SHRI GAJENDER SINGH DRALL,NEW DELHI V. ITO, NEW DELHI

ITA 4877/DEL/2016

AI Insights

The case involves Shri Gajender Singh Drall, who appealed against the order of the Commissioner of Income-tax (Appeals)-15, Delhi, which upheld the addition of Rs.60,13,252 to his income as unexplained cash deposit under section 68 of the Income Tax Act, 1961. The addition was initially made by the Income Tax Officer, Ward 26(3), New Delhi, during the scrutiny assessment of the assessee's bank transactions. The Tribunal examined the evidence presented, including bank statements and confirmations from M/s Optiemus Infracom Ltd., which showed that the transactions were related to land syndication and the funds were re-deposited after the deals did not materialize. The Tribunal concluded that the addition was based on mere speculation and not on concrete evidence, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 776153 (ITAT-DELHI)
• Duration Of Justice: 9 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2025
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 12-09-2016
• Laws Referred To: Income Tax Act, 1961
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: AJAY WADHWA; SHIVAM GARG
• Keywords: Opportunity of being heard; Corroborative evidences; Peak credit; Principle of natural justice
• Section: 143(3); 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: F : NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No.4877/Del/2016 Assessment Year: 2011-12 Shri Gajender Singh Drall, 106, Platinum House, B-Block, Sector-18B, Dwarka, New Delhi – 110 075. PAN: AENPD7088N Vs ITO, Ward 26(3), New Delhi. (Appellant) (Respondent) Assessee by : Shri Ajay Wadhwa, Advocate & Shri Shivam Garg, Advocate Revenue by : Ms Harpreet Kaur Hansra, Sr. DR Date of Hearing : 30.07.2025 Date of Pronouncement : 17.09.2025 ORDER PER ANUBHAV SHARMA, JM: This is an appeal preferred by the assessee against the order dated 14.10.2015 of the Commissioner of Income-tax (Appeals)-15, Delhi (hereinafter referred to as the ld. First Appellate Authority or ‘the Ld. FAA’ for short) in Appeal No.104/14-15(180/14-15) arising out of the appeal before it against the order dated 31.03.2014 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the ITO, Ward 26(3), New Delhi (hereinafter referred to as the Ld. AO). Printed from counselvise.com ITA No.4877/Del/2016 2 2. The case of the assessee was selected for scrutiny under CASS and during the assessment proceedings, the AO examined the cash deposits of the assessee in its savings bank account for which the assessee has stated that the same were out of withdrawals made earlier. The ld. AO was not satisfied and observed that there was withdrawal during the year peak credit of Rs.60,13,252/- and the same was treated as unexplained and addition was made u/s 68 of the Act which have been sustained by the ld.CIT(A) for which the assessee is in appeal raising the following grounds:- “1. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the order of assessment framed u/s 143(3) of the Act by the Income Tax Officer, Ward-26(3), New Delhi at an income of Rs. 62,98,970/- as against returned income of Rs. 2,85,720/-. 2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the order of assessment by failing to appreciate that assessment framed was without jurisdiction as notice issued u/s 143(2) of the Act was beyond the period stipulated under the Act. 3. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the addition of Rs. 60,13,252/- u/s 68 of the Act by failing to appreciate that: 3.1 Sum of Rs. 60,00,000/- was received by assessee from M/s Optiemus Infracom Ltd. through banking channels as advance for syndication of land from various agriculturists. 3.2 During the course of the assessment, appellant has duly furnished complete documentary evidences in form of copy of ITR, computation of income, bank statement, cash flow statements showing withdrawal and deposit in his bank account and also the copy of the ITR, balance sheet and confirmation of the parties from whom it has received the advance. 3.3 The assessee had duly discharged his initial onus and in the absence of any adverse material brought on record in rebuttal, the addition made was untenable and unsustainable in law. Printed from counselvise.com ITA No.4877/Del/2016 3 3.4 Addition made is entirely arbitrary and is based on mere speculation, surmises and conjectures and without there being any adverse material, in rebuttal to the evidence tendered by the assessee, as such, addition made and sustained is per-se legally invalid and is vitiated. 3.5 The deal with the agriculturists could not materialize as such, sum withdrawn from the bank account was deposited in the bank account of the assessee and sum was refunded through banking channels to the persons from whom advance has been received. 4. That no fair, proper and meaningful opportunity of being heard was provided to the appellant as such, addition made and sustained by learned Commissioner of Income Tax (Appeals) in violation of the principles of natural justice is unsustainable in law. The above grounds of appeals are independent of and without prejudice to each other. That the appellant craves leave to add, alter, amend or withdraw all or any grounds herein or add any further grounds as may be considered necessary either before or during the hearing of these grounds” 3. Heard and perused the record. The relevant findings of the ld.CIT(A) bring forth the case of the Revenue as well as of the assessee and the same is reproduced below:- “6. I have considered the facts of the case and gone through the submissions of appellant. As it is clear from the perusal of bank statement that in addition to cash deposits of Rs.3,49,50,000/-, there are several entries of deposits and withdrawals through cheques and RTGS in the appellant's saving bank account. As mentioned by AO in his report, appellant firstly claimed these entries of bank account as loans and advances from different persons but later on changed his stand by claiming these amounts as advances from his clients for syndication of land from various agriculturists. As per appellant, money in the form of advances were given to different persdns but the deals/transactions could not be materialized because the market was badly down due to various reasons, therefore, money was deposited back. As per AO, the appellant failed to submit any evidence/details/copy of agreements or contracts which he would have made with his clients and agriculturists in support of his claim that he was a land syndicator and the deposits in his saving bank account Printed from counselvise.com ITA No.4877/Del/2016 4 were re-deposited by him after withdrawal of the same. On the other hand, appellant has been regularly claiming that he was land syndicator and all transactions of bank account have been made on account of syndication of land from the various agriculturists. However, appellant could not produce any documentary evidence in support of his claim that the transactions were made in connection with land syndication. All through the remand proceedings and appellate proceedings, appellant has failed to adduce a single documentary evidence for any transaction out of several transactions as claimed by him. Some examples can be given in this regard. From the entries of cash deposits and withdrawals in the bank, it can be seen that huge amounts to the extent of Rs.50,00,000/- each (withdrawals on 17.08.2010 and Rs.21,12,2010) and Rs.44,00,000/- (deposit on 13.10.2010) have been transacted for alleged land syndication but no supporting evidence such as copy of agreement, area of land, location of land, rates as decided, name and address of the corresponding party, land documents etc. have been furnished by appellant. Similarly, from the details, it can be seen that from the date of 01.07.2010 to 06.09.2010, total amount of Rs.1,03,50,000/- was withdrawn by appellant but not a single detail, as above, has been furnished by appellant to substantiate that these amounts were given for the purpose of land syndication. Similar is the position in the case of deposits made by appellant in his bank account. However, during the appellate proceedings, appellant has tried to explain the entry of Rs.60,00,000/- claiming it as advance received from M/s Optiemus Infracom Ltd. But except the name of the entity, no other evidence or details have been filed or submitted by appellant. In view of these facts, it is clear that the story made by appellant that he was land syndicator and transactions of bank account are related to this business, cannot be believed being just an afterthought. Therefore, in my opinion, the conclusions drawn by AO are fully justified. The credit entries of the bank account of appellant remain unexplained. Since there are unexplained withdrawals also along with unexplained deposits, the AO has adopted right course of action by taking only the peak balance for making addition. I, therefore, confirm the addition made by AO and dismiss the grounds taken by appellant. 4. As with regard to the addition of Rs. 60.13.252/- being peak credit in the bank account of the Assessee, ld. Counsel has submitted that the AO as well as the CIT(A) erred in making an addition of Rs.60,13,252/- under section 68 of the Act, treating it as peak credit in the assessee’s bank account as it was not part of peak credit because this is a credit through RTGS. In this regard there is Printed from counselvise.com ITA No.4877/Del/2016 5 no dispute to the proposition that only cash entries can be considered while calculating peak credit. In case of the assessee, the peak credit was computed out of cash withdrawals and deposits it was an amount of Rs. 1,21,60,000/- which was treated as explained and no addition was made by Ld. AO in respect of this amount. The credit of Rs.60,13,252/- dated 15.06.2010 arose from an RTGS receipt of Rs.60,00,000/- from M/s Optiemus Infracon Ltd. (P. No. 15 of PBK). Hence, the peak credit of Rs.60,13,252/- determined by the authorities was not on account of any cash deposit. Ld. Counsel has shown that the assessee submitted confirmations, bank statements, and ITRs of all parties, including M/s Optiemus, evidencing withdrawals and re-deposits (P. No. 23-54 of PBK). However, we find the AO ignored these documents in his order dated 31.03.2014, but he acknowledged them in the remand report dated 05.06.2015 (P. No. 63-64 of PBK). It is also not disputed that the AO did not doubt the genuineness, creditworthiness, or identity of the parties who advanced the funds. 5. In regard to the disputed entry of M/s Optiemus, said company advanced Rs.2,03,60,000/- (including Rs.60,00,000/- on 15.06.2010), which was repaid within the same year. All transactions were routed through banking channels, and confirmations were filed before both AO and CIT(A) (P. No. 51 of PBK). The ITR of M/s Optiemus for the year, showing income of Rs.24,92,82,832/-, was also submitted (P. No. 50 of PBK). A specific confirmation for the RTGS receipt of Rs.60,00,000/- was additionally filed before the CIT(A) (P. No. 52 of Printed from counselvise.com ITA No.4877/Del/2016 6 PBK). The balance receipt of Rs. 1,43,60,000/- from M/s. Optiemus was duly accepted as genuine by the same AO. The CIT(A)’s finding that the assessee’s explanation of advances for land syndication was a subsequent improvement is factually incorrect, as the same explanation was placed before the AO vide letter dated 31.03.2014 (P. No. 55 of PBK). 6. Though not discussed in the AO’s order, the remand report itself acknowledges the cash flow statement filed along with the 31.03.2014 reply, proving that the explanation was before him prior to assessment (P. No. 56-60 of PBK). In view of the above facts, the addition of Rs.60,13,252/- as unexplained deposit is unjustified and liable to be deleted in full. 7. Grounds are sustained. The appeal is allowed. Order pronounced in the open court on 17.09.2025. Sd/- Sd/- (AMITABH SHUKLA) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 17th September, 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 "