DHEERAJ CHAUDHARY,NEW DELHI V. ACIT, CENTRAL CIRCLE-8, NEW DELHI

ITA 6217/DEL/2018

AI Insights

The case involves Shri Dheeraj Chaudhary, who appealed against the order of the CIT(A)-31, New Delhi, which confirmed the additions made to his income for the Assessment Year 2015-16 following a search and seizure operation. The main contention was that the additions were made without any incriminating material found during the search. The Tribunal examined various documents and rough sheets seized during the search and found them to be either undated, unverified, or merely rough estimates, thus not warranting any additions to the assessee's income. The Tribunal also addressed the issue of a loan taken from Muthoot Finance Ltd, which was added to the income without proper examination of its security and reflection in the books.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 836504 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Appeal Filed On: 28-09-2018
• Other Referred Cases: Common Cause (A Registered Society) and Others vs. Union of India & Ors., ACIT vs. Shri Sharad Chaudhary, Shri Neeraj Goel vs. ACIT Central Circle-28, Delhi, Sanjay Taneja vs. ACIT, DCIT Central-2 vs. Sanjay Aggarwal
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMER SINGH MEENA
• Assessee Lawyers: RUCHESH SINHA
• Keywords: Document seized; Documents seized; Search and seizure; Loose papers; Deemed to accrue or arise in india; Deemed owner of house property
• Section: 142(1); 153A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘F’ BENCH, NEW DELHI BEFORE SHRI YOGESH KUMAR US, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No.6217/DEL/2018[A.Y 2015-16] Shri Dheeraj Chaudhary Vs. The A.C.I.T. Flat No. 1A, Empire Estate Central Circle – 8 Sultanpur, M.G. Road, New Delhi New Delhi PAN: AASPK 9267 B (Applicant) (Respondent) Assessee By : Shri Ruchesh Sinha, Adv Department By :Shri Sumer Singh Meena,CIT-DR Date of Hearing : 09.12.2025 Date of Pronouncement : 11.02.2026 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:- Thisappealby the assessee is preferred against the order of theCIT(A)-31,New Delhi dated 31.07.2018 pertaining to A.Y 2015-16. 2. The assessee has raised as many as 8 grounds of appeal. However, the main issue agitated by the assessee is the framing of the assessment u/s 153A of the Income-tax Act, 1961 [the Act, for short] Printed from counselvise.com ITA No.6217/DEL/2018 [A.Y 2015-16] Shri Dheeraj Chaudhary vs ACIT Page 2 of 10 since no incriminating material was found as a result of search and the additions made are without jurisdiction. 3. Briefly stated, the facts of the case are that a search and seizure operation was carried out on Karan Luthra Group of cases on 14.03.2014 wherein certain incriminating documents/information related to the assessee were found and seized. Consequential search action was conducted at the premises of Shri Dheeraj Chaudary on 29.04.2014. The assessee was issued notices u/s 153A and 142(1) of the Act, pursuant to which the assessee filed its return of income on 15.06.2016 declaring total income of Rs. 10,04,820/-. 4. The Assessing Officer observed that the assessee did not furnish even a single document to establish the authenticity of source of cash receipts appearing in the documents seized. The Assessing Officer, therefore, assessed the income of the assessee at Rs. 2,21,68,042/-. 5. The assessee carried the matter before the ld. CIT(A) but without any success. 6. Before us, the ld. counsel for the assessee reiterated what has been stated before the lower authorities and contended that the ld. CIT(A) confirmed the order of the Assessing Officer in a mechanical manner and has not even seen that most of the rough sheets on which additions have been made do not contain any date so as to connect it Printed from counselvise.com ITA No.6217/DEL/2018 [A.Y 2015-16] Shri Dheeraj Chaudhary vs ACIT Page 3 of 10 to A.Y 2015-16. The ld. counsel for the assessee further submitted that the cash deposit for the repayment of loan cannot be considered income of the assessee as the same is not receiving the loan. The rough sheets are merely an estimate and pertaining to some property. 7. The ld. counsel for the assessee continued by saying that LS-3, Annexure A-1 is a loose sheet without any date, name, signature or handwriting of the assessee and is merely a rough estimate and it contains nine dates which pertain to A.Ys other than A.Y 2015-16. It was further argued that the said documentsare dumb documents and no additions can be made on the basis of the same. The ld AR relied on the following decisions: 1.Common Cause (A Registered Society) and Others vs. Union of India & Ors. (2017) TMI 1164-Supreme Court 2.ACIT vs. Shri Sharad Chaudhary, (2014) (8) TMI 309- ITAT Delhi 3.Shri Neeraj Goel vs. ACIT Central Circle-28, Delhi (2019) (3) TMI 276- ITAT Delhi 4.Sanjay Taneja vs. ACIT, (2025) 176 Taxman.com 392, (ITAT Delhi) 5.DCIT Central-2 vs. Sanjay Aggarwal, (2025) 174 Taxman.com 108 - (ITAT Raipur) 8. Per contra, the ld. DR supported the findings of the authorities below. 9. We have given thoughtful consideration to the orders of the authorities below. We find that the entire quarrel revolves around seized documentsas Exhibits at pages 6,59, 61,62,64,65,73,78,79,82 to Printed from counselvise.com ITA No.6217/DEL/2018 [A.Y 2015-16] Shri Dheeraj Chaudhary vs ACIT Page 4 of 10 83, 84 and 86 being Annexure A-1 of the paper book on the basis of which additions of Rs 2,10,63,277/- have been made. We find that these documents contain jottings of figures, many of which do not have any dates, from which no logical conclusion can be drawn. Each of the seized pages are discussed below: 9.1 Annexure A-1 at page 6 contains hand written details of the transaction of Rs. 1,57,50,000/- made with Mr. Anand. From the bare perusal of the same it appears to be estimate pertaining to some property. It does not contain any date so as to relate it with the financial year 2014-15 relevant for the A.Y. 2015-16. We consider it to a rough estimate which does not warrant any additions. 9.2 Annexure A-1 at page 59 is a hand writtenconfirmation page which contains receipt of Rs.3,00,000/- from DheerajChaudhary.From the perusal of the same, we find that it does not contain any date and is not in the AO has not concluded that it is in the handwriting of the assessee. The same does not warrant any additions. 9.2 Annexure A-1 at page61-62contains hand written details of certain transaction of Rs.8,86,500/- and Rs. 3,72,297/-.From the bare perusal of the same, we find that the same does not contain any date, signature, name. We feel that the same is merely a rough estimate and does not warrant any additions. Printed from counselvise.com ITA No.6217/DEL/2018 [A.Y 2015-16] Shri Dheeraj Chaudhary vs ACIT Page 5 of 10 9.3 Annexure A-1 at page 64 contains hand written details of certain transaction of Rs 4,62,000/-.From the bare perusal of the same, we find that the same does not contain any date, signature, name. We feel that the same is merely a rough estimate and does not warrant any additions. 9.4 Annexure A-1 at page 65 contains hand written details of certain transaction of Rs 2,30,000/- with Rishi Bhati. page This contains hand written detail of certain transaction of Rs. 2,30,000/- made with Rishi Bhati.From the bare perusal of the same, we find that it contains nine dates. The first four dates pertain to financial year 2012-13 which are relevant for the Α.Υ. 2013-14. The other five dates pertain to financial year 2013-14 relevant for the A.Y. 2014-15. Hence no addition based on the said loose sheet can be made for the A.Υ. 2015-16. 9.5 Annexure A-1 at page 73 contains hand written details of certain transaction ofRs. 17,75,184/- made with Mr.Prakash. From the bare perusal of the same, we find that the same does not contain any date, signature, name of the assessee. The same appears to be a rough estimate which does not warrant additions. 9.6 Annexure A-1 at page 78 contains hand written details of certain transaction ofRs.2,56,202/-.From the bare perusal of the same, we find that the same does not contain any date, signature, name of the Printed from counselvise.com ITA No.6217/DEL/2018 [A.Y 2015-16] Shri Dheeraj Chaudhary vs ACIT Page 6 of 10 assessee. The same appears to be a rough estimate which does not warrant additions. 9.7 Similar is the case with Annexure A1 page 79,82,83,84 and 86 containing transaction details of Rs 3,00,547/-; Rs 1,02,894/-; Rs 1,60,923/-;Rs 1,66,367 and Rs 3,00,547/- where bare perusal of the same, we find that they do not contain any date, signature, name of the assessee. The same appears to be a rough estimate which does not warrant additions. 10. The Hon’ble Supreme Court in the case of Common Cause (A Registered Society) and Others vs. Union of India and Others in Writ Petition Civil Appeal No. 505 of 2015 has observed as under:- “16. With respect to the kind of materials which have been placed on record, this Court in V.C. Shukla’s case (supra) has dealt with the matter though at the stage of discharge when investigation had been completed but same is relevant for the purpose of decision of this case also. This Court has considered the entries in Jain Hawala diaries, note books and file containing loose sheets of papers not in the form of “Books of Accounts” and has held that such entries in loose papers/sheets are irrelevant and not admissible under Section 34 of the Evidence Act, and that only where the entries are in the books of accounts regularly kept, depending on the nature of occupation, that those are admissible 17. It has further been laid down in V.C. Shukla (Supra) as to the value of entries in the books of account, that such statement shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible, and that they are only corroborative evidence. It has been held even then independent Printed from counselvise.com ITA No.6217/DEL/2018 [A.Y 2015-16] Shri Dheeraj Chaudhary vs ACIT Page 7 of 10 evidence is necessary as to trustworthiness of those entries which is a requirement to fasten the liability.” 11. It is apparent from the aforesaid law mandated by the hon’ble Supreme Court that the loose sheet of papers found in the search, in the case of the assessee, are wholly irrelevant as evidence being not admissible u/s 34 of the Evidence Act so as to constitute evidence with respect to the transactions mentioned therein, being uncorroborated with any books of account.They are merely rough sheets, without any dates and wherever dates are mentioned, they do not pertain to the impugned year. Considering the facts of the case in totality, we do not find any merit in the additionsmade by the Assessing Officer, based on the above seized rough sheets.Therefore, we direct the Assessing Officer to delete the impugned additions. Ground 5 is allowed. 12. Ground 6 pertain to loan taken by the assessee from Muthoot Finance Ltd. The CIT(A) upheld the same stating that no details of security for such loan was give by the assessee. We find that the said cash was taken as loan from Muthoot Finance Ltd against security of jewellery. Neither the AO examined that the same is not reflected in assessee’s books of account as claimed by the assessee nor the CIT(A) examined the same. We are therefore of the view that the said addition is not sustainable in law. Accordingly, we direct the AO to delete the said addition. Ground 6 is allowed. Printed from counselvise.com ITA No.6217/DEL/2018 [A.Y 2015-16] Shri Dheeraj Chaudhary vs ACIT Page 8 of 10 13. Ground 7 relates to addition on account of deemed income from House property. The added an ad-hoc amount of Rs 1,00,000/- as deemed house property income on the ground that the assessee had shown no such income as against house property income declared in the previous AY. The assessee stated before the CIT(A) that the assessee being in Real Estate business, had rented out its inventory flat which was sold during AY 2014-15 and hence no house property income was shown in the impugned year. The AO/CIT(A) has neither examined the explanation of the assessee nor verified the factual position. We therefore are of the considered view that such ad-hoc addition as deemed income from House property is not justified without verification of facts and direct the AO to delete the said addition. Ground 7 is allowed. 14. The challenge in ground 1 to 4 to the assessment being made u/s 153A/143(3) without incriminating materials, are dismissed as the AO has validly assumed the jurisdiction u/s 153A on the basis of incriminating materials as discussed above. The ground 1 to 4 are dismissed. 15. In the result, appeal of the assessee in ITA No. 6217/DEL/2018 is partly allowed. Printed from counselvise.com ITA No.6217/DEL/2018 [A.Y 2015-16] Shri Dheeraj Chaudhary vs ACIT Page 9 of 10 The order is pronounced in the open court on 11.02.2026. -Sd/- -Sd/- [YOGESH KUMAR U.S.] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 11th February,2026. VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Printed from counselvise.com "