Appeal details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 312592 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
02-05-2025
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Assessment Year
2018-2019
Judgement Text
"ITA No.5955/Del/2024 Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “SMC” BENCH: NEW DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA No.5955/Del/2024 [Assessment Year : 2018-19] Firoz House No.181, Islamabad Bhoor Khatuli, Muzaffarnagar U.P.-251201 PAN-AAVPF3934B vs DCIT Central Circle Meerut APPELLANT RESPONDENT Appellant by Shri Dipanshu D Agrawal, Adv. Respondent by Shri Sanjay Kumar, Sr. DR Date of Hearing 09.04.2025 Date of Pronouncement 02.05.2025 ORDER PER PRADIP KUMAR KEDIA, AM : The captioned appeal has been filed at the instance of the assessee seeking to assail the First Appellate order dated 07.11.2024 passed by Commissioner of Income Tax (A)-3, Noida [“CIT(A)”] under s. 250(6) of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dated 11.03.2024 passed under s. 263/143(3) of the Act relevant to assessment year 2018-19. 2. As per the grounds of appeal, the assessee has challenged (a) additions of INR 12,00,020/- towards unexplained investment under s. 69A and; (b) addition of INR 2,00,000/- towards unexplained investment under s. 69 of the Act to the return of income of INR 3,87,600/-. 3. The contentions of the assessee are multifold:- (i) notice under s. 143(2) has not been issued while framing the assessment in the instant case; (ii) cash seized amounting to INR 12,00,020/- on 17.11.2012 from the possession of the assessee by Police, Khatauli, Muzaffarnagar has to be seen in ITA No.5955/Del/2024 Page | 2 the background facts. The assessee is doing ‘Kabadi business’ wherein old batteries were purchased from scrap holders and after short processing etc. the same were sold to the unregistered kabadi’s. During the year under consideration, the assessee has declared total receipts of INR 19,80,000/- and offered income under s. 44AD of the Act. The amount of INR 12,00,020/- do not belong to the assessee exclusively and the amount belongs to the assessee of INR 4,10,020/-, Vaseem Ahmed of INR 4,10,000/- and Islamuddin of INR 3,80,000/-. The aforesaid amount was payment collected from different persons against the scrap batteries supply. An affidavit of the other suppliers was filed before the lower authorities wherein other parties namely, Vaseem Ahmed & Islamuddin have deposed on oath that a part of the amount as noted above belongs to them. Once cash aggregating to INR 7,90,000/- pertaining to supplier namely, Vaseem Ahmed and Islamuddin are excluded, the remaining amount gets automatically explained and consummated in the turnover declared by the assessee. (iii) the amount of INR 2,00,000/- in aggregate towards payment made for purchase of commercial vehicle is out of past savings and having regard to the smallness of the amount, the additions made are not justified on the face of it. 4. It is the contention of the assessee that an affidavit has been filed to submit that aggregating to INR 7,90,000/- out of INR 12,00,020/- belong to other parties. The facts mentioned in the affidavit have not been refuted and therefore, should be believed. Reliance has been placed in the case of Senior Bhosale Estate vs ACIT [2019] 112 taxmann.com 134 (SC) and Kuldeep Kumar vs ITO reported in 107 ITR 241(Jodh.). It is further contention of the assessee that certain turnover declared in return of income (‘ROI’) also includes the remaining cash transaction in Kabadi business. Likewise, past years savings adequately covers source of purchase of commercial vehicle to the tune of INR 2,00,000/-. 5. Having regard to the smallness of amount involved and attendant circumstances, the explanation offered cannot be disbelieved and held implausible. When tested on the touchstone of preponderance of probabilities, ITA No.5955/Del/2024 Page | 3 the explanation offered appears fairly reasonable. The assessee has declared turnover of INR 19,80,000/- and also offered an income of INR 3,87,600/- which encompasses the cash attributable to the extent of INR 4,10,020/- belonging to the assessee. The remaining amount claimed to be belonging to other parties is supported by affidavits of respective parties. In totality, the benefit of doubt needs to go in favour of the assessee. The explanation towards source of purchase of commercial vehicle also appears plausible. Consequently, the additions made by the AO are deleted. 6. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 02nd May, 2025. Sd/- *Amit Kumar, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER ASSISTANT REGISTRAR ITAT, NEW DELHI "
AI Insights
The case involves an appeal by Firoz against the order of the Commissioner of Income Tax (Appeals) - 3, Noida, which upheld the additions made by the AO under sections 69A and 69 of the Income Tax Act, 1961, for the assessment year 2018-19. The additions pertained to unexplained investments totaling INR 14,00,020. The assessee contested that the cash seized, which was partly attributed to him, was actually belonging to multiple parties involved in a kabadi business, and that the remaining amount was from his past savings used for purchasing a commercial vehicle. The tribunal, after considering the affidavits and the turnover declared by the assessee, decided in favor of the assessee, deleting the additions made by the AO.
