OM PRAKASH KUKREJA,NEW DELHI V. ACIT CENTRAL CIECLE-9(RENUMBERED CC-18), NEW DELHI

ITA 640/DEL/2022

AI Insights

The case involves multiple appeals by the assessee, Om Prakash Kukreja, against the additions made by the Assessing Officer and upheld by the Commissioner of Income Tax (Appeals) for the assessment years 2007-08 to 2010-11. The primary issues revolved around the additions made on account of alleged unexplained loans, interest income, and an unexplained investment of Rs. 75,00,000 in A.Y. 2009-10. The Tribunal found that the documents and statements provided by the assessee did not sufficiently rebut the presumption of undisclosed income as per section 292C of the Income Tax Act. The Tribunal also noted that the affidavit filed by the assessee during the appellate proceedings was self-serving and lacked credible evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717744 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 11-04-2022
• Other Referred Cases: Pr. Commissioner of Income Tax V. Delco India Pvt. Ltd., Krishna Bhagwan Endowment Vs ACIT, Pr. Commissioner of Income Tax Central-2 V. Subhash Khattar
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMISHA S. GUPTA
• Assessee Lawyers: RAJESHWER PRASHAD PAINULY
• Keywords: Unexplained investment; Document seized; Documents seized; Retraction; Non compliance
• Section: 271(1)(c); 153A; 69; 80C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : E : NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITAs No.638 to 641/Del/2022 Assessment Years: 2007-08 to 2010-11 ITA Nos.642 to 646 & 632/Del/2022 Assessment Years : 2007-08, 2007-08 to 2009-10, 2009-10 & 2010-11 Om Prakash Kukreja, A-37, East of Kailash, New Delhi – 110 065. PAN: AAKPK8092Q Vs ACIT, Central Circle-9 (Renumerated CC-18), New Delhi. (Appellant) (Respondent) Assessee by : Shri Rajeshwer Prashad Painuly, Adv. Revenue by : Ms Amisha S. Gupta, CIT-DR Date of Hearing : 04.08.2025 Date of Pronouncement : 13.08.2025 ORDER PER ANUBHAV SHARMA, JM: These are appeals preferred by the assessee against the orders of the Commissioner of Income Tax (Appeals) (hereinafter referred to as Ld. First Appellate Authority or ‘the ld. FAA’ for short) in appeals filed before him against the orders of the ld. Assessing Officer (hereinafter referred to as the Ld. Printed from counselvise.com ITAs No.638 to 646 & 632/Del/2022 2 AO, for short). Further details of the orders of the lower authorities are as under:- ITA No. CIT(A) who passed the order Appeal No. & Date of order of the CIT(A) AO who passed the assessment order & Date of order Section of the IT Act under which the AO passed the order 638/Del/2022 CIT(A)-31, New Delhi. 752/20-21 Dated 23.08.2021 ACIT, Central Circle-9, New Delhi, date: 27.03.2014 153A r.w.s. 143(3); Quantum Appeals 639/Del/2022 - Do- 758/20-21 Dated 19.08.2021 - Do - - Do - 640/Del/2022 - Do - 759/20-21 Dated 23.08.2021 - Do - - Do - 641/Del/2022 - Do 761/20-21,Dated 23.08.2021 - Do - - Do - 642/Del/2022 - Do - 752/20-21, dated 23.09.2021 ACIT, Central Circle-9, New Delhi, date: 30.03.2017 Penalty Appeals 271(1)(c) 643/Del/2022 - 757/20-21, dated 24.09.2021 - Do - - Do - 644/Del/2022 - 754/20-21, dated 24.09.2021 - Do - - Do - 645/Del/2022 - 759/20-21, dated 23.09.2021 - Do - - Do - 646/Del/2022 - 756/20-21, dated 24.09.2021 - Do - - Do - 632/Del/2022 - Do - 753/20-21, Dated 24.09.2021 - Do - - Do - Printed from counselvise.com ITAs No.638 to 646 & 632/Del/2022 3 2. On hearing both the sides we find that one issue is common to quantum appeals for A.Y 2007-08 to 2010-11 and the same arises out of the fact of addition by AO on account of alleged interest earned by assesse on the loans advanced and further for AY 2007-08 ld. CIT(A) invoked powers of enhancement leading to additions u/s 69 of the Act for the loan amounts also which was followed in other years. Now with regard to these common addition of loan and interests it comes up that relevant facts and conclusion of ld. CIT(A) in AY 2007-08 can be reproduced for convenient understanding of the issue. Ld. CIT(A) has held in AY 2007-08 as follows; “9.3. Ground no. 2 is related to the unexplained loans amounting to Rs. 32,79,500/- and interest income thereon amounting to Rs. 7,87,080/- @ of 24% of the unexplaineed loan. In this regard, it is noted that during the search a sheet relating to various amounts advanced and working out interest thereon had been seized from the residence of the appellant. For better appreciation of the facts the said document, seized as Annexure A-2, page-1 is reproduced below:- …….scanned document… In his statement u/s 132(4) dated 10.02.2012 the appellant had stated as follows:- “Q33 I am showing you Annexure A-2 containing pages 1 to 75 found and seized during the course of search from your residence? Ans. The Annexure contains papers relating to Indirapuram Investment & other miscellaneous paper like bank statement which have been found & seized from my premise. I shall comment on the contents of these pages later on.\" 9.3.1. The appellant thus had admitted to the fact that the seized papers, which include the calculation sheet in question, had been seized from his residence and that the same was related to him. Further, as per the provisions of section 292C, the contents of the said documents are deemed to be true unless rebutted by the assessee through some credible evidences. The appellant was unable to discharge such onus of rebuttal during the Printed from counselvise.com ITAs No.638 to 646 & 632/Del/2022 4 search as well as thereafter during the assessment proceedings as well as appellate proceedings. It is interesting to note that the appellant was all along admitting that the said document pertains to him during the search as well as the assessment proceedings, but has for the first time in the instant appellate proceedings (which is the second round of proceedings) taken the stand that the said document was left by one Sh. Manoj, an Ex-employee of the AEZ Group and that it contained some vague notings pertaining to the said person. The about turn in the contentions of the appellant only demonstrate the inability of the appellant to explain the contents of the document in question. Further, no evidence has been brought forth to substantiate the above contention. Added to this, the appellant is also claiming that the document in question is a dumb document and cannot be used for attributing any income to the appellant. It would be pertinent to analyse the contents of the seized document, which are as follows:- Date Name Amount Interest Months 01.08.2007 MKJ 500000 100000 10 07.02.2007 SKN 1400000 56000 2 05.02.2008 SKN 600000 48000 4 07.03.2007 SKN 400000 40000 5 244000 TYRES 42000 Kausal 31000 Ranbir 50000 Insurance 6500 11.08.2008 Dr Arora 100000 11.08.2008 Om Prakash 150000 3279500 9.3.2. From the above notings in the seized document, it is seen that several amounts are shown to be advanced on interest to various persons as mentioned in abbreviation or full name. The interest rate is 24% per annum as can be inferred from the interest calculations on the principal amount. The document is therefore not a dumb document as claimed by the appellant. It clearly shows that amounts have been advanced on specific dates to specific persons at an interest rate of 24% per annum. All necessary details are contained in the document itself. The fact that the document was not a dumb one, was also obvious to the appellant which is why he has come up with the claim that it belongs to a third person, for the first time in the second round of appellate proceedings. The same claim has been made during the instant appellate proceedings, vide affidavit dated 24.03.2021. Again I find that the affidavit is merely a self serving document with no substantiating evidence. Moreover, the said affidavit has been filed more than 9 years after search. The affidavit filed by the appellant is accordingly held to be purely self-serving and is therefore rejected. The Printed from counselvise.com ITAs No.638 to 646 & 632/Del/2022 5 onus u/s 292C of rebutting the contents of the document has not been discharged by the appellant. Taking into account all the above facts and provisions of law, it is accordingly held that the amounts mentioned in the seized document are unexplained advances made by the appellant on which interest @ 24% has been charged. The AO has brought to tax the total of such advances viz. Rs.32,79,500/- and interest thereon @ of 24% per annum. However, as is evident from the document itself, the entire amount is not advanced in A.Y. 2008-09 but is spread across 3 years. From the dates mentioned against the amount, the year wise breakup of such advances is as follows:- Year Amount of advance (Rs.) A.Y. 2007-08 18,00,000 A.Y. 2008-09 12,29,500 A.Y. 2009-10 2,50,000 32,79,500 9.3.3. Accordingly, the amount advanced during A.Y. 2008-09 comes to Rs. 12,29,500/-. As discussed earlier the appellant has been unable to explain the same. Therefore, the said advances of Rs. 12,29,500/- are hereby held as unexplained advances u/s 69 of the IT Act, made by the appellant in the year under consideration. Further, interest @ 24% per annum on the cumulative advances of Rs. 30,29,500/- (Rs. 18,00,000/- + Rs. 12,29,500/-) which comes to Rs. 7,27,080/- is hereby held as undisclosed interest income for the year under consideration. Total undisclosed income and advances for the year are accordingly assessed at Rs. 19,56,580/- against those assessed by AO at Rs. 40,66,580/-. The appellant thereby gets a relief of Rs. 21,10,000/-. Accordingly, Ground no.2 is partly allowed.” 3. Thus based on aforesaid findings in other years also the additions were made as follows; S.No. A.Y Addition Amount Interest Total Addition 2007-08 18,00,000/- 64,000/- 18,64,000/- 2008-09 12,29,500/- 7,27,080/- 19,56,580/- 2009-10 2,50,000 7,87,080/- 10,37,080/- 2010-11 - 7,87,080/- 7,87,080/- 4. Now before us ld. AR has submitted that these documents were neither signed nor part of any books of accounts and its simply rough sheets only. All Printed from counselvise.com ITAs No.638 to 646 & 632/Del/2022 6 the above Additions are made on the basis of some unsigned, unverified and duly explained loose sheets only and are common for all the above said years under appeal. In Q.33 of statement U/s 132(4)/133A of the Act, 1961 of Assessee recorded on 10.02.2012 in which Assessee said “ I shall comment on the contents of these papers later on.” Ld. AR has submitted that during assessment proceedings reply dated 14.03.2014 and 18.03.20214 duly explained those sheets is nothing to do with Assessee point no. 1 explained about seized Annexure-2 Page No.1 and in point no.2 explained about seized Annexure-2 Page No.21 & 40. Please refer page no.39-42 of 2nd paper book. It was submitted that appellant has filed affidavit on dated 24.03.2021 as well and discussed the same on Para no.07 of Affidavit. Ld. AR relied the decision of Hon’ble High Court of Delhi in case of Pr. Commissioner of Income Tax V. Delco India Pvt. Ltd. (2016) 67 taxmann.com 357, submitting that when the Assessee is denying his liabilities by filling affidavit the additions is not sustainable. It was submitted that interest Income on alleged additions are estimated and spared over in all years while section 153A allows addition only based upon incrementing documents, as per settled law no estimation is allowed. 5. In this regard we find that a document relied by the ld.CIT(A) cannot be assumed to be a dumb document as the amounts advanced are correlated by specific dates and specific persons to whom it was lend. Interest calculation @24% per annum is very apparent by the figure arrived under the interest Printed from counselvise.com ITAs No.638 to 646 & 632/Del/2022 7 column. The head of document mention the date, period, amount and interest sufficiently establishes that the amount was given as loan as cash and this rough account was maintained by assessee. The affidavit filed by the assessee that it is planted document by third party is certainly a self-serving statement. The ld. DR has drawn our attention to para 10.5 of the order of the ld.CIT(A) for AY 2007- 08 wherein a reply of the assessee dated 18.08.2021 has been reproduced and the same sufficiently establishes that the name of these persons with initials ‘SKN’, ‘Dr. Arora’, ‘Om Prakash’ are not strange to the assessee and the assessee has tried to explain them by asserting that these amounts have been already considered in AY 2012-13. As for convenience, the findings of the ld.CIT(A) in para 10.6.1 for AY 2007-08 is reproduced below: “10.6.1. Appeal No. 752/20-21 From the above two seized documents it is clear that the amount of unexplained advances of Rs. 54,03,669/- as assessed for A.Y. 2012-13, arises only from seized documents at annexure A2, pages-21 and 40. The contents of annexure A2, page-1, as reproduced earlier are entirely different and from the dates of advances mentioned therein, it is clear that such advances pertain only to A.Ys. 2007-08 to 2009-10 and are not at all related to A.Y. 2012-13 as claimed by the appellant. Even the names of the persons mentioned in annexure A2, page- 1 on one hand and annexure A2, page-21 and 40 on the other hand are entirely different.Further, the dates mentioned in annexure A2, page-1 on one hand and annexure A2, pages-21 and 40 on the other hand are entirely different, and are separated by almost four years. Moreover, the amount of Rs. 54,03,669/- is exactly mentioned in both annexure A2, pages 21 as well as 40, but is nowhere mentioned in annexure A2, page-1, which contains totally different amounts, dates as well as persons. It is therefore obvious that the amount of unexplained advances of Rs. 32,79,500/- as mentioned in seized document at annexure A2, page-1 is totally distinct and separate from the amount of Rs. 54,03,669/- mentioned in annexure A2, pages 21and 40. In fact, the AO himself has assessed the advances of Rs. 32,79,500/-as per Annexure A2, page-1 in A.Y. 2008-09, which clearly indicates that the two amounts in question are totally different and arise out of independent transactions conducted at different dates as per the seized documents. Printed from counselvise.com ITAs No.638 to 646 & 632/Del/2022 8 Therefore it is clear that the AO has committed an inadvertent error in mentioning page-1 alongside pages 21 and 40 in the order for A.Y. 2012- 13. This error has also carried forth in the appellate order for A.Y. 2012- 13, in which the appellant's appeal was dismissed due to non compliance and hence the CIT(A) did not have opportunity to go through the facts and the seized material in detail. Now, the appellant is taking undue shelter in this inadvertent mistake made by the AO. The contention of the appellant that the contents of annexure A2, page-1 have already been considered in the assessment for A.Y. 2012-13 is therefore untenable for reasons cited above. This contention of the appellant also shows that he has no other tangible explanation for the entries in the seized document at annexure A2, page-1, which is a speaking document containing the dates as well as amounts of advances and the interest rate charged. Accordingly the contentions of the appellant are not tenable and further, the contents of the seized document at annexure A2 page-1 have not at all been rebutted by the appellant in accordance with the onus cast on him as per the provisions of Section 292C. Therefore, on the same reasoning as stated in the appellate order for A.Y. 2008-09 quoted above, it is held that unexplained advances of Rs. 18,00,000/- were made during A.Y. 2007-08 and unaccounted interest income of Rs. 64,000/- was derived thereon. Accordingly, the income of the appellant for A.Y. 2007-08 is hereby enhanced to the extent of Rs. 18,64,000/-u/s 69 of the I.T. Act, 1961. 1 am also satisfied that the appellant has concealed particulars of his income to the extent of Rs. 18,64,000/- on account of unexplained advances and undisclosed interest. Accordingly, penalty proceedings u/s 271(1)(c) are hereby initiated in respect of the same. Penalty notice u/s 271(1)(c) is separately issued on this account.” 5.1 Thus, the findings of the ld.CIT(A) that the content of Annexure A-2 page 1 which is the foundation for addition for the years involved in these appeals require no interference. The respective grounds raised by assesse in quantum appeals have no substance. 6. The second issue arises out of addition of Rs. 75,00,000/- for A.Y 2009- 10. The Ld. A.O made addition of Rs. 75,00,000/- by stating that in Para 04 to 5 of Assessment Order as under: “During the course of search on 17.08.2011 at the corporate office of AEZ Group hard disk found (file name 'FBA Details.xls.) and seized as annexure Printed from counselvise.com ITAs No.638 to 646 & 632/Del/2022 9 A-27 disclosed that the assessee has made payment in cash amounting to Rs. 75 Lakhs for purchase of a flat Aloha Project Gurgoan. Similarly, the husband of assessee has also invested the same amount and in the course of search at the residence of the assessee a sale agreement was found and seized as annexure A-1 pages 24 to 35 as per which the assessee has invested Rs. 75 Lakh each alongwith his wife The statement of Shri. O.P Kukreja was recorded in which he has admitted the above cash investment Thus as is evident from the statement quoted above that the amount of Rs. 75,00,000/- has been invested by the assessee out of her undisclosed income and same is being added to the income of the assessee as unexplained investment made by him during the year. ” 6.1 The Ld. CIT(A)-31 confirmed the addition of Rs. 75,00,000/- by stating that in Para 9.4.10:- “9.4.10. The appellant has further contended that Hon'ble IT AT, Delhi vide order dated 13.02.2018, in the case of Krishna Bhagwan Endowment Vs ACIT in ITA No. 423/Del/2015, has held that where addition has been made without there being any independent material available supporting such additions, the additions are not justified. It was further held in that case that addition cannot be made in the case of the assessce without corroborating evidences, merely on the basis of surrender made by Sh. I.E. Soomar, who was a third party. The appellant has pointed out that the above stated case emanates from the same search in the case of AEZ Group, wherein Sh. I.E. Soomar, being one of the clients of AEZ Group had admitted to paying unaccounted cash for purchase of a property from AEZ Group. The IT AT held that the statement of Sh. Soomar cannot be used in the case of the assessee endowment, which also as per the papers seized from AEZ Group, had paid cash for purchase of property but had denied doing so. I have gone through the case cited by the appellant and find that the case of the appellant is materially different from the case of Krishan Bhagwan Endowment, in two crucial aspects. Firstly, no evidence indicating any cash payment was found in the case of the said endowment, whereas in the case of the appellant the copy of agreement which confirms payment of Rs. 75,00,000/- was found and seized from his residence. Secondly, in the case of the Endowment, the assessee had not agreed to the payment of unaccounted cash for purchase of property, whereas in the case of the appellant, he had duly stated and admitted in the statement under bath u/s 132(4) regarding payment of unaccounted cash of Rs. 75,00,000/- for the purpose of purchasing the property. This statement was not only reconfirmed on 21.03.2012 before the Investigation Wing, but was also never retracted. As a result, the case of the appellant not only has original seized evidence in the shape of the agreement for purchase of flat but also has corroborating evidence in the shape of statement of Sh.O.P. Kukreja Printed from counselvise.com ITAs No.638 to 646 & 632/Del/2022 10 u/s 132(4) as well as the documents seized from AEZ Group. It is significant that all the three evidences described above are in conformity with each other leaving no doubt in the fact that the appellant had indeed invested the amount of Rs. 75,00,000/- for purchase of flat. It is therefore held that the payment of Rs. 75,00,000/- in cash made by the appellant is an unexplained investment u/s 69 of the I.T. Act and accordingly the addition of the said amount is upheld. Accordingly, Ground no. 2 is dismissed. 7. Ld. AR submitted that during the Assessment Proceedings, Assessee filed a reply in which he clearly stated that the reply to Q.23 of statement U/S 132(4)/133A as given by assessee on 10.02.2012 is under pressure and he was not feeling well. It was submitted that this additions is made on the basis of Photo copy of Agreement without any corroborative evidence and based upon sole admission of assessee during search, which was later on retracted by the Assessee while assessment proceedings were in progress. Ld. AR relied upon on decision of Hon’ble High Court of Delhi in case of Pr. Commissioner of Income Tax Central-2 V. Subhash Khattar ITA 60/2017 order dated 25.7.2017 to contend that same incriminating material was disbelieved in case of another assesse. 7.1 It was also submitted that more so the photo copy of agreement itself says that it is being done 01.04.2009 i.e. AY 2010-11 and not in the assessment year 2009-10. It was also contended no cross examination or factual position was put on record whereas the fact is that no such unit/ flat was allotted to the assessee. 8. In regard to this addition, we are of the considered view that the incriminating document in the form of copy of agreement found from assesse Printed from counselvise.com ITAs No.638 to 646 & 632/Del/2022 11 sufficiently contain the conditions of payment of Rs.75 lakhs in cash out of total sale consideration of Rs.78 lakhs. Same is duly admitted in statement of assesse u/s 132(2) of the Act. The retraction of this statement, which is now relied by the ld. AR does not reflect the genuine retraction, but, only a desperate attempt as the statement u/s 132(4) of the Act was recorded on 10.02.2012 and the affidavit of retraction was submitted in the appellate proceedings on 24.03.2021. The presumption drawn by the ld.CIT(A) on the basis of section 292C of the Act coupled with the statement being corroborated by the content of the seized document, agreement, was sufficient to make the addition. The decision in the case of Subhash Khattar (supra) is not applicable in the case of the assessee. The alleged document recovered during search in the case of AEZ Group have been corroborated by agreement found in the search of the assessee. In that case there was no allegation that any incriminating material found in search of other person was corroborated by any material found in search of assesse also. Therefore, the said decision of the Hon’ble High Court has no bearing on the case of the assessee. The relevant ground has no substance and decided against the assesse. 9. The third issue is regarding the disallowance of Rs.72,337/- on account of U/s 80C of payment of life insurance premium for A.Y 2009-10 and Rs. Rs.79,564/- for AY 2010-11. The Ld. A.O made disallowance of Rs.72,337/- by stating that in Para 6.1 of Assessment Order for AY 2009-10 as under: Printed from counselvise.com ITAs No.638 to 646 & 632/Del/2022 12 “6.1. The assessee has claimed deduction under chapter VIA amounting to Rs. 72,337/- but the same will not be allowed as assessee has failed to adduce an iota of evidence regarding the claim made.” 9.1 The ld. CIT(A)-31 confirming the addition of Rs.72,337/- held that in Para 12 as follows:- “12. Ground no. 4 is related to the disallowance of deduction of Rs. 72,337/- u/s 800 on account of payment of life insurance premium. It is seen that no evidence of such payment was furnished to the AO as well as in appellate proceedings. Accordingly, the disallowance of Rs. 72,337/- is in order and is hereby upheld. Ground no. 4 is accordingly dismissed” 10. The foremost contention of ld. AR is that this addition is not based upon as any incriminating documents. Ld. AR relied the decision in the case of Pr. Commissioner of Income Tax Central 3 Vs. Abhisar Buildwell P. Ltd. where it was held by the Hon’ble Apex Court that the Assessing Officer was precluded from making any addition to return of income, in absence of incriminating material found as a result of search. 11. On the basis of the admitted facts, there is force in the contention of the ld. AR that additions in these unabated AY, on account of failure to adduce evidence in regard to claim u/s 80C could not have been made, as the same is not based on any incriminating material. Thus, the corresponding grounds in AY 2009-10 and 2010-11 are sustained. 12. Nothing substantial was contended with regard to the penalty orders passed by the ld. AO in original assessment and the ld.CIT(A) on enhancements. On the basis of the aforesaid discussion, as the additions on account of Printed from counselvise.com ITAs No.638 to 646 & 632/Del/2022 13 suppressed loan and interest income are sustained and further addition of unexplained investment of Rs. 75,00,000/ is sustained, the impugned penalty orders on the basis of concealing of these set of incomes require no interference. Ld. CIT(A) has benefitted the assesse in penalty orders passed by the AO, with regard to deletion of additions made on alleged suppressed business profits. Thus the impugned penalty appeal orders of ld. CIT(A) require no interference. 13. Resultantly, the quantum appeals for AY 2009-10 and 2010-11 are partly allowed with regard to deletion of additions made by disallowance of claim u/s 80C of the Act. The remaining appeals, on quantum as well as penalty, are dismissed. Order pronounced in the open court on 13.08.2025. Sd/- Sd/- (SHAMIM YAHYA) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 13th August, 2025. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi Printed from counselvise.com "