INCOME TAX OFFICER WARD-28(5), DELHI V. RAJENDER, DELHI

ITA 3477/DEL/2024

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which had deleted the additions made by the AO regarding unexplained investments and income. The AO had initially made these additions following an assessment under sections 147 and 144 of the Income Tax Act, 1961, suspecting that income had escaped assessment due to non-filing of returns by the assessee, who had allegedly given an unsecured loan and made a time deposit. The CIT(A) admitted additional evidence provided by the assessee, which the AO failed to verify or contest, leading to the deletion of the additions. The Tribunal upheld the CIT(A)'s decision, dismissing the Revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711562 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: OM PRAKASH TIWARI
• Keywords: Additional evidence; Reasonable cause; Unexplained investment; TDS
• Section: 147; 148; 69; 2

Judgement Text

"ITA No.3477/Del/2024 Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘B’: NEW DELHI BEFORE SHRI YOGESH KUMAR U.S, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.3477/Del/2024 [Assessment Year: 2018-19] Income Tax Officer, Ward 28(5), Room No. 1202, Block E, Civic Centre, Delhi 110002 Vs Shri Rajender, 448, Chauhan Mohalla, Madanpura Khadar, Sarita Vihar, Delhi - 110076 PAN- AVQPR9368B Revenue Assessee Revenue by Shri Rajesh Kumar Dhanesta, Sr. DR Assessee by Shri Om Prakash Tiwari, CA Date of Hearing 22.07.2025 Date of Pronouncement 25.07.2025 ORDER PER MANISH AGARWAL, AM, This appeal by the Revenue is directed against the order of the Commissioner of Income Tax, National Faceless Appeal Centre, Delhi [CIT(A), in short], dated 30.04.2024 in Appeal No. NFAC/2017-18/10229136 for Assessment Year 2018-19, passed under section 250 of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) arising out of the assessment order dt. 20.03.2023 passed u/s 147/144 of the Act. 2. Brief facts of the case are that AO had information that assessee has given unsecured loan of Rs.1,00,00,000/- to M/s Nitco Technology and since the assessee has not filed the Income tax Return, the income chargeable to tax has escaped assessment. Accordingly, proceedings u/s 148A were initiated Printed from counselvise.com ITA No.3477/Del/2024 Page | 2 and order u/s 148A(d) of the Act was passed on dated 30.03.2022 after considering the material available on record. Thereafter, with prior approval of the PCIT, Delhi-10, notice u/s 148 of the Act was issued on 30.03.2022. However, the assessee failed to comply any of the notice issued by the AO, therefore, a final show cause notice was issued by the AO. As the said final show cause notice also remained unanswered, the AO completed the assessment u/s 147 r.w.s.144 of the Act at a total income of INR 2,03,62,246/- by making following additions: 1. Unsecured loan of Rs. 1.00 crores given to Nitco Technology as unexplained Investment u/s.69 of the Act and provision of section 115BBE of the Act are invoked; 2. Time deposit of Rs. 1,01,68,750/- with Punjab and Sindh Bank as unexplained investment under section 69 of the Act and provision of section 115BBE of the Act are invoked; 3. Interest received of Rs.1,93,496/- from Punjab and Sindh Bank taxed as income from other sources. 3. Against this order, assessee preferred an appeal before the ld. CIT(A) and filed additional evidence in support of the claim alongwith the appeal memo. The ld. CIT(A) send all these evidences to the AO and asked to furnish remand report but the AO failed to submit any report. Thus the ld. CIT(A) after admitting the additional evidences so filed by the assessee, consider the same on merits and deleted the additions made towards the unsecured loan to M/s Nitco Technology and time deposit and confirmed the addition towards the interest income on FDR. Printed from counselvise.com ITA No.3477/Del/2024 Page | 3 4. Aggrieved by the said order of the ld. CIT(A), the revenue filed present appeal before the Tribunal wherein following grounds of appeal are taken by the revenue: 1. “That on facts and circumstances of the case and in law, the CIT(A) has erred in admitting additional evidence even though the assessee did not file any submission during the assessment proceedings. 2. That on facts and circumstances of the case and in law, the CIT(A) has erred in not providing sufficient time to the AO for examining additional evidence filed by the assessee due to which the same remained unverified.” 5. The appeal is filed delayed by 30 days for which an application was filed by the AO wherein it is stated that the AO who has filed the appeal has joined the charge on 15.07.2024 and taken over the physical charge on 16.07.2024 only. In view of the above facts and circumstances, the delay in filing appeal by 30 days occurred which may kindly be condoned. 6. After considering the reasons stated by the AO in the delay condonation petition filed, we find there was sufficient and reasonable cause with the AO in filing the appeal delayed. Accordingly, we condone the delay and admit the appeal for adjudication. 7. Before us, ld. Sr. DR submitted that the assessee has not participated in the assessment proceedings despite of various opportunities provided by the AO which is apparent from the assessment order. He further submitted that ld. CIT(A) admitted the additional evidences filed by the assessee without providing adequate opportunity to the AO to verify the same and submit the remand report to ld. CIT(A). He thus requested to send the Printed from counselvise.com ITA No.3477/Del/2024 Page | 4 matter back to the file of the AO for examination of the details furnished by the assessee. On merits, ld. Sr. DR placed reliance on the order of the AO and requested for restoration of the additions made by AO. 8. On the other hand, ld.AR of the assessee submits that assessee had not received any notice issued by AO and when he received the intimation of passing the assessment order, he filed the appeal before the ld. CIT(A) and also filed all the relevant details in support of the source of investment in FDR and loan given as additional evidences. During appellate proceedings, the appellant has submitted that he is a farmer having agricultural land and does not have taxable income and therefore, does not file his regular return of income. It was further submitted by ld. AR that assessee had received compensation of Rs. 3,18,04,208/- from the State Government of Haryana towards compulsory acquisition of agricultural land in terms of Gazette notification No. 3212-R-2010 dated 09.12.2010 and compensation was received by award No. 25 dated 29.12.2015. The ld. AR stated that in support the same, copy of bank account No. 03361000005562 with Punjab & Sindh Bank, Sarita Vihar, New Delhi, copy of letter issued from Land Acquisition Officer dated 05.12.2015 reflecting amount of compensation of Rs. 3,18,04,208/-, Copy of 26AS for FY 2016-17 showing Time Deposit amount of Rs. 1,01,68,750/- and Copy of 26AS for FY 2017-18 showing entry of interest amount of Rs. 1,93,496/- were submitted as additional evidences before the ld. CIT(A). The ld. AR further stated that all these evidences were filed alongwith the Printed from counselvise.com ITA No.3477/Del/2024 Page | 5 appeal memo and ld.AO despite of sufficient opportunity, had not submitted his comments on the documents so filed as additional evidences. He further submitted that ld. CIT(A) by observing that these are crucial and goes to the root of the matter, had admitted the same and after considering and verifying the contents of these documents, deleted the additions. He thus, prayed for the confirmation of the order of ld. CIT(A). 9. Heard both the parties and perused the material available on records. A perusal of the order of ld. CIT(A) clearly shows that the ld. CIT(A) has send the additional evidences filed by the assessee to the AO for his comments. When the AO has failed to submit remand report, ld. CIT(A) proceeded to decide the appeal after considering the details filed by the assessee. Before us, no reason was given for non-submission of remand report by AO, and a request is made to remand back the matter to the file of AO. It is undisputed fact that assessee is an agriculturist and received compensation on the compulsory acquisition of his agricultural land by Government of Haryana, which was received in the year 2016. It is also established by the assessee that the amount of compensation of Rs. 3,18,04,208/- was the immediate and only source for making investment in FDR and for