NAMAN KHANNAH,DELHI V. DCIT,CENTRAL CIRCLE-8, DELHI

ITA 3332/DEL/2025

AI Insights

This case involves an appeal by Naman Khannah against the order of the Commissioner of Income Tax (Appeals)-24, New Delhi, which confirmed the addition of Rs. 4,25,560 to the assessee's income for the Assessment Year 2017-18. The addition was based on unaccounted money identified during a search operation under section 132 of the Income Tax Act, 1961, in the premises associated with M/s H.S. Imper group. The Tribunal found that while the assessee did not fully prove the source of cash deposits, the addition needed to be reduced under the peak credit theory. Furthermore, it was determined that the assessee should not be assessed under section 115BBE as the transactions in question occurred before the statutory provision came into effect.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831820 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: misc
• Appeal Filed On: 20-05-2025
• Other Referred Cases: S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANKUSH KALRA
• Assessee Lawyers: VINAY CHAWLA
• Keywords: Peak credit
• Section: 132

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘E’: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTNAT MEMBER ITA No.3332/DEL/2025 [Assessment Year: 2017-18] Naman Khannah, C-5, Pamposh Enclave, Greater Kailash-I, New Delhi-110048 Vs Dy. Commissioner of Income Tax, Central Circle-8, New Delhi PAN-AXAPK5943R Assessee Revenue Assessee by Shri Vinay Chawla, Adv. Revenue by Ms. Ankush Kalra, Sr. DR Date of Hearing 19.01.2026 Date of Pronouncement 19.01.2026 ORDER PER AMITABH SHUKLA, AM, This appeal filed by the assessee is against order dated 28.03.2025 of the learned Commissioner of Income Tax (Appeals)-24, New Delhi, [hereinafter referred to as ‘ld. CIT(A)] arising out of assessment order dated 31.03.2023 passed under section 153C of the Income Tax Act, 1961 pertaining to Assessment Year 2017-18. The word ‘Act’ herein this order would mean Income Tax Act, 1961. 2. Brief facts are that the assessee has filed the return of income declaring Income of Rs.12,18,840/-. The assessee had shown Income from Business, Printed from counselvise.com ITA No.3332/Del/2025 Page 2 of 4 rental Income and Bank Interest, Income from Other Sources and Income from Other sources. A search action u/s 132 of the Act was conducted on 08.12.2018 in the M/s H.S. Imper group of cases wherein the office premise of M/s Dengen Products India LLP, where Sh. Prateek Chitkara is partner, was also covered. The ld. AO had noted that the assessee was participating in a private chit activity run by above persons. The ld. AO has added a sum of Rs. 4,25,560/-to the Income of the Assessee treating on the basis of peak receipts appearing in diaries, as unaccounted money us 69A read with section 115BBE of the Income Ta Act from undisclosed sources and added to the income of the assessee w/s 69 of Income Tax Act. That the assessment proceedings were initiated under section 153C of the IT Act in the case and above-mentioned addition were made by the Assessing Officer. In appeal the ld. CIT(A) confirmed the addition made by the ld. AO. 3. Per Contra, the ld. Sr. DR, Ms. Ankush Kalra, placed reliance upon the orders of the authorities below. 4. The ld. Counsel for the assessee reiterated the submissions made before the ld. CIT(A) 5. We have heard rival submissions in the light of material placed on record. The ld. Counsel for the assessee has invited our attention to the assessee’s financials so as to allude that the addition confirmed by the ld. CIT(A) is unwarranted. The Revenue could hardly dispute that the ld. AO have nowhere Printed from counselvise.com ITA No.3332/Del/2025 Page 3 of 4 specifically rebutted all these supporting documents in the assessment proceedings. The fact however remaining, that the assessee has not fully proved the source of improvement of cash deposit despite the fact that it is stated to be engaged in the business of running of cabs on hire/contract basis. Be that as it may, we are of the considered view that the learned AO could not have summarily rejected the assessee’s foregoing explanation before applying the peak credit theory. Accordingly, in the interest of justice, it is deemed appropriate that lumpsum addition of only Rs.2,12,780/- lakhs in the given facts would be just and proper with a rider that the same shall not be treated as precedent. Necessary computation shall follow as per law. 6. So far as assessee’s assessment under section 115BBE is concerned, we quote S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) that the impugned statutory provision would come into effect on the transaction done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under the normal provision as per law. 7. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 19th January, 2026. Sd/- Sd/- [SATBEER SINGH GODARA] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 20.01.2026 Shekhar Printed from counselvise.com ITA No.3332/Del/2025 Page 4 of 4 Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi, Printed from counselvise.com "