PARDEEP KUMAR WALIA,DEHRADUN V. DCIT CENTRAL CIRCLE , DEHRADUN

ITA 168/DDN/2025

AI Insights

The case involves Pradeep Kumar Walia, the appellant, who appealed against the order of the Commissioner of Income Tax (Appeals) -3, Noida, which partly confirmed the addition of INR 10 Lakhs as unexplained money under section 69A and the application of section 115BBE of the Income Tax Act, 1961. The income in question was a cash loan received from Shri Raj Lumba, which the assessee had declared as income in his return. The primary legal contention was whether the income declared from the cash loan should be subjected to the higher tax rate under section 115BBE, despite being declared as business income.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839145 (ITAT-DEHRADUN)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2023-2024
• Appeal Filed On: 03-09-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POONAM SHARMA
• Assessee Lawyers: S. K. MATTA
• Keywords: Business income
• Section: 143(3); 54F

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN “DB” BENCH: DEHRADUN BEFORE SHRI YOGESH KUMAR U.S, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER [THROUGH VIRTUAL MODE] ITA No.168/DDN/2025 [Assessment Year : 2023-24] Pradeep Kumar Walia C/o-Matta Garg & Co. 15, Astley Hall Dehradun, Uttarakhand-248001 PAN-AABPW2423F vs DCIT Central Circle Dehradun Uttarakhand APPELLANT RESPONDENT Assessee by Shri S.K.Matta, CA Revenue by Ms. Poonam Sharma, CIT DR Date of Hearing 10.12.2025 Date of Pronouncement 18.02.2026 ORDER PER MANISH AGARWAL, AM : The present appeal is filed by the assessee against the order dated 31.07.2025 by Ld. Commissioner of Income Tax (A)-3, Noida [“Ld.CIT(A)”] in Appeal No. CIT(Appeals) Noida-3/10009/2022-23 passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dated 07.02.2025 passed u/s 143(3) of the Act pertaining to Assessment Year 2023-24. 2. Brief facts of the case are that the assessee is an individual and filed his return of income u/s 139(4) of the Act on 04.11.2023, declaring total income of INR 86,20,630/-. The case of the assessee Printed from counselvise.com ITA No.168/DDN/2025 Page | 2 was selected for scrutiny under CASS for the reason that the assessee has claimed deduction u/s 54F of the Act and corresponding capital gain was not declared in the return of income filed by the assessee. 3. In the assessment order, AO observed that a search and survey action was carried out at the business premises of M/s. Mehta Brothers & Others Group of cases on 24.11.2022 and the resident of Shri Raj Lumba was also covered. During the course of search, certain WhatsApp chats were found according to which assessee has received cash loan of INR 10 Lakhs from Shri Raj Lumba which was offered as income by the assessee. The AO invoked the provision of section 69A and held that such cash loan as unexplained money and further, made the addition of Rs. 25.00 lacs and invoked the provision of section 115BBE of the Act and applied higher rate of tax on both the income. 4. Against the said order, assessee preferred an appeal before ld. CIT(A) who vide impugned order dated 31.07.2025, partly allowed the appeal of the assessee, where ld. CIT(A) has deleted the addition of INR 25 Lakhs however, confirmed the application of provision of section 115BBE of the Act on the income offered by assessee towards cash loan of INR 10 Lakhs. 5. Aggrieved by the order of the Ld.CIT(A), the assessee has raised following grounds of appeal :- Printed from counselvise.com ITA No.168/DDN/2025 Page | 3 1. “The learned Commissioner of Income Tax(Appeals) as also learned assessing officer have erred in charging tax u/s 115BBE on the income of Rs.10.00 lakhs surrendered by the appellant before learned Assessing Officer. The source of income surrendered was disclosed by the assessee in the surrender statement. 2. The order passed is arbitrary, against the provisions of law and facts of the case. 3. Any other ground arising at the time of or before hearing of appeal.” 6. Considering the arguments of both the parties at length and perusing the material available on record, we find that the claim of the assessee is that additional income is offered as receipts from one Shri Raj Lumba. Since beginning of the proceedings, it was explained by the assessee that said receipts was included as income int eh return of income filed though it was received as “Haath Udhari” i.e. short-term advance and the identity of the lender is not in doubted nor the source in the hands of lender was ever doubted therefore, the provisions of section 69A are not applicable to the said income. The assessee further, claimed that since this income is offered for tax as additional income earned by the assessee therefore, the said amount cannot be added u/s 69A of the Act and provision of section 115BBE of the Act, could not be invoked. 7. On careful consideration of the facts of the case, we find that assessee had admitted the said amount of INR 10 Lakhs received as short-term advance/loan and since the assessee has not been able to substantiate the source and purpose, the same was declared as income. Since it is undisclosed receipts which was not declared by the assessee and if the search was not taken place this amount was Printed from counselvise.com ITA No.168/DDN/2025 Page | 4 never offered for tax. However, once the same is offered for tax as income and therefore the provisions of section u/s 69A of the Act could not be applied. The provisions of section 69A are read as under:- Unexplained money, etc. 69A. “Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.” 8. From the perusal of section 69A, it is evident that this section is applied where the assessee is found to be the owner of any bullion, jewellery or other valuable article which was not recorded in the books of accounts and assessee offers no explanation for the same to the satisfaction of the AO. In the instant case, short term cash loan of INR 10 Lakhs was received by the assessee from Shri Raj Lumba which is an admitted fact thus, the source as well as explanation tendered by the assessee itself is available on the record rather the AO himself alleged that INR 10 Lakhs was received from Shri Raj Lumba. Further assessee has included the same in his income and paid due taxes under normal rate of tax as business income. The provisions of section 69A under given circumstances could not be invoked. Under these circumstances, we are of the view that income offered by the assessee in the return of income filed as business Printed from counselvise.com ITA No.168/DDN/2025 Page | 5 income deserves to be accepted as such and therefore, we hold that provision of section 69A of the Act are not applicable and so as provision of section 115BBE of the Act are not applicable to the facts of the present case. Accordingly, Grounds of appeal raised by the assessee are allowed. 9. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on 18.02.2026. Sd/- Sd/- (YOGESH KUMAR U.S) JUDICIAL MEMBER Date:- 18.02.2026 *Amit Kumar, Sr.P.S* (MANISH AGARWAL) ACCOUNTANT MEMBER Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT 6. Guard File ASSISTANT REGISTRAR ITAT Printed from counselvise.com "