SURESH KUMAR GUPTA,NEW DELHI V. ACIT CENTRAL CIRCLE-20, NEW DELHI

ITA 3301/DEL/2023

AI Insights

The case involves Suresh Kumar Gupta, the appellant, who contested the additions made to his income by the Assessing Officer under section 69A of the Income Tax Act, 1961, due to unexplained money deposits during the demonetization period. The Income Tax Appellate Tribunal examined the appeals against the orders of the Commissioner of Income Tax (Appeals)-27, which had sustained the additions and penalties. The Tribunal found merit in the appellant's arguments regarding the availability of disclosed cash for the deposits and the capitalization of income as per the Interim Board for Settlement's order. Consequently, the Tribunal remanded the matter for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23054 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: NEERAJ JAIN; P.K.MISHRA
• Keywords: Set aside; Opportunity of being heard
• Section: 143(3); 143(1); 69A

Judgement Text

" 1 ITA Nos. 3301 & 3302/Del/2023 Suresh Kumar Gupta Vs. ACIT IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘G’ NEW DELHI BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No. 3301/DEL/2023 (A.Y. 2017-18) ITA No. 3302/DEL/2023 (A.Y. 2017-18) Suresh Kumar Gupta C-64, Hans Apartments, East Arjun Nagar, New Delhi PAN: AGEPG8659D Vs. ACIT Central Circle-20 E-2, ARA Centre, Jhandewalan Extension, New Delhi Appellant Respondent Assessee by Sh. Neeraj Jain, Adv& Sh. P. K. Mishra, Adv Revenue by Sh. Sahil Kumar Bansal, Sr. DR Date of Hearing 10/03/2025 Date of Pronouncement 12/03/2025 ORDER PER YOGESH KUMAR, U.S. JM: Both the captioned appeals are filed by the Assessee against the order of the Commissioner of Income Tax (Appeals)-27, New Delhi [‘Ld. CIT (A)’ for short] dated 29/09/2023 for the Assessment Year 2017-18. ITA No. 3301/DEL/2023 2. The Grounds of Appeal are as under:- “1. That the appellate order passed u/s 250/143(3) of the Act is against the facts of the case, without appreciating the reasonability of deposits in the bank and have been passed 2 ITA Nos. 3301 & 3302/Del/2023 Suresh Kumar Gupta Vs. ACIT without considering the facts and submissions/explanations submitted during the course of the proceedings in correct perspective. 2. That the order passed by the Learned Commissioner of Income Tax (Appeals)-27, New Delhi is perverse in law and facts and has been passed on surmises and conjectures by resorting to rejection of the explanations without any cogent reasoning and by ignoring the documents/facts and explanations on records. 3. That the Learned Commissioner of Income Tax (Appeals)-27, New Delhi has erred in sustaining the income of Rs. 63,17,100/- against the returned income of Rs. 2,97,100/- and there by invoking/sustaining of the provisions of Section 115 BBE of the Act on account of deposits in bank accounts u/s 69A of the Act. 4. That the Learned Commissioner of Income Tax (Appeals)-27, New Delhi has erred in not appreciating the fact that on account of the declarations before Hon'ble Income Tax Settlement Commission (Now Interim Board for Settlement-VII, Chennai), the appellant was in possession of the funds (which were available for capitalization and for use in regular business/deposit) and out of which high denomination notes were deposited in bank accounts on declaration of the demonetization of high denomination notes. 5. That the Learned Commissioner of Income Tax (Appeals)-27, New Delhi is also not justified in sustaining addition of the turnover of the last year to the income of the present year by ignoring the principal of consideration/taxation of the income in the year in which the same was generated. 6. Invoking/sustaining of the provision u/s 115BBE of the Act, in view of the above facts/grounds, is not only unjustified but contrary to the judicial intent/pronouncements. 7. That there was no justification in initiating/imposition of the penalty proceeding u/s 270A/271AAC(1) of the Act. 8. That charging of the interest under the various provisions of the Act was not justified in view of the above grounds. 3 ITA Nos. 3301 & 3302/Del/2023 Suresh Kumar Gupta Vs. ACIT 9. That the demand created, consequent to the assessment/appellate order is highly excessive and unreasonable in view of the facts submitted in the above grounds/statement of facts and deserve to be deleted. 10. That the above grounds of appeal are independent and without prejudice to one and another. 11. That the appellant craves leave to produce additional evidences, if any, by invoking the provisions contained in Rule 46A of the Income Tax Rules.1962 in support of his claims in the course of appellant proceeding. 12. That the appellant craves leave to make further submission, to add or amend the grounds of appeal before the appeal is finally heard or disposed of.” 3. Brief facts of the case are that, the Assessee filed return of income at Rs. 2,97,100/- which was processed u/s 143(1) of the Income Tax Act, 1961 (‘Act’ for short). The case of the Assessee was picked up for ‘complete scrutiny’under CASS system. An assessment order came to be passed u/s 143(3) of the Act by making an addition of Rs. 60,20,000/- u/s 69A of the Act on account of unexplained money deposited during the demonization period. Aggrieved by the assessment order dated 15/11/2019, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 29/09/2023, dismissed the Appeal filed by the Assessee. Aggrieved by the order of the Ld. CIT(A) dated 29/09/2023, the Assessee preferred the present Appeal on the Grounds mentioned above. 4 ITA Nos. 3301 & 3302/Del/2023 Suresh Kumar Gupta Vs. ACIT 4. The Ld. Counsel for the Assessee submitted that the Ld. CIT(A) has committed error in confirming the addition of Rs. 60,20,000/- without any cogent reasoning and on surmises and conjectures, sustained the additions made by the A.O. The Ld. Counsel further produced the order of the Interim Board for Sttelemtnt-7, Chennai dated 11/06/2021 and contended that the Assessee had sufficient cash for depositing during the demonetization period. Further submitted that the Interim Board for settlement allowed the Assessee for capitalization of the income, thus, submitted that the authorities below should have held that the Assessee had sufficient disclosed cash to deposit during the demonization. The Assessee submitted the chart of the utilization of income determined by the commission which reads as under:- 5 ITA Nos. 3301 & 3302/Del/2023 Suresh Kumar Gupta Vs. ACIT 5. The Ld. Assessee's Representativefurther contended that the Assessee had available cash of Rs. 84,38,608/- as on 31/03/2000out of which the Assessee deposited only Rs. 60,20,000/- in his bank account during the demonetization period. The Assessee had no option but to deposit the cash in the bank account otherwise the cash represented by SBNs would have ceased to be a legal tender, thus, sought for allowing the Appeal. 6. Per contra, the Ld. Departmental Representative submitted that the cash found during the seizure and the cash mentioned in the order of the Settlement Commission was only Rs. 21,12,150/-,however, the Assessee deposited Rs. 60,20,000/-, the Assessee has not proved the source of the cash deposits, thus the Ld. CIT(A) rightly dismissed the Appeal of the Assessee, therefore, sought for dismissal of the present Appeal. 7. We have heard both the parties and perused the material available on record. It is the specific case of the Assessee that the Interim Board for settlement vide order dated 11/06/2001, allowed the prayer of the Assessee for capitalization of income disclosed and according, the same has been allowed. As per the Assessee, the Assessee had cash balance available as on 31/03/2000 was Rs. 84,38,608/- as mentioned in the order of the Settlement Interim Board Commission, out of which the 6 ITA Nos. 3301 & 3302/Del/2023 Suresh Kumar Gupta Vs. ACIT Assessee had deposited partial amount of Rs. 60,20,200/-. Therefore, in ourconsidered opinion, in the facts and circumstances of the case, if the issues involved in the present appeal is restored to the file of the A.O. for consideration of the order of the Interim Board for settlement and the claim of the Assessee afresh, substantial justice would be rendered. Accordingly, the issue involved in the present appeal is restored to the file of the A.O. for framing fresh assessment in accordance with law after considering the order of the Interim Board for Settlement and also the contentions of the Assessee. Needless to say, the Assessee shall be provided the opportunity of being heard. 8. In the result, the Appeal of the Assessee in ITA No. 3301/Del/2023 is partly allowed for statistical purpose. ITA No. 3302/Del/2023 9. The Assessee has challenged the order of the Ld. CIT(A) dated 29/09/2023 wherein the Ld. CIT(A) has allowed the order of penalty imposed u/s 271AAC (1) of the Act. Since, we have set aside the order in quantum proceedings and remanded the matter to the file of the A.O. for considering afresh, impugned order of the penalty and the order of the Ld. CIT(A) are hereby set asidewith a liberty to initiate the penalty proceedings after passing fresh assessment order in accordance with law if so required. 7 ITA Nos. 3301 & 3302/Del/2023 Suresh Kumar Gupta Vs. ACIT 10. In the result, the Appeal of the Assessee in ITA No. 3302/Del/2023 is allowed. Order pronounced in the open court on 12th March, 2025 Sd/- Sd/- (BRAJESH KUMAR SINGH) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 12.03.2025 R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "