RAM DARSHAN AGARWAL,BIJNORE V. ITO,WARD-3(3), BIJNORE

ITA 996/DEL/2025

AI Insights

The case involves Ram Darshan Agarwal, the appellant, who contested an addition of Rs. 1,13,81,727 to his income for the Assessment Year 2019-20, which was deemed as unexplained cash credit under section 68 of the Income Tax Act, 1961. The addition was initially confirmed by the Commissioner of Income Tax (Appeals), NFAC, New Delhi. The primary contention was the alleged violation of the principle of natural justice, as the appellant was not confronted with the remand report submitted by the Assessing Officer before the confirmation of the addition. The Tribunal found merit in the appellant's argument and remitted the case back to the CIT(A) for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717204 (ITAT-DELHI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2019-2020
• Appeal Filed On: 21-02-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Assessee Lawyers: ALOK KUMAR GUPTA
• Keywords: Set aside; Opportunity of being heard; Unexplained cash credit; Principle of natural justice
• Section: 54; 54B

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’: NEW DELHI BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No.996/Del/2025, A.Y. 2019-20 Ram Darshan Agarwal, J-3, Geeta Nagari, Bijnore 246701 Uttar Pradesh PAN: AAQPA6807M Vs. Income Tax Officer, Ward 3(3), Income Tax Office, Bijnore, Bijnore (UP) (Appellant) (Respondent) Appellant by Sh. Alok Kumar Gupta, CA Respondent by Sh. Dheeraj Kumar Jain, Sr. DR Date of Hearing 20/08/2025 Date of Pronouncement 22/08/2025 ORDER PER AVDHESH KUMAR MISHRA, AM This appeal for the Assessment Year (‘AY’) 2019-20 filed by the assessee is directed against the order dated 26.12.2024 of the Commissioner of Income Tax (Appeals), NFAC, New Delhi [‘CIT (A)’]. 2. Following grounds are raised in this appeal: - “1. The ld CIT(A) erred in confirming the addition of Rs 11381727 for unexplained cash credit and further erred in not confronting the remand report submitted by the Id Assessing Officer to the appellant before confirming the addition of Rs 1,13,81,727. 2. The appellant craves leave to add, amend, alter, delete and modify any grounds of appeal before/during the hearing of the appeal and all the above grounds are without prejudice to each other.” Printed from counselvise.com ITA No.996/Del/2025 Ram Darshan Agarwal 2 3. The relevant facts giving rise to this appeal are that the appellant assessee filed his Income Tax Return (‘ITR’) on 05.02.2020 declaring income at Rs.11,30,500/-. The case was selected for scrutiny. During the course of assessment proceedings, on verification of the ITR for AY 2018- 19 and 2019-20, the AO noticed that there was substantial increase in the unsecured loan. It was Rs.4,30,99,565/- as per the ITR of AY 2018-19 and Rs.8,05,94,458/- as per the ITR for AY 2019-20. The assessee was required to explain but he did not ensure any compliance. Therefore, the AO taxed the unsecured loan of Rs.3,74,94,893/- (Rs.8,05,94,458/- minus Rs.4,30,99,565/-). Further, the AO disallowed the interest payable on the said unsecured loans. The AO also disallowed the claim of deduction under section 54 and 54B of the Act. The assessment order was passed at income Rs. 5,16,76,870/-. Aggrieved, the assessee filed appeal before the Ld. CIT(A), who partly allowed the appeal. The disputed issue before us is taxability of the unsecured loan of Rs.1,13,81,727/- upheld by the Ld. CIT(A) as under: “7.3 Appellate findings: On perusal of the submission made by the appellant as well as Remand Report furnished by the AO on 13.02.2024, the following findings have been taken as under: (i) In respect of Addition of Rs.3,74,94,893/- u/s 68 of the IT Act, 1961. As the Ld. AO has verified the amount of Rs.6,92,12,731/- out of total unsecured loan amount Rs.8,05,94,458/- in the favour of the appellant, the balance amount of Rs.1,13,81,727/- remains unverified in the hands of the appellant. Hence, the addition of Rs.3,74,94,893/- is hereby reduced to Rs. 1,13,81,727/-. Printed from counselvise.com ITA No.996/Del/2025 Ram Darshan Agarwal 3 (ii) In respect of Addition of Rs.6,96,008/- on account of disallowance of interest paid on unsecured loans- As the Ld. AO has verified the amount of Rs.6,96,008/- which was paid to a party namely M/s Krishna Sugar Factory (PAN-AAHFK4876F), the same is held verified and ruled in favour of appellant. (iii) In respect of Addition of Rs. 3,99,692/- on account of disallowance of housing interest- As the Ld. AO has verified the amount of R 3,99,692/- in the favour of the appellant. The same is held verified and ruled in favour of appellant. (iv) In respect of Addition of Rs.87,31,918/- on account of disallowance of claim of deduction u/s 54 & 54B of the IT Act, 1961- As the Ld. AO has verified the said amount in the favour of the appellant. The same is held verified and ruled in favour of appellant. (v) In respect of Addition of Rs.16,65,839/- on account of Income from Other Sources- As the Ld. AO has verified the said amount in the favour of the appellant. the same is held verified and ruled in favour of appellant. (vi)In respect of Addition of Rs.15,58,020/- on account of disallowance of Interest Paid outside India- On perusal of the Income Tax Return, it has seen that the same has already been shown by the appellant. Further, the Ld. AO has also verified the same. The same is held verified and ruled in favour of appellant.” 4. The Ld. Authorized Representative (‘AR’) submitted that the Ld. CIT(A) erred in confirming the addition of Rs.1,13,81,727/- without confronting the remand report submitted by the Ld. AO to the appellant assessee. Thus, there was violation of the principle of natural justice, contended the Ld. AR. Printed from counselvise.com ITA No.996/Del/2025 Ram Darshan Agarwal 4 5. On the other hand, the Ld. Sr. DR argued the case vehemently and prayed for dismissal of the appeal. 6. In view the above, without offering any comment on merit of the case, we deem it fit to set aside the impugned order and remit the matter back to the file of the Ld. CIT(A) for deciding the issue in dispute after providing the copy of the remand report to the appellant assessee, in accordance with law, after providing adequate opportunity of being heard to the appellant assessee. Ordered accordingly. The appellant assessee, no doubt, shall cooperate in remitted appellate proceedings. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in open Court on 22nd August, 2025 Sd/- Sd/- (YOGESH KUMAR U.S.) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 22/08/2025 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT/CIT 4. CIT(Appeals) 5. Sr. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "