A) in hot haste only on the basis of the ledger account of Gaursons, deleted the addition. The excel sheet being the primary document in the hands of the Investigation Wing parted with the Revenue for reopening of assessment, the cash receipt of Rs.7.35 crores from the assessee in the year under consideration which specifically mentions the same therefore, purportedly being overlooked by the Ld. CIT(A) which cannot be said to be justified rather on the basis of the said document the assessment made in the hands of the assessee upon making addition of Rs.7,35,00,000 by the Ld. AO is found to be justified. Thus, we quash the order passed by the Ld. CIT(A) confirming the order passed by the AO. The assessee’s appeal is, therefore, found to have no merit and, thus, dismissed. 10. In the result, the appeal of the Revenue is allowed. Order pronounced in the open court on 25.02.2026. Sd/- Sd/- (NAVEEN CHANDRA) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:25th February, 2026. Printed from counselvise.com ITA No.1898/Del/2025 10 dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi Printed from counselvise.com "