BALRAJ PAHUJA,MUZAFFARNAGAR vs. ITO WARD 3(1)(2), DELHI

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ITA 3259/DEL/2025Status: DisposedITAT Delhi23 July 2025AY 2017-18Bench: Sh. Satbeer Singh Godara (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that while the assessee's explanation was not fully satisfactory, a complete disallowance was not justified. Therefore, a lump sum addition of Rs. 7,00,000/- was deemed appropriate, providing relief of Rs. 27,29,280/- to the assessee.

What were the facts?

The assessee challenged an order that treated investments in immovable property amounting to Rs. 34,29,280/- as unexplained. The Revenue argued that the assessee could not prove the source of these investments from cash withdrawals, as the cash might have been spent on daily expenses.

What were the issues?

Whether the investments made in immovable property are sufficiently explained by the assessee's cash withdrawals and other sources, and whether Section 115BBE is applicable for the assessment year.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI

Before: Sh. Satbeer Singh Godara

For Appellant: Adv. &
Hearing: 23.07.2025Pronounced: 23.07.2025

Asstt. Year: 2017-18 Sh. Balraj Pahuja, Vs Income Tax Officer, 327, M/s Pahuja & Co., Ganesh Ward-3(1)(2), Puri, Muzaffarnagar-251001 Muzaffarnagar-251201 (APPELLANT) (RESPONDENT) PAN No. AAYPP8817A Assessee by: Sh. Salil Agarwal, Sr. Adv. & Sh. Shailesh Gupta, Adv. Revenue by : Sh. Manoj Kumar, Sr. DR Date of Hearing: 23.07.2025 Date of Pronouncement: 23.07.2025 ORDER This assessee’s appeal for Assessment Year 2017-18 arises against the Addl./JCIT(A)-1, Hyderabad’s DIN & order No.ITBA/APL/S/250/2024-25/1074972466(1) dated 25.03.2025, in proceedings u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short “the Act”).

2.

Heard both the parties at length. Case file perused.

3.

It emerges during the course of hearing that the assessee/appellant is aggrieved against both the learned lower authorities respective findings treating her investments made in purchase of immovable property(ies) to the tune of Rs.34,29,280/-, out of Rs.85,80,100/-, as unexplained, in assessment order dated 26.12.2019 and upheld in the lower appellate discussion.

Balraj Pahuja 4. That being the case, learned counsel invites the tribunal’s attention to the assessee’s cash flow statement supported by her bank account statement indicating her to have withdrawn a total sum of Rs.20,40,000/- in the preceding financial year 2015-16 followed by a sum of Rs.6,00,000/- coming from his wife through banking channel as well as car sale receipts of Rs.6,54,630/-; respectively. The Revenue is fair enough in not rebutting the latter twin entries of gift from wife carrying statutory exemption and car sale amount as above.

5. The question which now remains is only that of the foregoing cash withdrawal entries in the preceding financial year 2015-16. The assessee’s case is that even the fact he had already discharged his onus of proving source of the investments as attributed to cash withdrawals, the impugned addition to this extent is not sustainable. The Revenue on the other hand places strong reliance on the learned lower authorities respective findings that the assessee could not be held to have always carried the said cash withdrawals in hand without spending at least a portion thereof in day to day life expenditure.

5.

Be that as it may, it is deemed appropriate to conclude that neither the assessee deserves full relief as having failed in getting all the relevant facts verified before the lower Balraj Pahuja authorities nor her foregoing explanation could altogether be brushed aside summarily. The tribunal accordingly holds that a lump sum addition of Rs.7,00,000/- only in the instant case would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.27,29,280/- in other words. Necessary computation shall follow as per law.

6.

So far as assessee’s assessment under Section 115BBE is concerned, we quote S.M.I.L.E Microfinance Limited Vs. The ACIT CC-1 in W.P.(MD) No.2078 of 2020 & W.M.P. (MD) No. 1742 of 2020 held that the said provision applied for transactions done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under normal provisions only.

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