YOGENDRAKUMAR KISHONGOPAL RAJPURIA,MUMBAI vs. INCOME TAX OFFICER, MUMBAI

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ITA 4681/MUM/2025Status: DisposedITAT Mumbai17 December 2025AY 2012-13Bench: SHRI SAKTIJIT DEY (Vice President), SHRI JAGADISH (Accountant Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal, finding sufficient cause. It held that additions based on incomplete diary entries from a third party are unsustainable when the assessee has provided clear explanations and supporting evidence.

What were the facts?

The assessee's appeal was dismissed ex-parte by the CIT(A) due to a delay. The AO had reopened the assessment based on a diary entry from a third party, alleging unexplained loans given by the assessee. The assessee claimed to have settled the dispute under a voluntary scheme but failed to follow up on the appeal.

What were the issues?

Whether additions made solely on the basis of an unverified third-party diary entry are sustainable, and if the assessee's explanation for loan transactions is sufficient.

Which sections of the Income-tax Act were involved?

Section 144,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘G’ BENCH: MUMBAI

Before: SHRI SAKTIJIT DEY & SHRI JAGADISH

For Appellant: Shri Subhash Kedia
For Respondent: Shri Arun Kanti Datta, CIT DR
Hearing: 10.12.2025Pronounced: 17.12.2025

PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2012-13 arises out of the order of Learned Commissioner of Income Tax (Appeal), Addl/JCIT (A)-2 Lucknow [hereinafter “Addl/CIT(A)”] dated 25.06.2024 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 144 r.w.s 147 of the Income-tax Act, 1961 (hereinafter “the Act”) dated 31.12.2019.

2.

The appeal has been filed with a delay of 332 days. The assessee has filled affidavit stating the reason as, he had opted for VSVS- 2020 by filling form 1 and the PCIT had also issued Form 3 requiring to make the full and final payment of Rs.3,28,732/-. The assessee has already made full payment under the VSVS Scheme and was under impression that the case has been settled. However, only why the penalty was levied and SMS was received assessee came to know that despite payment of tax under VSVS, the Form 5 has not been issued and therefore the appeal has not been settled and the Addl/CIT(A) has dismissed the appeal ex-parte. We have given full consideration of the submission of assessee and are of opinion that there was sufficient cause in delay in filing appeal within the due date, therefore the delay in filing the appeal is being condoned.

3.

The assessee has filed return of income showing total income of Rs. 13,77,370/-. The A.O has reopened the assessment on the basis of survey conducted in the case of M/s. Dayal Tours and Travels(I)

1.

1. Pvt. Ltd. in which a diary was impounded which contained details of cash/cheque loan arranged by Shri Gauri Shankar Choudhary from various lenders to various borrowers. The information in the diary contained two entries relating to assessee of loan given to Rajkumar Dalmia proprietor of M/s. S. S. Traders by cheque of Rs. 5,00,000/- each on 09.02.2012 and one entry of cash loan to Balmohan Agarwal Prop M/s Samarth Construction, of Rs. 5,00,000/- on 10.03.2012.

1. The assessee before the A.O submitted that he has only given one cheque loan of Rs. 5,00,000/- on 09.02.2012 to Mr. Rajkumar Dalmia and the interest has already accounted for in the Income Tax return.

1.

The assessee further submitted that he has given another cheque loan of Rs. 5,00,000/- on 10.03.2012 to M/s Samantha Construction which has been accounted and there is no cash loan as alleged. However, the A.O made the addition of cheque loan of Rs 5,00,000/- to Raj Kumar Dalmia and cash loan of Rs 5,00,000/- to Balmohan Agrawal as unexplained investment under the head income from other sources.

On appeal the Ld. Addl/CIT(A) issued various notices and finally dismissed the appeal stating that the assessee has not made any submission despite many opportunities given.

4.

At the outset, the Ld. Authorized Representative (A.R.) of the assessee submitted that the assessee had opted VSVS 2020 to settle the dispute to buy the peace by submitting the Form 1 and had also paid tax due as per Form 3 issued by the PCIT, but only because Form 4, withdrawing the appeal has not been filled, the PCIT has not issued Form 5 settling the dispute. As assessee was of the impression that the dispute has been settled, he could not follow up appeal before Ld. addl/CIT(A). The Ld.AR on merit has submitted that the A.O has made addition only on the basis of diary entry in which two loan entries of Rs.5,00,000/- on 09.02.2012 by cheque has been shown. The assessee has clarified that there is only one loan given by cheque on 09.12.2012 and interest of which has been included in the return of income and there is no other cheque loan of Rs. 5,00,000/-. The Ld.AR submitted that there are no details of cheque in the alleged diary and only Rs. 5,00,000/- has been debited from assessee’s bank account on 9.12.2012. The Ld.AR has also submitted that there is no cash loan of Rs. 5,00,000/- advanced to Mr. Balmohan Agarwal, but a cheque loan of Rs. 5,00,000/- has been given to his proprietary concern M/s Samanta construction, which is duly accounted. The Ld. AR therefore prayed that addition may be deleted.

5.

The Learned Departmental Representative (Ld. D.R) relied on the orders of the lower authorities and requested that the appeal be dismissed.

6.

We have considered rival submissions and perused the materials available on record. The A.O has made the addition on the basis of diary impounded at the premises of a third person, which does not contain the cheque number in respect of two entries dated 09.12.2012 . As regard to cash loan, the assessee has already shown a cheque of Rs. 5,00,000/- on the same date accounted in its bank statement. The A.O has made the addition without making any inquiry on its own or verifying further facts as brought out by the assessee.

The Ld. Add/CIT(A) has confirmed the addition in ex-parte order as the assessee has not made any submission. In our considered opinion, the addition made on the basis of incomplete diary entry found during survey is not sustainable when the assessee has clearly explained the entries. We accordingly, direct A.O to delete the addition.

7.

In the result, the appeal filed by the assessee is allowed. Order pronounced on 17th day of December, 2025 at Mumbai.

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