ATAAT RAHAT KHAN,GURGAON vs. DCIT/ACIT-INT-TAX GURGAON, GURGAON

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ITA 1801/DEL/2023Status: DisposedITAT Delhi22 July 2025AY 2017-18Bench: SHRI VIKAS AWASTHY (Judicial Member), SHRI BRAJESH KUMAR SINGH (Accountant Member)18 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that the AO and CIT(A) had wrongly applied Section 69 of the Act. The matter was restored to the Assessing Officer for de novo assessment after considering the assessee's claim regarding DTAA benefits and the factual verification of cheque non-encashment.

What were the facts?

The assessee purchased property for ₹4.70 Crores. The AO accepted ₹3.50 Crores as loan from HSBC Bank but added ₹1.20 Crores as unexplained investment, presuming it was paid in cash. The CIT(A) upheld this addition. The assessee claimed the cheques for the balance amount were not encashed due to the builder's failure to complete fittings and fixtures.

What were the issues?

Whether the addition under Section 69 for unexplained investment is justified, and whether the assessee is eligible for DTAA benefits under the India-Saudi Arabia treaty.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148,Section 151,Section 144B,Section 69,Section 115BBE,Section 234A,Section 234B,Section 270A,Section 271AAC,Section 44AA,Section 132,Section 133A,Section 90(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH, ‘D’: NEW DELHI

Before: SHRI VIKAS AWASTHY & SHRI BRAJESH KUMAR SINGH

For Appellant: Shri Sumit Lalchandani, Adv. &, Shri Abhinav Viz, Adv
For Respondent: Ms. Ambika Aggarwal, Sr. DR, Ms. Harpreet Kaur, Sr. DR
Hearing: 25.04.2025Pronounced: 22.07.2025

order) also admits that until and unless it is proved that the amount of Rs.1,20,00,000/- has some nexus with India or has been earned in India, such amount cannot be taxed in the Appellant's hands in India. Therefore, without going into the merits of his claim, the assessee is at liberty to raise the said claim before the Assessing Officer and Assessing Officer is directed to decide the claim of the assessee as per law.

13.2. Ground No. 7 to 10 of the appeal are allowed for statistical purposes.

14.

Ground no.11 is against the levy of interest u/s 234A and 234B of the Act. The same is consequential in nature and the Assessing Officer will levy interest as per law.

14.1. In the result, ground no.11 is allowed for statistical purpose.

15.

Ground no.12 is against the initiation of penalty proceedings u/s 270A and u/s 271AAC of the Act. This ground of appeal is premature and hence dismissed.

16.

In the result, the appeal of the assessee is partly allowed for statistical purposes.

Order pronounced in the open court on 22nd July, 2025

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