DEEPAK CHOUDHARY,NEW DELHI V. ACIT CENTRAL CIRCLE 15, NEW DELHI

ITA 1988/DEL/2023

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The case involves Deepak Choudhary, the Assessee, who appealed against the order of the Commissioner of Income Tax (Appeals) which had made an addition of Rs.3,00,000 as unexplained expenditure under section 69C of the Income Tax Act, 1961. This addition was made following a search and seizure operation where a significant amount of cash was found. The Assessee argued that the addition was made without proper discussion and was an enhancement of income, which was not legally permissible. However, the Tribunal supported the CIT(A)'s decision, noting that the Assessee did not provide a satisfactory explanation for the cash shortage.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717754 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 07-07-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Assessee Lawyers: JASPAL SINGH SETHI
• Keywords: Unexplained expenditure; Search and seizure; Source of fund
• Section: 143(3); 142(1); 68; 69; 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.1988/Del/2023 (ASSESSMENT YEAR 2017-18) Deepak Choudhary, 20A, Rajpur Road, Civil Lines, New Delhi-110054 PAN-AABPC9380L Vs. ACIT, Central Circle-15, New Delhi. (Appellant) (Respondent) Assessee by Shri Jaspal Singh Sethi, Adv. Department by Ms. Pooja Swaroop, CIT-DR Date of Hearing 26/05/2025 Date of Pronouncement 13/08/2025 O R D E R [ PER MANISH AGARWAL, AM: This appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals)-26, New Delhi [CIT(A) in short], dated 10.03.2023 in Appeal No.10680 & 10681/2016-17 for Assessment Year 2017-18 arising out of the order passed u/s 143(3) of the Income Tax Act, 1961 (the Act, in short) dated 27.12.2018. 2. Brief facts of the case are that assessee is an individual and filed his return of income on 03.08.2017 declaring total income at Rs.70,08,850/-. Upon receipt of information from DIG, CBI, a search and seizure operation was carried out on 03.09.2016 at the Printed from counselvise.com 2 ITA No.1988 /Del/2023 Deepak Choudhary vs. ACIT residential premises of the assessee alongwith the residence of his son Sh. Gaurav Chaudhary and cash of Rs.28,66,100/- was found in possession of the assessee out of which Rs.27,00,000/- were seized by the Department. The assessment was taken up for scrutiny by way of issue of notice u/s 143(2) dated 05.09.2018 followed by the notices issued u/s 142(1) along with the questionnaire from time to time. After considering the submissions made by the assessee, the assessment was completed vide order dated 27.12.2018 wherein an addition of Rs.24 lacs was made on account of cash deposited during demonetization in SBN in the bank accounts by holding the same as undisclosed income u/s 68 of the Act and no addition was made towards cash found/seized during the search from the possession of the assessee. 3. Against this order, assessee preferred an appeal before ld. CIT(A), who vide impugned order dated 10.03.2023 deleted the additions so made, however, he has made separate additions of Rs.3,00,000/- as unexplained expenditure u/s 69 of the Act. Against which, the present appeal is filed by the assessee before the Tribunal wherein assessee has raised the following grounds of appeal: “1. That the appellant order as passed is against law and facts of the case. 2. That the learned Commissioner of Income Tax (Appeals) has erred in making an addition of Rs.3,00,000/- on account of unexplained expenses u/s.69C of the I.T. Act despite duly accepting the source of funds. 3. That the appellant order as passed is not sustainable on the facts and circumstances of the case.” 4. Before us, the ld. AR of the assessee submits that the additions of Rs.3,00,000/- is made which was never discussed nor made by Printed from counselvise.com 3 ITA No.1988 /Del/2023 Deepak Choudhary vs. ACIT the AO thus, it is enhancement of income for which due procedure as prescribed in the Act was followed by the ld. CIT(A), thus, enhancement so made deserves to be hold bad in law. The Ld. AR further submits that ld. CIT(A) alleged that assessee received cash from two LLPs of Rs. 30,00,000/- as imperest. As per ld. CIT(A)out of total cash found at Rs.28,66,100/-, Rs. 1,66,100/- was the savings of the assessee and remaining Rs.27,00,000/- was out of Rs. 30.00 lacs cash received from LLP’s as imperest, thus, there was shortage Rs.3,00,000/- which was held as unexplained expenditure of the assessee. The Ld. AR assessee submits that the Ld. CIT(A) on assumptions and presumptions and by ignoring the fact that the cash was kept by the assessee for security purposes. He thus, submits that the additions made deserves to be deleted. 5. On the other hand, the Ld. SR. DR vehemently supported the orders of lower authorities and submits that Ld. CIT(A) has rightly made the additions of Rs.3,00,000/- which deserves to be upheld. 6. Heard both the parties and perused the materials available on record. It is seen that while explaining the source of the cash found during the course of search of Rs.28,66,100/-, it was the claim of the assessee that he had received total Rs.40,00,000/- from two LLPs out of which Rs.10,00,000/- were given to his son for safe custody and remaining Rs.30,00,000/- were kept by the assessee himself. It was the submission of the assessee that the he had kept cash due to social compulsion and his mother being of 92 years old was very insecure in terms of the health and for her medical urgency the Printed from counselvise.com 4 ITA No.1988 /Del/2023 Deepak Choudhary vs. ACIT assessee always kept sufficient cash with him. However, when the search was carried out for Rs.30,00,000/- only Rs.27,00,000/- was found with the assessee and Rs.1,66,100/- was his own saving, therefore, there was shortage of Rs. 3,00,000/- for which no plausible explanation was tendered by the assessee. Even before us, the assessee failed to tender any explanation about the shortage of Rs.3,00,000/-. In view of these facts, we find no error in the order of Ld. CIT(A) in making the additions of Rs.3,00,000/- as unexplained expenditure u/s 69C which is hereby upheld. Accordingly, all the grounds of appeal raised by the assessee are dismissed. 7. In the result, the appeal filed by the Assessee is dismissed. Order pronounced in the open court on 13.08.2025. Sd/- Sd/- (SATBEER SINGH GODARA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 13.08.2025 PK/Sr. Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "