GAURAV BHATIA,DELHI V. ITO WARD-70(5), DELHI

ITA 5531/DEL/2025

AI Insights

The case involves Gaurav Bhatia, who appealed against the order of the National Faceless Appeal Centre (NFAC), which had confirmed the addition of Rs. 30,70,000 to his income for the assessment year 2017-18. This addition was initially made by the Income Tax Officer (ITO) under section 69A read with section 115BBE due to unexplained cash deposits during the demonetization period. The assessee contended that these deposits were cash gifts received during his marriage. The Tribunal, after considering the arguments and evidence presented, including affidavits and a list of persons who gave gifts, ruled in favor of the assessee, citing a relevant precedent from the Madras High Court that transactions post-01.04.2017 fall under the purview of section 115BBE.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831372 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 08-09-2025
• Other Referred Cases: SMILE Microfinance Ltd. vs. ACIT in WP(MD) no. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR
• Assessee Lawyers: K. SAMPATH
• Keywords: Gift
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘SMC’ : NEW DELHI) BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT ITA No. 5531/Del/2025 Asstt. Year : 2017-18 GAURAV BHATIA, VS. ITO, WARD 70(5), C-9, WESTERN COLONY, NEW DELHI NEW DELHI – 110 027 (PAN: APSPB5564K) (Appellant) (Respondent) Appellant by : Sh. K. Sampath, Advocate Respondent by : Sh. Manoj Kumar, Sr. DR. Date of Hearing 27.10.2025 Date of Pronouncement 22.01.2026 ORDER This appeal by the Assessee is emanating from the order of the NFAC, Delhi in Appeal No. CIT(A), Delhi-27/10157/2019-20 dated 03.7.2025. Assessment was framed u/s. 143(3) of the Income Tax Act, 1961 dated 12.12.2019 relating to assessment year 2017-18. 2. Brief facts of the case are that assessee is an individual who filed the return declaring total income of Rs. 2,73,320/- under the head ‘salary’ and ‘other sources’. The case was selected for Complete Scrutiny under CASS for the reason “Cash deposit during demonetization period”. Notice u/s. 143(2) was issued on 24.9.2018 and served upon the assessee by the ITO, Ward 71(4), New Delhi, who had jurisdiction over the assessee at the relevant point in time. Thereafter, the case was transferred to the ITO, Ward 70(3), New Delhi as the jurisdiction over the case lies with him. Further the notice u/s. 143(2) was issued by the ITO, Wards 70(3), New Delhi on 27.9.2018 and the same was duly served upon the assessee. Printed from counselvise.com 2 | P a g e Subsequently, the case was transferred to the ITO, Ward 70(5), New Delhi u/s. 120 of the Act. After considering the arguments and documents adduced by the assessee, the assessment was finalized and the impugned assessment order u/s. 143(3) was issued on 12.12.2019, determining the total income at Rs. 33,43,320/- which was arrived at after addition of Rs. 30,70,000/- within the scope of section 69A of the Act read with section 115BBE being the amount of cash deposited during the demonetization period in the bank account of the assessee with HDFC bank Karnataka Bank. Aggrieved, assessee appealed before the Ld. CIT(A), who vide his impugned order dated dismissed the appeal of the Assessee. Against the above action, assessee appealed before the Tribunal. 3. After hearing both the sides and perusing the records, I note that the main contention of the assesssee that the cash deposited in the bank account of the assessee was the cash gift (sagan) received by the assessee on the day of his marriage by the various relatives, family members and other invitees. The marriage was took place on 21.02.2016 on that day various cash gifts were received by the couple which assessee kept it with him and does not deposited in any bank account. Later when demonetization took place in November, 2016, assessee unwillingly has to deposit all the cash with him in the bank account and did the same. To support this contention, assessee enclosed the list of 348 persons who have given Sagan alongwith the amount of Sagan and also attached the copy of marriage invitation. Assessee has also uploaded affidavits sworn in by Shri Vijay Kumar Haritash and Anil Chawla, the Managers of assessee’s father, who apart from confirming the ceremonies on 17.02.2016 and 19.02.2016, confirmed that the assessee had received ‘sagan’ from friends and relatives. The assessee has also uploaded affidavit sworn in by his parents attempting to justify that ‘sagan’ was actually received. In view of the aforesaid background of the case, I am of the considered view that that the source of the cash deposits of Printed from counselvise.com 3 | P a g e assessee was cash gift received in the shape of ‘sagan’ on his marriage as a token of love and affection for which sufficient documentary evidence has been produced before the lower authorities on this count, which justifies the explanation relating to source of cash deposits, therefore, in my considered opinion, the addition of Rs. 30,70,000/- made u/s. 69A r.w.s. 115BBE of the Act deserve to be deleted. Hence, I hold and direct accordingly. Also it is noted that as far as assessment u/s. 115BBE of the Act is concerned, the Hon’ble Madras High Court in SMILE Microfinance Ltd. vs. ACIT in WP(MD) no. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.) has already settled the issue against the department that the law applies to the transaction on or after 01.04.2017 only. 4. In the result, the Assessee’s appeal is allowed. Order pronounced in the Open Court on 22.01.2026. Sd/- (MAHAVIR SINGH) VICE PRESIDENT Date: 22.01.2026 SRBhatnaggar Copy forwarded to: - 1. Appellant 2. Respondent 3. DIT 4. CIT (A) 5. DR, ITAT TRUE COPY By Order, Assistant Registrar, ITAT, Delhi Bench Printed from counselvise.com "