providing loan to M/s Nitco Technology. The ld. CIT(A) after verifying these facts from the documents filed as additional evidences, had deleted the additions by making following observations: 5.3 “At the Outset, I admit the additional evidences furnished during the course of appeal proceedings as the same are found directly related to the additions and necessary to dispose the appeal. The additional evidences furnished by the appellant was forwarded to the AO for consideration and to verify the Printed from counselvise.com ITA No.3477/Del/2024 Page | 6 facts and accordingly remand report was requisitioned. However, no remand report was submitted by the AO. I have carefully considered the rival submission and documentary evidences furnished by the appellant and also the findings in assessment order. It is observed that appellant was farmer during the year and did not have income more than the amount not chargeable to tax. Thus, the appellant was not required to file his return of income for the year under consideration. On verification of bank account of the appellant, It is observed that appellant received an amount of Rs. 3,18,04,208/- from Haryana State Government (HUDA) on compulsory acquisition of agricultural land in his bank account during FY 2016-17 on 20.08.2016. Thereafter, an FD of Rs. 1,00,00,000/- was created on 05.09.2016 out of balance amount. Thereafter on 31.07.2017 the amount was received as credited in bank account as FD closures. It is noticed from the bank statement that on the same day i.e. on 31.07.2017 an amount of Rs. 1,00,00,000/- was given to the Nitco Technology and the same was received back on 13.03.2018 and on 23.03.2018 from Nitco Technology in the same Financial Year. The entries in bank passbook are self explanatory and show the amounts. On verification of 26AS for FY 2017-18 pertaining to AY 2018- 19, it is noticed that appellant received interest amount of Rs. 1,93,496/- on which TDS amount is 19,350/-.Perusal of records, it is clear that appellant has explained the sources of unsecured loan of Rs. 1,00,00,000/- given to Nitco Technology during FY 2017-18. It is also observed that investment in FDRs of Rs. 1,00,00,000/- was made in FY 2016-17 and not in FY 2017-18 and it was made from explained sources. It is also observed that the transactions made by the appellant were genuine and from explained sources. However interest of Rs. 1,93,496 earned during the year by the appellant is subjected to be taxed. 5.4 Keeping in view of the facts of the case and having regard the documentary evidences, it is my considered view that addition of Rs. 1,00,00,000/- on account of unsecured loan to Nitco Technology and addition of Rs. 1,01,68,750/- on account of investment in FDRs is unnecessary and unwarranted. The total addition of Rs. 2,03,62,246/- is hereby deleted. Hence AO is directed to delete the same. The grounds of appeal are allowed.” Printed from counselvise.com ITA No.3477/Del/2024 Page | 7 10. From the perusal of the observation of ld. CIT(A), it could be seen that he has followed the due procedure for admission of the additional evidences filed by assessee under Rule 46A of Income Tax Rules, 1962 by sending the same to the AO with the directions to consider and verify the facts and when the AO had failed to do so, the CIT(A) used his coterminous powers and proceeded to verify the details filed by the assessee. Before us also, the revenue except requesting for remand back the matter, has failed to controvert the findings given by ld. CIT(A) which are based on the due verification of the documents filed by the assessee as additional evidences. Under these circumstances and on careful consideration of the facts of the case, we find no infirmity in the observations made by ld. CIT(A) while deleting the additions. Thus, we do not interfere in the findings of ld. CIT(A) which are hereby upheld. Accordingly both the grounds of appeal of the revenue are dismissed. 11. In the result, appeal of the revenue is dismissed. Order pronounced in the open court on 25.07.2025. Sd/- Sd/- (YOGESH KUMAR U.S) JUDICIAL MEMBER Dated: 25.07.2025. *Amit Kumar, Sr.P.S* (MANISH AGARWAL) ACCOUNTANT MEMBER Printed from counselvise.com ITA No.3477/Del/2024 Page | 8 Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "