RAJESH BHASKAR,DELHI V. DCIT, CIRCLE-28(1),DELHI, DELHI

ITA 195/DEL/2025

AI Insights

The case involves Shri Rajesh Bhaskar, a pharmaceutical scientist, who appealed against the order of the Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), which sustained the additions made by the AO under section 68 of the Income-tax Act, 1961. The AO had added the amount of Rs.10,46,79,566 as unexplained capital introduced during the year, which the assessee claimed was from previously acquired assets not recorded in the current year's income. The Tribunal found that the assessee had not adequately substantiated the source of the additional capital and directed a re-examination of the evidence provided.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714413 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Opportunity of being heard
• Section: 142(1); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER and SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No.195/DEL/2025 (Assessment Year: 2018-19) Shri Rajesh Bhaskar, vs. DCIT, Circle 28 (1), Pharma R and D Advisor, Delhi. R/o A – 7, National Institute of Immunology, JNU Complex, Aruna Asaf Ali Road, New Delhi – 110 067. (PAN : AAFPB9634C) (APPELLANT) (RESPONDENT) ASSESSEE BY : Dr. Rakesh Gupta, Advocate Shri Somil Agarwal, Advocate Shri Kartik Soni, Advocate REVENUE BY : Shri Rajesh Kumar, CIT DR Date of Hearing : 13.05.2025 Date of Order : 06.08.2025 O R D E R PER S.RIFAUR RAHMAN, ACCOUNTANT MEMBER : 1. This appeal is filed by the assessee against the order of ld. Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT (A)] dated 03.12.2024 for Assessment Year 2018-19. 2. Brief facts of the case are, assessee filed his return of income for the AY 2018-19 on 03.10.2018. The assessee is a pharmaceutical scientist engaged in rendering professional services in research, development and review of medicines. The Printed from counselvise.com 2 ITA No.195/DEL/2025 assessee has declared consultancy income of Rs.86,46,666/- and declared a net profit of Rs.67,22,874/-. The case was selected for limited scrutiny, for the reasons that assessee has introduced capital during the year which is very high as compared to profit declared for tax. Accordingly, notices under section 143(2) and 142(1) of the Income-tax Act, 1961 (for short ‘the Act’) issued and served on the assessee. In response, assessee submitted the relevant information as called for. 3. During the assessment proceedings, AO observed that assessee has introduced fresh capital during the year of Rs.10,46,79,566/-. The assessee was asked to furnish the source of capital along with documentary evidences. In response, assessee submitted that to the extent of Rs.7,87,91,971/- which represented fixed deposits and other immovable and movable assets, it was submitted that assessee’s part time accountant was of the view that since the assessee was making payment towards the above assets from its taxable professional receipts, the same should be brought to the books, accordingly, he has brought to books the aforesaid assets. It was submitted that all these assets are shown in the balance sheet by crediting the capital account and debiting the respective assets in the Balance Sheet and it was submitted that these assets were not purchased or acquired during the current assessment year rather it was acquired in the earlier assessment years. After considering the submissions of the assessee, the AO rejected the same and observed that there are discrepancies in declaration of the opening and closing balance of the capital account and as per the claim of the assessee, assessee has acquired these assets in earlier assessment years, however no submissions were submitted with supporting documents. He observed that there is discrepancy in the explanation Printed from counselvise.com 3 ITA No.195/DEL/2025 given for the capital introduced during the year. Accordingly, by relying on various decisions and also relying on the return of income filed for previous assessment year, he rejected the same and proceeded to make the addition on account of the abovesaid introduction of capital during the year u/s 68 of the Act. 4. Aggrieved with the above order, assessee preferred an appeal before the ld. CIT (A) and filed detailed submissions. After considering the above, ld. CIT (A) sustained the additions made by the AO with the observation that assessee has introduced capital during the year, however not substantiated and explained the introduction of capital satisfactorily to the AO and he justified the additions made by the AO as per section 68 of the Act. 5. Aggrieved, assessee is in appeal before us raising ground of appeal which are argumentative in nature, however we observe that the plea of the assessee is that introduction of additional capital itself to bringing on record various assets which are not properly accounted by him during the previous assessment years as he was accounted only to the extent of income declared by him and not brought on record other movable and immovable assets in the Balance Sheet which were declared in his return of income. All these assets were acquired by him in the previous assessment years. However, lower authorities have rejected the contentions of the assessee by observing that assessee has not brought on record any material to explain the source of such additional capital introduced in his Capital Account. 6. After considering the submissions of both the counsels,, we are of the view that assessee may be given one more opportunity of being heard to explain the additional assets recorded in his Balance Sheet and credited the same in his capital Printed from counselvise.com 4 ITA No.195/DEL/2025 account with evidences of introduction of capital in the previous assessment years. We direct the AO to consider various details which assessee may submit relating to introduction of capital in this year which has no relevance in the income earned by the assessee during the year, after giving proper opportunity of being heard. The assessee is also directed to submit the relevant evidence and documents before the authorities below. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on this 6th day of August, 2025. Sd/- sd/- (SATBEER SINGH GODARA) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 06.08.2025 TS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "