NITIN ARORA,DELHI V. DCIT, CENTRAL CIRCLE-14, DELHI

ITA 8283/DEL/2025

AI Insights

The case revolves around an appeal by the assessee, Sh. Pawan Garg, against the order of the CIT(A), which sustained an addition of Rs. 20,00,000 made by the AO under section 69 of the Income Tax Act, alleging it as unexplained investment in property purchased from Omaxe Group during the Assessment Year 2020-21. The AO's addition was primarily based on an excel sheet recovered from Omaxe Group by the investigation wing, which the AO interpreted as evidence of cash payments made by the assessee. However, the Tribunal found that the AO and CIT(A) relied on presumptions without concrete evidence, such as bank statements or payment vouchers, and denied the assessee the opportunity to cross-examine the witnesses whose statements were used as evidence.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 842360 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Appeal Filed On: 11-12-2025
• Other Referred Cases: Andaman Timber Industries v. CCE, CIT vs. SM Aggarwal, PCIT, Delhi V. Best Infrastructure (India) Pvt. Ltd., PCIT Vs. M/s. JPM Tools Ltd., M/s. Amarjot Singh Sohi HUF Vs. ITO, Anupama Vs. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Principle of natural justice; Borrowed satisfaction
• Section: 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘SMC’: NEW DELHI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER ITA No.8283/Del/2025 Assessment Year 2020-21 Assessee Sh. Pawan Garg, CA Respondent Sh. Manoj Kumar, Sr. DR Date of Hearing 15.01.2026 Date of Pronouncement 27.02.2026 ORDER PER C.N. PRASAD, JM, This appeal is filed by the assessee is directed against the order of the CIT(A), Delhi-26 dated 31.10.2025 for the A.Y. 2020-21 in sustaining the addition of Rs.20 lacs made u./s.69 of the Act as unexplained investment. 2. Heard rival submissions and perused the orders of the authorities below. The present appeal has been filed by the assessee against the order passed by the CIT(A) confirming the addition of Rs. 20,00,000/- made by the AO on account of the allegation that the assessee has paid a sum of Rs. 20,00,000/- to Omaxe Group for purchase of property during the AY 2020- Nitin Arora A-79, Wazirpur Industrial Area, Delhi-110052 PAN No.AAEPA8401D Vs DCIT Central Circle – 14 Delhi Assessee Respondent Printed from counselvise.com Page | 2 21 despite the fact that no such payment was made by the assessee and there is no evidence, whatsoever, in respect of said payment having been made in the AY 2020-21. The assessee has made detailed argument and submitted evidences and explanation in support of its contention that no such payment has been made. However, AO has brushed aside the contention which has also been confirmed by the CIT(A) ignoring the facts of the case. 3. The AO has solely relied on the excel sheet recovered by the investigation Wing from Omaxe Group. No further efforts have been made by the AO to make any further verification or investigation. The AO himself has admitted in the Assessment Order that even the Investigation Wing has made a texture of entries in excel sheet and based on that by indulging into surmises it has been assumed that assessee would have made payment in cash. This is only an assumption. 4. It is noted that even as per excel sheet provided by the AD it has been clearly mentioned that Omaxe Group has received a sum of Rs. 20,00,000/-on 17.07.2015. This amount was reversed on 31.01.2017 by passing a journal entry and again brought back by way of journal entry on 30.01.2020. Accordingly, there is no payment mentioned of having cash being paid on 30.01.2020 and hence, no addition is sustainable for the AY 2020-21. From the above, it is clear that AG is only making a guess work. 5. During the course of search proceedings on Omaxe Group (third party) on 14.03.2022, alleged excel sheet was found, Printed from counselvise.com Page | 3 wherein it was mentioned that assessee has made cash payment to Omaxe group for the property purchased. Further, AO has vaguely relied upon such excel sheet forwarded to him by Investigation wing, without carrying out any further investigation or bringing on record any further evidence, completely on borrowed satisfaction. Moreover, the statement of key individual of Omaxe Group. The statement were used to bring out a case against the assessee by the AO, who are in no way related to the assessee or its business. Moreover, the aforesaid statements have been collected at the back of the assessee without giving the assessee an opportunity to examine the same. 6. Further, there is nothing on record to demonstrate how these statements were utilized to draw any adverse inference against the assessee. It is also pertinent to note that the principles of natural justice form an integral part of procedural fairness and justness, thereby excluding the scope of arbitrariness. 11. Moreover, the assessee was debarred of any opportunity provided to cross examine the statements of such witnesses. The said action of the Id. AO is in sheer violation of principal of natural justice. The assessee's request for the cross examination of the person from Omaxe Group on the basis of whose statement, the excel sheet has been treated as evidence for making the addition has also been rejected by AO. 7. Reliance is placed on the following judicial pronouncements wherein it was held that no adverse inference Printed from counselvise.com Page | 4 can be drawn against the assessee on the basis of statement recorded without giving assessee to cross examine :- 1. Andaman Timber Industries v. CCE 2015 SCC On Line SC 1051 2. CIT vs. SM Aggarwal 293 ITR 43 3. PCIT, Delhi V. Best Infrastructure (India) Pvt. Ltd. 2017 (8) TMI 250 250 dated 1-8-2017 Hon’ble Delhi High Court 4. This judgment has been affirmed by the Hon’ble Supreme Court in PCIT Vs. M/s. Best Infrastructure (India) Pvt. Ltd. 2018, (6) TMI 971 dated 14.05.2018 5. PCIT Vs. M/s. JPM Tools Ltd. Delhi 8. The Ld. Counsel for the assessee placed reliance on the following decisions wherein on identical facts held that the addition cannot be made without bringing on record any direct evidences against the assessee. The addition cannot be made only on the basis of presumption and assumptions:- 1. M/s. Amarjot Singh Sohi HUF Vs. ITO in ITA No.1065/Chd/2025 dated 07.01.2026 2. Anupama Vs. ITO in ITA No. 972/Chd/2025 dated 08.12.2025 9. The Ld. Counsel submitted that the addition is made on the basis of excel sheet. Even otherwise, if the alleged excel sheet is taken into account, & showed a receipt of Rs. 20,000 on 17.07.2005, which was reversed on 31.01.2007, and brought back on 30.01.2020, the Investigation Wing's theory were correct, the amount should have been taxed in FY 2005-06, not FY 2019-20. The allotment letter was issued on 16.01.2020, Printed from counselvise.com Page | 5 making it irrational for a cash payment to be recorded 15 days later on 30.01.2020, as such components are typically paid simultaneously with the allotment. No clarification has been even given in the statement of the third party regarding the cash received by Omaxe Ltd. specifically by assessee. It was nowhere specifically stated about receiving any cash payment from assessee. Moreover, no other document has been provided by AO regarding the receipt of such cash amount such as Day Book, Vouchers, Loan receipt ledgers or any other agreement. In fact, even in the Excel sheet, the figure written is only Rs. 20,000. The AO has multiplied it by 100 and made Rs. 20,00,000/- as payment in cash. The Ld. CIT(A) has also accepted the findings given by the AD. It is only the presumption of the AO that the figure of Rs. 20,000 may be read as Rs. 20,00,000/- and the presumption of the AO have been confirmed by the Ld. CIT(A) without any evidence bringing on record. The addition made on presumption cannot be sustained. The AO has made the addition just on the basis of an Excel sheet entry of Rs. 20,000/- by multiplying it with 100 without bringing on record any concrete evidence for the same. The CIT(A) has also accepted the presumption of the AO and confirmed the addition. There is no document available with the AO for prompting him to multiply the figure of Rs. 20,000/-by 100 making it Rs. 20,00,000/-, It is just a presumption or suspicion. Reliance was placed on the judgement of Hon'ble ITAT Chandigarh in the case \"ANUPAMA GUPTA vs. ITO, Ward Chandigarh, ITA 972/CHD/2025, DATED 08.12.2025 (supra). Printed from counselvise.com Page | 6 10. I find considerable merit in the submission of the Ld. Counsel for the assessee. On identical facts in the case of Amarjot Singh Sohi Vs. ITO (supra) Chandigarh Bench of the Tribunal has considered the similar transactions where the AO alleged that the assessee has paid Rs. 8 lacs to M/s. Omaxe Ltd. in lieu of purchase of property and the Tribunal held as under :- 2. It emerges that pursuant to receipt of certain information that the assessee paid cash of Rs.8 Lacs to M/s Omaxe Ltd. in lieu of purchase of shop besides making payment through banking channels, the case of the assessee was reopened and notice u/s 148 was issued on 15-03-2024, The said information stem from search action by the department on Omaxe group and statement recorded from officers of that concern us 132(4) of the Act. It transpired that the assessee purchased a shop from Omaxe group in its project situated at Mullanpur. In reply to show-cause notices of Ld. AO, the assessee contended that all the payments were made through banking channels and denied having made any cash payment in the said transaction. The details of payments as made by the assessee were also furnished to Ld. AO. However, considering the statement of officers of M/s Omaxe Ltd u/s 132(4) regarding data pertaining to cash payment gathered from the electronic device wherein the details of assessee making cash payment was mentioned, the assessee's submissions were rejected by Ld. AO. As per electronic data, the assessee allegedly made payment of Rs. 8 Lacs. In the electronic data, the amounts mentioned in the excel sheet was suppressed by factor of \"100\", Considering the factual matrix, Ld. AO made addition of Rs. 8 Lacs u/s 69 r.w.s. 115BBE of the Act and framed the assessment. The Ld. CIT(A) upheld the action of Ld. AO. Aggrieved, the assessee is in further appeal before Tribunal. 