SUNIL KUMAR CHAUDHARY,DELHI V. ITO WARD-29(1), DELHI

ITA 1186/DEL/2025

AI Insights

The case involves Sunil Kumar Chaudhary, a retired Merchant Navy officer, who appealed against the order of the CIT(A) confirming additions made by the Assessing Officer under Sections 69B and 69A of the Income-tax Act, 1961. The additions pertained to unexplained investments and rental income from properties in Dubai, which the assessee argued were from past earnings and not taxable in India until his return in 2016. The Tribunal found that the CIT(A) did not adequately consider the assessee's explanations and the documentary evidence provided, leading to a decision to remand the case back to the CIT(A) for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791161 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2018-2019
• Appeal Filed On: 27-02-2025
• Other Referred Cases: Dhakeswari Cotton Mills Ltd. vs. CIT (1954) 26 ITR 775 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUSH KALRA
• Assessee Lawyers: TANYA SHURTI
• Keywords: Opportunity of being heard; Additional evidence; Peak credit; Residential status
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘E’ BENCH, NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 1186/DEL/2025 [A.Y. 2018-19] Sunil Kumar Chaudhary Vs. The I.T.O 161, CWestern Avenue Ward -29(1) W 3 Lane, Sainik Farms New Delhi New Delhi PAN – AHOPC 0676 R (Applicant) (Respondent) Assessee By : Ms. Tanya Shurti, Adv Department By : Ms. Ankush Kalra, Sr. DR Date of Hearing : 18.11.2025 Date of Pronouncement : 18.11.2025 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order of the ld. CIT(A)/NFAC, Delhi dated 3.01.2025 pertaining to A.Y. 2018-19. 2. The assessee has raised the following grounds of appeal: Printed from counselvise.com ITA No. 1186/DEL/2025 [A.Y. 2018-19] Sunil Kumar Chaudhary Vs. ITO Page 2 of 7 “1. That the assessment order passed under Section 143(3) r.w.s. 143(3A) & 143(3B) is bad in law and void-ab-initio as it was completed without proper opportunity being given to the appellant to furnish necessary explanations and documents. 2. On the facts and in the circumstances of the case and in law, That the CIT(A) erred in confirming the addition of ₹2,58,62,809 under Section 69B without properly considering the facts and evidence submitted during the appellate proceedings. 2.1 That the CIT(A) erred in confirming the addition of ₹2,58,62,809 under Section 69B, even though the appellant provided evidence that these balances represent past earnings accumulated in foreign bank accounts before he became a resident of India. 2.2 That the CIT(A) failed to appreciate that the appellant was an NRI until FY 2016-17 and that the foreign bank balances pertained to earnings outside India, which were neither taxable nor required to be disclosed in India prior to his residential status change. 2.3 That the CIT(A) failed to consider the explanation that no fresh investment was made during the assessment year and that no books of accounts were required to be maintained by the appellant as an individual. 3. That the CIT(A) erred in rejecting additional evidence under Rule 46A, despite the fact that the appellant was prevented by sufficient cause (COVID-19 pandemic) from furnishing the evidence before the AO during assessment proceedings. Printed from counselvise.com ITA No. 1186/DEL/2025 [A.Y. 2018-19] Sunil Kumar Chaudhary Vs. ITO Page 3 of 7 4. That the CIT(A) erred in not outrightly deleting the addition of 26,15,521 under Section 69A, despite acknowledging that this amount was already disclosed as rental income in the ITR.” 3. Brief facts of the case are that the assessee an individual of 73 years of age. The assessee has been the Merchant Navy Officer since 1974 with Major foreign shipping Companies like P & O and United Arab Shipping Company (U.A.S.C). The assessee retired in 2006 and came back to India. In 2008 the assessee was advisor representative in Bombay for Contlines Belgium and in March, 2011, the appellant was invited to break bulk shipping conference in Antwerp, Belgium to deliver a lecture on the problem of piracy. The assessee opened an office in Dubai in September 2013 to work with 'Ambrey risk U.K' to combat the problem with piracy from Somali pirates and started a Company with the name of 'SKC Shipmanagement and Operations L.L.C' later name was changed to 'SKC Shipmanagement DMCC\", 4. The assessee returned back to India in 2016 and prior to that in September, 2013 - November 2016, invested the earning in Dubai in three properties from where the assessee received the rental income. The Assessing Officer added the peak credits of Rs. 2,58,62,809/- in bank Printed from counselvise.com ITA No. 1186/DEL/2025 [A.Y. 2018-19] Sunil Kumar Chaudhary Vs. ITO Page 4 of 7 accounts u/s 69B of the Income-tax Act, 1961 [the Act, for short] on account of alleged investments not disclosed in the books of accounts. 5. Aggrieved, the assessee went in appeal before the ld. CIT(A). 6. The ld. CIT(A) confirmed the additions made by the Assessing Officer. 7. Now the further aggrieved assessee is in appeal before us. 8. Before us, the ld. counsel for the assessee vehemently stated that the amount deposited in the bank accounts in Dubai are fully supported by the documentary evidences and are explainable and thus the sources of investments in the properties are fully explainable. The Assessing Officer has further added a sum of Rs. 26,15,521 u/s 69A of the Act on account of the rental income earned from three properties in Dubai. The said income has been added twice which has already been disclosed in the income as per ITR filed. The ld. counsel for the assessee further submitted that no fresh investment has been made during the year and the impugned order dated 13.11.2020, 21.12.2020 is bad-in-law and wrong, incorrect and illegal on facts and in the circumstances of the case and legal position. 9. The ld. counsel for the assessee continued by saying that the additions made are based on no material/evidence and/or by ignoring relevant material/evidence and are based on mere surmises, conjectures and imagination and perverse and bad in law. The Assessing Officer was Printed from counselvise.com ITA No. 1186/DEL/2025 [A.Y. 2018-19] Sunil Kumar Chaudhary Vs. ITO Page 5 of 7 not justified in drawing adverse inference at the back of the assessee and no suitable opportunity has been given to the assessee to present its case and to submit the necessary details. The ld. counsel for the assessee relied on the judgment of the Hon'ble Supreme Court in case of Dhakeswari Cotton Mills Ltd. vs. CIT reported in (1954) 26 ITR 775 (SC) where it was held that there must be something more than bare suspicion to support regular assessment. 10. Per contra, the ld. DR submitted that the ld. CIT(A) was right in deciding the appeal against the assessee. 11. We have heard the rival submissions and have perused the relevant material on record. We find that the additional evidences have been rejected by the CIT(A) on technical ground which does not serve the principle of substantive justice. Considering the background of the assessee, we are of the view that the ld. CIT(A) should have considered the additional evidences as we get a sense that he obliquely accepts the contention of the assessee that the investments are supported by the documents. 12. In view of the above, we are of the considered opinion that the assessee ought to have been given reasonable and sufficient opportunity of being heard. Therefore, in the interest of justice and fair play, we deem Printed from counselvise.com ITA No. 1186/DEL/2025 [A.Y. 2018-19] Sunil Kumar Chaudhary Vs. ITO Page 6 of 7 it fit to restore the issue of investment and rental income to the file of the ld. CIT(A). The ld. CIT(A) is directed to decide the issues afresh after considering the documentary evidences regarding investment made in Dubai and rental income accrued thereon to the assessee from the properties in Dubai. The assessee is also directed to provide necessary information/ documents as required by the ld. CIT(A). 13. In the result, appeal of the assessee in ITA No. 1186/DEL/2025 is allowed for statistical purposes. The order is pronounced in the open court on 18.11.2025. Sd/- Sd/- [CHALLA NAGENDRA PRASAD] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 08th DECEMBER, 2025. VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Printed from counselvise.com ITA No. 1186/DEL/2025 [A.Y. 2018-19] Sunil Kumar Chaudhary Vs. ITO Page 7 of 7 Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order 2. Date on which the typed draft order is placed before the Dictating Member 3. Date on which the typed draft order is placed before the other Member [in case of DB] 4. Date on which the approved draft order comes to the Sr. P.S./P.S. 5. Date on which the fair Order is placed before the Dictating Member for sign 6. Date on which the fair order is placed before the other Member for sign [in case of DB] 7. Date on which the Order comes back to the Sr. P.S./P.S for uploading on ITAT website 8. Date of uploading, inf not, reason for not uploading 9. Date on which the file goes to the Bench Clerk 10. Date on which the file goes for Xerox 11. Date on which the file goes for endorsement 12. The date on which the file goes to the Superintendent for checking 13. Date on which the file goes to the Assistant Registrar for signature on the order 14. Date on which the file goes to the dispatch section for dispatch the Tribunal order 15. Date of Dispatch of the Order 16. Date on which the file goes to the Record Room after dispatch the order Printed from counselvise.com "