3. From the facts, it clearly emerges that the assessee has, all along, denied having made any cash payment in the transaction. The whole case of Ld. AO stem from search action on the seller group coupled with statement of officers recorded therein. Apparently, one excel sheet has been found which allegedly contain details of cash payment on sale transaction. In the Printed from counselvise.com Page | 7 excel sheet, the assessee is shown to have made payment of Rs.8 Lacs on the impugned transaction. However, the assessee has denied the same and contended that all the payments were made pursuant to written agreement and the payments were through banking channels only. The details of such payment have duly been furnished to Ld. AO. No opportunity of cross-examination has ever been provided to the assessee which is in violation of principle of natural justice. In my considered opinion, the onus was on Ld. AO to prove with cogent evidence that cash was exchanged in the transaction. The assessee has fumished all the documentary evidences as available with him to support the contention that all the payments were made through banking channels only. The confirmation of payment has duly been furnished by the assessee from M/s Omaxe Ltd. which is kept on Page No.30 of the paper book. The payments are duly supported by bank statements and the same are reflecting in Form No. 26AS of the assessee. The assessee has filed affidavit to the effect that no cash has even been paid to M/s Omaxe Ltd. The assessee could not be asked to prove the negative. In my opinion, the assessee has duly discharged its onus whereas the allegations of Ld. AO remain unsubstantiated. It is trite law that no addition could be made on mere presumptions and assumptions. Considering the facts and circumstances of the case, the impugned addition is not sustainable. I order so. The Ld. AO is directed to re-compute the income of the assessee. 4. The appeal stand allowed. 11. Similarly the Chandigarh Bench of the Tribunal in the case of Anupama Gupta Vs. ITO (supra) held as under :- 7. We have considered the findings given by the Assessing Officer in the assessment order and the Ld. CIT(A) in the appellate order. We find that the lindings given by the authorities below are based on an Excel sheet found during the search operation of the Omaxo Group. In fact, even in the Excel sheet, the figure written is only Rs. 8000. The Assessing Officer has multiplied it by 100 and made it Rs. 800000/- as payment in cash. The Ld. CIT(A) has also accepted the findings given by the Assessing Officer. The Id. AR argued that the addition made by the Assessing Officer and sustained by the Ld. CIT(A) are without any concrete Printed from counselvise.com Page | 8 evidence against the Assessee. He further argued that it is only the presumption of the Assessing Officer that the figure of Rs. 8000 may bo read as Rs. 800000/-and the presumption of the Assessing Officer have been confirmed by the Ld. CIT(A) without any evidence bringing on record. The AR argued that the addition made on presumption should not be sustained. 8. We have considered the findings given by the AO as well as by the Ld. CIT(A). We find that the AO has made the addition just on the basis of an Excel sheet entry of Rs. 8000/- by multiplying it with 100 without bringing on record any concrete evidence for the same. The Ld. CIT(A) has also accepted the presumption of the Assessing Officer and confirmed the addition. We find that there is no document available with the Assessing Officer for prompting him to multiply the figure of Rs. 8000/-by 100 making it Rs. 800000/-It is just a presumption or suspicion. 9. We are of this considered view that in any matter whatsoever a strong, a suspicion made without brining on record any concrete evidence, no addition can be made/sustained. Therefore, we are not inclined to sustain the findings given by the Ld. CIT(A) on this issue. Assessee's appeal on this issue is accordingly allowed. 12. Facts being identical respectfully following the above said decisions, I direct the AO to delete the addition made u/s.69 of the Act. 13. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 27.02.2026. Sd/- [C.N. PRASAD] JUDICIAL MEMBER Dated: 27.02.2026 Printed from counselvise.com Page | 9 NEHA , Sr.P.S.* Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "