ADITYA KUMAR JHA,MUKHARJEE NAGAR vs. DEPUTY COMMISSIONER OF INCOME TAX, NEW DELHI

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A: NEW DELHI BEFORE MS MADHUMITA ROY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER

ITA No. 6531/Del/2025 (A.Y 2020-21) ITA No. 6532/Del/2025 (A.Y 2021-22) ITA No. 6533/Del/2025 (A.Y 2022-23) Aditya Kumar Jha, Vs. Deputy Commissioner 2nd Floor, Plot No. 759, of Income Tax, Room Mukharjee Nagar, New No. 323, ARA Centre, Delhi Jhandewalan, New Delhi (Appellant) (Respondent) PAN: AGDPJ1144P

ITA No. 7055/Del/2025 (A.Y 2020-21) ITA No. 7056/Del/2025 (A.Y 2021-22) ITA No. 7057/Del/2025 (A.Y 2022-23) Deputy Commissioner of Vs. Aditya Kumar Jha, Income Tax, Room No. 323, 2nd Floor, Plot No. 759, ARA Centre, Jhandewalan, Mukharjee Nagar, New New Delhi Delhi

(Appellant) (Respondent) PAN: AGDPJ1144P

Assessee by : Sh. Gaurav Jain, Adv & Sh. Tarun Chanana, Adv Revenue by: None

Date of Hearing 23/06/2026 Date of pronouncement 18/09/2026 O R D E R PER BENCH: This group of cross appeals filed by the assessee and revenue

are directed against the common orders dated 11.07.2025 passed by

the Ld. Commissioner of Income-tax (Appeals), Delhi-29 under

Section 250 of the Income Tax Act, 1961 (hereinafter referred to as

‘the Act’) arising out of the Assessment Order dated

2 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

31.03.2024under Section 148, dated 10.02.2023 under Section 144

and dated 31.03.2024 under Section 143(3) of the Act passed by the

Assessment Unit, Income-tax Department for Assessment Years

2020-21 to 2022-23 respectively.

appeals by assessee before the ITAT. The assessee has filed

condonation application, considering the averments made in the

condonation applications for the delay in filing the appeals before

the ITAT, the delay is condoned and the appeals are taken up for

hearing.

time of call neither any adjournment has been sought for. Thus,

upon hearing the Ld. Counsel appearing for the assessee and upon

perusal of the entire set of documents placed before us particularly

which were duly placed before the authorities below and further

perusal of the order passed by the authorities below, we have

decided the appeal as follows:

ITA No. 6531/Del/2025 (Assessee’s Appeal) and ITA No. 7055/Del/2025 (Revenue’s Appeal) for Assessment Year 2020-21

seizure action was carried out on 10.10.2021,in the group of Sh.

3 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

Rupesh Kumar Batra, Aditya Kumar Jha and others including

assessee/appellant before us. During the course of search,

statement of assessee/appellant was recorded u/s 132(4) of the Act.

From the aforesaid statement, Ld. AO observed that the assessee

was involved in the activities of outward foreign remittance. Assessee

also states that the domestic entities like M/s SMKJ Tour and

Travels, which was used to maintain by the assessee, M/s

Streemgold International (OPC) Pvt. Ltd., though incorporated by Sh.

Rakesh Kumar Jha, wherein assessee tried for importing electronics

items, used for entry business, under the control of the assessee,

though he has no control over any foreign entity. Assessee further

confirms that the hawala operators like Sh. Sunny Khurna used to

contact the assessee with their requirement of funds transfer to

foreign entities and then assessee did the paper work for sending

remittances to foreign entities from domestic entities under the

control of the assessee. Thus, the Ld. AO observed that the assessee

has admitted the fact of sending the foreign remittance entities

based on the direction of Manoj Gupta and Sunny Khurana.

Further during post search investigation, statement of assessee was

recorded u/s 131(1A) of the Act, on analysis of the data available in

the mobile phone of the assessee, an excel sheet was found, wherein

cash entries were recorded with different names and in this context

4 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

assessee in his statement states that he wanted to enter into the

business, therefore, in order to make relations with various

businessmen provided RTGS entry in lieu of cash.

furnished his Return of Income on 12.03.2021, declaring income of

Rs. 4,99,380/-. As the search and seizure action was carried out on

10.10.2021i.e. on or after 01.4.2021, case of the assessee was

reopened vide notice dated 31.08.2022 u/s148 of the Act after

obtaining approval of Ld. Pr. CIT(Central)-03, Delhi.

5.1 Ld. AO issues show cause notice dated 15.01.2024to assessee,

wherein it has been stated that, it is seen from 15CA/CB/CC report

that, assessee have remitted outward foreign remittance to the

extent of Rs. 50,92,16,078/- and charged commission thereon, and

therefore, as to why addition of Rs. 1,12,53,675/- @ Rs. 2.21%

commission on account of foreign remittance to the extent of Rs.

50,92,16,078/- may not be made u/s 69A of the Act.

5.2 Further during post search investigation, statement of assessee

was recorded u/s 131(1A) of the Act. On analysis of the data

available in the mobile phone of the assessee, an excel sheet was

found, wherein cash entries were recorded with different names and Page | 4

5 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

in this context assessee in his statement stated that he wanted to

enter into the business and in order to make relations with various

businessmen he provided RTGS entry in lieu of cash. Ld. AO

directed the assessee to provide the details of parties, including PAN

and address to whomassessee had provided RTGS. Ld. AO also

issued show cause that if assessee fails to furnish the details of the

parties from whom he has received cash and issued RTGS in lieu

thereof, why addition of Rs. 7,50,37,000/- shall not be made u/s

69A of the Act.

5.3 The assessee in his reply submitted that the he was only

focused on the execution of paperwork or documentation necessary

for carrying out foreign remittances and even these activities were

carried out under the direction of other persons. However, Ld. AO

has not accepted the aforesaid contention of the assessee and was of

the opinion that the assessee was actively engaged in illegal activities

such as Hawala transaction, money laundering and for that Ld. AO

referred to Question No. 12 of statement of the assessee u/s 132(4)

of the Act. In answer to the question No. 12, the assessee replied

that in respect of one of the entities namely M/s Aditya Bhoomi

Ventures (P) Ltd. is being controlled by him and Sh. Manoj Jain and

also explained the modus operandi of the group. Likewise in

6 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

Question No. 13, the assessee further affirms that he had control

over the few domestic entities like M/s SMKJ Tours and Travels (P)

Ltd., M/s Streemgold International OPC (P) Ltd. etc. Relevant

statements are reproduced as follows:

“9.5. Reference is invited to the statement of the Assessee recorded during the time of search operation. Relevant Q No. 12 of his statement is deiced below:

7 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

it may be seen that assessee has explicitly mentioned that Aditya Bhoomi Ventures Pvt. Ltd. is being controlled by him and Sh. Manoj Jain. Not only this the assessee has explained the modus opernadi of the group. He has stated that M/s Aditya Bhoomi Ventures Pvt. Ltd is used to transfer the remittence to these companies of Sh. Manoj jain. The bank account of Aditya Bhoomi Ventures Pvt. Ltd is used for receiving RTGS in India and then sending money abroad. How can the assessee say that he was only confined to execution of paper work of the company.

8 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

9.6 Reference is invited to the statement of the assessee recorded during the time of search operation. Relevant Q.No. 13 of his statement is depicted below:

It may be seen from the reply of the Q.No.13 the assessee has stated that Hawala Operators like Sh. Sunny Khurana used to contact him with their requirements of funds transfer to foreign entities as remittance. The foreign entities details provided to him by Sh. Sunny Khurana and Sh. Manoj Gupta.”

5.4 Assessee u/s 132(4) of the Act, in order of assessment, as reproduced hereunder:

“Further, reference is invited to Q No. 41,45,52,55,59 and 60 of the statement of the Assessee recorded, the same is questions and answer of the Assessee are reproduced as under:

9 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

10 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

11 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

5.5 On the basis of aforesaid the Ld. AO has reached to the

conclusion that the assessee is actively engaged in the foreign

remittance and hawala operation and his engagement is not

confined to paper works, but has actively engaged in wrong doing of

these companies. Ld. AO finally concluded as under:

“9.9 From the above statement, it can easily be seen that the assessee is are actively involved in the foreign remittance and hawala operation activity and also associated with the hawala operator. It is an established fact that assessee work was not to confine paper work but he was actively involved in wrongdoings of these companies. Apart from the involvement of the above activity, it is also established that he is also in the business providing entry in lieu of cash.

12 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

entities were used for sending outward foreign remittance only.

10.1 Accordingly, financial year wise total foreign remittance of the companies which was used by the assessee for foreign remittances as per available 15CA/15CB/15CC for FY 2019- 20 relevant to AY 2020-21 is as under:

Name of the PAN Form No. entity Foreign Remittances Borneo AAICB7637F 15CB 50,92,16,078/- LogisticsPv t. Ltd.

10.2. During the year under consideration, it may be seen that the assessee has made foreign remittance of Rs. 50,92,16,078/- as per highest value among 15CA/CB/15CC data of the company used by the assessee. During the course recording of statement u/s 132(4) of the Income-tax Act, 1961, the assessee has submitted that he was earning commission of Rs.0.10/- paisa per USD. However, thesame was found very less as compared to the prevailing market rate of 2.00/- to 2.5% paisa per USD. Further, on perusal of one of the Excel Sheets found in his mobile phone, it was noted that an additional amount has been written with + sign with the rate of USD. On perusal of the data in column "D" there is exchange rate and there is also an amount with +sign. The same is resulted into that the assessee was charging the + amount as his commission per USD for sending outward foreign remittance. The facts of the case has already been discussed in above therefore, there is no need to discuss again. Further, on calculation of the + amount with per USD, the assessee was earning commission @ 2.50%.

10.3 However, the assessee has applied the commission rate at a very lower side instead of actual commission rate prevalent in the said business. The assessee has not furnished any details on which basis he has applied the commission rate Rs.0.10/- paisa per USD on the foreign remittance made by him. It can be seen that the assessee has applied meager rate of commission which is not the correct rate of commission earned by the assessee sending foreign remittance. Further, the assessee has not made any plausible explanation on this aspect. In a lot of cases commission income on hawala transaction is taxed at the rate of exceeding Page | 12

13 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

2.50%. The assessee is involved in sending foreign remittances. In the absence of any logical/genuine rate of commission prevalent in the market, it is concluded that the assessee has earned commission income @ 2.50% of the foreign remittance which comes to Rs. 1,27,30,402/-(being 2.50% of 50,92,16,078/-/-). Therefore, addition of Rs. 1,27,30,402/- u/s 69A of IT Act, 1961 is made to the total income of assessee and tax is charged u/s 115BBE of IT Act, 1961.

(Addition of Rs. 1,27,30,402/-) The penalty u/s 271AAC of the I.T.Act, 1961 is initiated.

assessee, wherein cash entries were recorded with different names,

details of the parties from whom he has received cash and issued

RTGS in lieu thereof, was asked by Ld. AO vide show cause notice

dated 15.01.2024 stating that in absence thereof addition of Rs.

7,50,37,000/- should be made u/s 69A of the Act. Same details was

again requested vide show cause notice dated 20.03.2024. However,

having regard to fact that the assessee has not furnished the

required details, the Ld. AO, was of the opinion that the case of the

assessee is covered under the provisions of Section 69A of the Act

and sum of Rs. 7,50,37,000/- remains unexplained in the hands of

the assessee against which he has accepted cash in lieu of RTGS

and thus, made addition of Rs. 7,50,37,000/- under Section 69A of

the Act by concluding as under:

14 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

“11. During the course of post search investigation, the assessee's statement was recorded on oath u/s 131(1A) of the Income-tax Act, 1961. On analyzing of the data available in the mobile you phone Iphone X, an excel sheet was found wherein the following cash entries were recorded with different names. The same is produced below:

11.1. The said excel sheet as Exhibit -V was confronted to the assessee and was asked to explain the contents about it. In response to the same, the assessee has stated that he wanted

15 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

to enter into the business therefore in order to make relations with various businessmen he provided RTGS entry in lieu of cash. The assessee was requested to vide notice dated 15.01.2024 and show cause notice dated 20.03.2024 the assessee was requested to provide the details of the parties to whom cash was received and RTGS was made but no details of the parties and PAN no. have been provided by the assessee therefore the case of the assessee is covered under the provision of section 69A of the Income Tax Act, 1961. The section 69A is reproduced as under:

69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and thevalue of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.

11.2 Having regard to the provision of section 69A of the Income Tax Act, 1961 the amount of Rs.7,50,37,000/- remains unexplained in the hands of the assessee against which he has accepted cash in lieu of RTGS. Accordingly, addition of Rs.7,50,37,000/- is made u/s 69A of the Income-tax Act, 1961.

(Addition of Rs.7,50,37,000/-)

The penalty u/s 271AAC of the I.T.Act, 1961 is initiated.”

31.03.2024 for assessment year 2020-21, wherein Ld. AO has made

two additions, assessee filed appeal the before the First Appellate

Authority. Ld. CIT(A) has partly allowed the appeal of the assessee.

Ld. CIT(A) for both the additions, has essentially restricts the

addition to the 0.25% of amount of remittances by relying upon

16 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

judgment of Hon’ble Jurisdictional High Court of Delhi in case of

PCIT vs. Third Generation Traders (P) Ltd. in ITA No. 137/2025.

Finding of the Ld. CIT(A) as far as first addition of Rs. 1,27,30,402/-

being commission estimated at 2.50% of foreign remittances

aggregating to Rs. 50,92,16,078/-, which has been restricted to

commission at the rate of 0.25% is reproduced hereunder:

“6. Ground No. 5: pertain to the addition of Rs. 1,27,30,402/-on account of commission income under section 69A of the Act.

6.1 I have considered the facts and circumstances of the case. The aforesaid addition of Rs. 1,27,30,402/-on account of undisclosed commission income has been made on the ground that the appellant was facilitating certain accommodation entries outside India, on the basis of certain incriminating documents and digital data found in the course of search conducted upon the appellant u/s 132 of the Act, and admission made by him with respect to his involvement al the time of recording statement u/s 132(4) of the Act.

6.2 In the course of search, certain excel sheets containing name of certain companies in whose accounts certain amounts were deposited and foreign remittances were made along with the dollar conversion rate with certain markup amount was mentioned. The aforesaid seized data has already been reproduced as part of body of the assessment order supra. While the appellant in the course of statement recorded u/s 132(4) admitted that the aforesaid companies were engaged in providing accommodation entries outside India, however, the appellant was not owner or operator of these companies but was only having the limited role of preparing documentation at the behest of other persons i.e. Mr. S. Khurana and Mr. Manoj Garg etc. who were real operators of these companies.

6.3 In the said statement, the appellant admitted that his commission income from the aforesaid activity was only to the tunc of 10 paise per dollar of remittance made. The relevant portion of the aforesaid statement, more particularly reply to query no.5 of the statement recorded on 10.10.2021 is reproduced in the body of the assessment order reproduced above.

17 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

6.4 In the assessment proceedings, the AO Look cognizance of both the seized material and the admissions made by the appellant in the statements recorded u/s 132(4) and came to the conclusion, by partly admitting thestatement, that the appellant was engaged in accommodation entry vis-a-viz the companies mentioned in the seized papers, but ignored/rejected the other part of the statement with respect to his limited role and involvement in only facilitating documentation work with respect to such foreign remittances as also the amount of commission earned by him 10 paise per dollar of the remittance.

6.5 The AO worked out the rate of commission @2.5% of the amount of remittance on the basis of certain working in the loose sheets in the form of digital excel sheet found in the course of search.

6.6 Further, with regard to the amount of remittances made by each company, the AO picked up the amount of remittances as per Form-15CA issued by CA and uploaded on the portal while making such foreign remittances by the company involved, in A.Y. 2020-21 and 2021-22, whereas in A.Y. 2022-23, the AO adopted the amount as per the remittances found Irum the bank statement.

6.7 The appellant strongly disputed the aforesaid contradictory approach adopted by the AO in relying upon the statement on piecemeal basis, i.e., approach of the AO relying upon his to the extent of admission of his engagement as an accommodation entry provider and ignoring the other portion of the statement, which did not suited the AO of the rate of commission and the limited role of the appellant in such activity.

6.8 The appellant also strongly disputed the amount of foreign remittances adopted by the AO by unilaterally picking up the total amount of foreign remittances made by the companies as per Form-15CA (in A.Y. 2020 21 and 2021-22), on the ground that the total foreign remittances made by the relevant companies cannot solely be attributed to the appellant; and on the ground that the AO did not follow a uniform approach of picking the amounts as per bank statements or Form 15CA, in as much as, in A.Y. 2020-21 and 2021-22, the AO adopted the amounts as per Form 15CA, whereas in A.Y. 2022-23, the AO adopted the amount as per Bank Statements.

6.9 it is observed that while the appellant has objected to the action of AO in adopting the amount as per Form-15CA but never rebutted the same or brought any other evidence on

18 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

record suggesting the actual amount that should have been adopted to compute the amount of commission income. The appellant further raised objections on the action of the AO in adopting the rate of commission @ 2.5% of the foreign remittances and prayed for the same to be restricted to 10 Paisa per dollar, which effectively worked out to 0.135%, assuming the rate of dollar to be Rs. 74.61 as on 1.7.2021, (as per the rate adopted by the AO in the assessment order) on the ground that (i) he had admitted in his statement the rate of commission @ 10 Paisa per dollar and if the AO was relying upon his statement then the said statement should be relying upon entirety and not on piece meal basis; (ii)having regard to the limited scope of work carried out by the assessee, which stood proved through his statement recorded at the time of search and subsequently by the fact that no other incriminating material was found at the time of search or post search investigation or assessment that the appellant was in any manner in control of the said companies or its respective bank accounts.

6.10 in support of the above, the appellant also brought on record the reports from Chartered Accountant to substantiate that the appellant was neither a director nor a shareholder in any of the companies in question.

6.11 have considered the aforesaid contention of the appellant and find merits in the same. I find that there is no basis for the AO to arrive at the rate of commission income of 2.5% which in any case appears to be too high. I am persuaded by the recent decision of Delhi High Court in the case of Hon'ble Delhi High Court in the case of PCIT vs. Third Generation Traders Private Limited ITA No. 137/2025 wherein the court upheld the order of Hon'ble ITAT that in case of accommodation entry provider only commission income could be added and the rate of commission at 0.25% was upheld. The relevant portion of the aforesaid order is reproduced hereunder:

19 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

according to the AO, the Assessee company was a conduit operated by Jain Brothers.

6.12 The appellant has also referred to certain other decision of Tribunals where again the rate of commission has broadly been accepted in the range of 0.15% to 0.25%. Having regard to the aforesaid decisions the rate of commission @ 2.5%, that too on the basis of loose sheets which was in the nature of dumb document, appears to be unreasonable.

6.13 Further, in the facts of the present case it is seen that the appellant had itself admitted his commission income to be @ 10 paisa per dollar, which works out to 0.135%, if the dollar exchange rate is adopted at Rs. 74.61. There is further no evidence on record to suggest that the appellant was doing work more than facilitating the accommodation entry in the form of documentation work, which was admitted by him at the time of recording his statement u/s 132(4) of the Act.

6.14 For the aforesaid cumulative reasons, to meet the ends of justice and following the aforesaid jurisdictional Hon'ble Delhi High Court judgment in the case of PCIT vs. Third Generation Traders Private Limited, I hold that the rate of commission income 20.25% in the facts of the present case, to be justified.

6.15 In the year under consideration, the AO has adopted the total amount of foreign remittances from the underlying company at Rs. 50,92,16,078/- as per Form-15CA which although has been disputed by the appellant, but the said amount remain uncontroverted with any acceptable documentary evidences. Accordingly, the said amount of foreign remittances adopted by the AO is upheld, but the amount of commission income thereon is reduced from 2.50% amounting to 1,27,30,402 of 0.25% of the said amount which works out to Rs. 12,73,040/-. In view of the same, the addition to the extent of Rs. 1,14,57,362/- is deleted and to the extent of Rs. 12,73,040/- is hereby sustained.”

20 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

Further that the Ld. CIT(A) has shifted the aforesaid 8.

commission income from unexplained money u/s 69A of the Act as

held by Ld. AO to taxable under head “Profit and Gains from

Business Profession”, consequently to compute the tax as per

normal rate as against rate of tax as per section 115BBE in the order

of assessment, by holding as under:

“6.16 The appellant has also challenged the action of AO in making the addition of the aforesaid commission income u/s 69A and applying the rate of tax thereon rate prescribed under section 115BBE of the Act.

6.17 find that the provision of section 69A are applicable when the source of asset found to be in possession of assessee is not explained. Firstly, here is not a case of any unexplained asset but a case of unreported income. The source of said unreported income stands explained by the assessee which have been admitted by the AO to be commission income from facilitating accommodation entries.

6.18 The income, thus, cases to be income from unexplained sources but income from business/professional operations, to which section 69A cannot be applied. When section 69A is not applicable the aforesaid addition is to be sustained under the head of business or profession to which the higher rate of tax u/s 115BBA cannot be applied.

6.19 I am persuaded for the aforesaid view from the decision of Hon'ble Nagpur Bench of Tribunal in the case of DCIT vs. Shri Biharilal ShaduramChhabriya Kirana Oil ITA No. 106/Nag/2023 wherein it has been observed as under:

21 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

similar transactions. Moreover, the Assessing Officer had simply kept his hands shut and did notconduct any enquiry to examine the veracity of the seized documents. It is not the case that the Assessing Officer did not have the particulars of lenders before him. He did not understand the trite fact that an individual lender cannot earn brokerage from himself which is an impossible situation when the assessee had denied that his own funds were involved in cash loans, the Assessing Officer needed to controvert the same by unearthing some corroborative evidences which he had miserably failed to do so. There are absolutely no credible and reliable evidences to establish that entire loans in cash were from the undisclosed funds whereas loan in cheques were accepted to be that of person other assessee and his role as a conduit or a mere intermediary was established. It is quite natural that the assessee is in a vantage position to mediate for loans in cash also. We further infer that-

A document seized in the search should be read as a whole. ii) No party can pick and choose one part of document for its advantage. (iii) if an explanation relating to a transaction is found in the seized material, the same has to be considered. The onus will shift on to the Department to adduce further material to support its contention that ostensible as appearing from the document is not real.

(iv) The initial burden lying on the assessee to explain the transactions fin this case, outgoings) can be discharged either from the statement recorded under s. 132(1) or from other documents found and seized in the search. Once onus shifted from the assessee, it is for the Department to prove by adducing additional material that the statement so given was false or not true or that corroborative entries from other documents arefalse or not reliable. There is another aspect of the case. It is not always desirable to reject the explanation furnished by the assessee. Totality of circumstances and preponderance of probability has to be taken into account before rejecting the explanation furnished by the assessee. If, as in the present case, the sources of income of the assessee are not such that it would yield large scale profits or there is no evidence of large scale hidden or secret wealth, then the plausibility of explanation of the assessee that outgoings are not his money but are the money of the lenders, is required to be accepted. In this context, following observation of Hon'ble Supreme Court is relevant (headnotes): CIT vs. Smt. P.K.Noorjahan (supra):

22 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

In the corresponding clause of the Bill which was introduced in Parliament, while inserting s. 69 in the IT Act, 1961, the word "shall" had been used but during the course of consideration of the Bill and on the recommendation of the Select Committee, the said word was substituted by the word "may". This clearly indicates that the intention of Parliament in enacting s. 69 was to confer a discretion on the ITO in the matter of treating the source of investment which has not been satisfactorily explained by the assessee as the income of the assessee and the ITO is not obliged to treat such source of investment as income in every case where the explanation offered by the assessee is found to be not satisfactory. The question whether the source of the investment should be treated as income or not under s. 69 has to be considered in the light of the facts of each case. In other words, a discretion has been conferred on the ITO under s. 69 of the Act to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and the said discretion has to be exercised keeping in view the facts and circumstances of the particular case. "Held, dismissing discretion had not been properly exercised by the ITO and the AAC takingthe appeal, that in the instant case, the Tribunal had held that the discretion has been properly exercised by the ITO and the AAC taking into account the circumstances in which the assessee was placed and the Tribunal had found that the investments could not be treated as income of the assessee The High Court had agreed with the said view ofthe Tribunal. There was no error in the finding recorded by the Tribunal. Sec. 69 could not be invoked in respect of the investments of the assessee."

6.20 In view of the above, I direct the AO to charge commission income under the head of profits and gains from business or profession, instead of treating it as unexplained income u/s 69A of the Act and consequently compute the tax as per normal rate as against rate of tax as per section 115BBE applied in the assessment order.

6.21 In terms of the above, the present ground of appeal no. 5 is partly allowed.”

made by assessee to other entities in lieu of cash, held as

unexplained money u/s 69A of the Act, the Ld. CIT(A) restricts the

23 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

addition to the 0.25% of amount of remittances by relying upon

judgment of Hon’ble Jurisdictional High Court of Delhi in case of

PCIT vs. Third Generation Traders (P) Ltd. in ITA No. 137/2025.

Finding of the Ld. CIT(A) is reproduced hereunder:

“7. Ground No. 6: pertain to the addition of Rs. 7,50,37,000/- un account of alleged cash receipts in lieu of alleged RTGS made by the appellant.

7.1 The aforesaid addition has been made by the AO u/s 69A holding the appellant to be owner of unexplained money on the basis of excel sheet marked as Exhibit-V found from his Mobile during search and reproduced in the assessment order, which has been reproduced above. As can be seen from the said excel sheets, name of certain beneficiaries of cash payments were mentioned in the said excel sheet, aggregating to Rs. 7,50,37,000/-which has been added by the AO u/s 69A in the present order. In the statement recorded by the appellant u/s 132(4), he again explained the same to be accommodation entries facilitated by him.

7.2 In the appeal proceedings, the appellant has challenged the addition of the aforesaid entire amount in the hands of the appellant, simply on the basis of amounts mentioned in the excel sheet, without any corroborative evidence of the appellant to be receiving the entire said amount as undisclosed income and also the action of the AO in ignoring his statement, where his admission was only restricted to his role as facilitator of accommodation entries.

7.3 It is seen that the AO has also not made any further attempt post search either in the investigation proceedings or assessment proceedings to find any corroborative material suggesting that the assessee was the beneficiary of the entire amount mentioned in the excel sheet or the same reflected hisunaccounted income. While the excel sheet is a loose sheet, which is strictly not in the nature of account and, therefore, lacked evidentiary value, however, assuming the case of AO to be correct even then it can be seen that the name of the appellant is not mentioned therein as the recipient of the amount of cash, but carry name of certain third parties, who can be assumed to be beneficiaries of the corresponding amounts, on bare reading of the excel sheet. Under these circumstances, due credence can be given to the statement of

24 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

the assessee recorded at the time of search where he has admitted his role to be facilitating accommodation entries, akin to his role in relation to accommodation entries provided outside India, where I have upheld the undisclosed income of the appellant only to the extent of commission income earned therefrom @ 0.25%, following the decisions of Hon'ble Delhi Iligh Court in the case of PCIT vs. Third Generation Traders Private Limited ITA No. 137/2025

7.4 In view of the aforesaid decision, and following my decision rendered in Ground of appeal No. 5 above, I hold that the entire amount of Rs. 7,50,37,000/- could not be treated as entire undisclosed income of the appellant simply on the basis of single loose sheet found from his Mobile and the addition on account of undisclosed income is restricted to 0.25% thereof as income in the nature of commission amounting to Rs. 1,87,593/- (Rs. 7,50,37,000-0.25%). In view of the same, the addition to the extent of Rs. 7,48,49,407/-stands deleted and the addition to the extent of Rs. 1,87,593/-is hereby sustained.”

to Rs. 1,87,593/- from unexplained money u/s 69A of the Act as

held by Ld. AO to taxable under head “Profit and Gains from

Business Profession”, consequently to compute the tax as per

normal rate as against rate of tax as per Section 115BBE in the

order of assessment.

Authority, both revenue and assessee has preferred cross appeals

before us.

for the Revenue, have also perused the material placed on record,

25 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

including the orders of the lower authorities, written

submission/Chart, and paper books filed before us.

estimated at 2.50% of foreign remittances aggregating to Rs.

50,92,16,078/- by Ld. AO, which has been restricted to commission

at the rate of 0.25% by Ld. CIT(A), assessee has raised ground 4 to

4.3 in this context and revenue has raised the ground 1, in their

appeal. Grounds preferred by both the parties are reproduced

hereunder:

4.1 That the Ld. CIT(A) erred on facts and in law, in confirming the addition made by the AO on the basis of statement of the appellant, in the absence of any corroborative evidence. Without prejudice to the above:

4.2. That the Ld. CIT(A) erred in law in not appreciating the facts that the entire amount of foreign remittances as reflected in the Form 15CA/CB of various companies was wrongly attributed to the appellant, despite the appellant neither being a director nor a shareholder in those companies.

4.3. That the Ld. CIT(A) has erred in law by applying a commission rate of 0.25% on the alleged foreign remittances

26 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

facilitated by the appellant, instead the rate of 1.10 paise per USD Dollar as stated by the appellant in his statement.”

“1. On facts and in law, the Ld. CIT(A) has erred in restricting the addition of Rs. Rs. 1,27,30,402/- made u/s 69A of the Income-tax Act, 1961 to Rs. 12,73,040/-, by applying a commission rate of 0.25% as against 2.5% applied by the Assessing Officer, ignoring the incriminating seized material and the assessee's admission recorded u/s 132(4).”

remittance is the subject matter before us.

the aforesaid grounds is reproduced hereunder:

Assessment Year Issue Finding Findings Our Remarks of AO of CIT(A) SET OUT • The rate of commission ought to be SET SET OUT OUT restricted to 0.15%, based on the Assessee’s own statement recorded during the course of proceedings. • The Assessee categorically admitted that commission was charged at the rate of 10 paise per US Dollar, which works out to approximately 0.135% of the foreign remittances; therefore, adopting a reasonable rounding-off principle, the rate should be restricted to 0.15%.

out on 10.10.2021,in the group of Sh. Rupesh Kumar Batra, Aditya

27 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

Kumar Jha and others including assessee/appellant before us. During

the course of search, statement of assessee/appellant was recorded u/s

132(4) of the Act, wherein assessee states that the domestic entities like

M/s SMKJ Tour and Travels, which was used to maintain by assessee,

M/s Streemgold International (OPC) Pvt. Ltd., though incorporated by

Sh. Rakesh Kumar Jha, wherein assessee tried for importing

electronics items, are used for entry business, which are under the

control of the assessee, though he has no control over any foreign

entity. Assessee further states that the hawala operators like Sh. Sunny

Khurna used to contact him with their requirement of fund transfer to

foreign entities and then the assessee did the paper work for sending

remittances to foreign entities from domestic entities under the control

of the assessee. Relevant Question No. 5,6 and 13 of statement of

assessee is reproduced hereunder:

28 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

29 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

commission of Rs. 0.10 paisa per USD of foreign

remittances.However,the Ld. AO, in view of one of the Excel Sheets

found from the mobile phone of the assessee, that an additional

amount has been written with + sign with the rate of USD, reached

to the conclusion that the commission was at higher rate nearly 2 to

2.5 %, and has not accepted the contention of the assessee. In the

said excel sheet column “D”, exchange rate is mentioned and there is

30 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

also an amount with +sign. Therefore, the assessee was charging +

amount as commission per USD for foreign remittance and on

calculation of the + amount with per USD, assessee’s commission for

each dollar comes between 2 to 2.5% calculated as under: Example;

Date 01.07.2021, Per USD Rate Rs. 74.61/-, Extra amount charged

1.65, Calculation in % age = 1.65*100/74.61=2.21%.

In this regard, we have further considered the following calculation

given by the Ld. AR:

Working of Commissioner Rate of 0.135%

Exchange Rate adopted by AO: Rs. 74.61 per USD

(Refer page 22 of Assessment Order for A.Y 2021-22)

Commission as per Assessee’s statement: Rs. 0.10 (10 paise) Per

USD

Calculation of percentage

0.10 X 100 74.61 = 0.135%

Rounded off Rate: 0.15%

keeping in view the assessee’s statement recorded confirming a

charge of 10 paise per USD (0.135%), the contention made by the

31 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

assessee is found to be acceptable and thus, the rate of commission

should be restricted to 0.15%. Ordered accordingly.

has erred in treating commission income as business income instead

of unexplained money u/s 69A and in directing to tax it at normal

rates instead of the rate prescribed u/s 115BBE of the Act in this

regard we find that the Ld. CIT(A) observed that the provision of

Section 69A is applicable when the source of the asset found to be in

possession of the assessee, is not explained. Whereas it is not a case

of any unexplained asset but a case of unreported income source

whereof stands explained by the assessee or attributed to

commission income from facilitating accommodation entries. In that

view of the matter the case ceases to be income from unexplained

sources but income from business/professional operations to which

provision of Section 69A cannot be applied and therefore, the

aforesaid addition is to be sustained under the head of business or

profession to which the higher rate of tax under Section 115BBE

cannot be applied. The observation as above made by the Ld. CIT(A)

is found to be justified so as not to warrant interference. In that view

of the matter the grounds of appeal raised by the revenue is found to

be devoid of any merit and thus, dismissed.

32 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

appeal are in reference to addition of Rs. 7,50,37,000/- being RTGS

made by assessee to other entities in lieu of cash, held as

unexplained money u/s 69A of the Act by Ld.AO. The Ld. CIT(A),

restricts the addition to the 0.25% of amount of remittances by

relying upon judgment of Hon’ble Jurisdictional High Court of Delhi

in case of PCIT vs. Third Generation Traders (P) Ltd. in ITA No.

137/2025.

data available in the mobile phone of the assessee being an excel

sheet marked as Exhibit-V, wherein cash entries were recorded with

different names and in this context the assessee in his statement

stated that he wanted to enter into the business therefore in order to

make relations with various businessmen heprovided RTGS entry in

lieu of cash. Ld. AO has made the addition of Rs. 7,50,37,000/- u/s

69A of the Act. The Ld. CIT(A) has restricted the addition to Rs.

1,87,593/- being commission at the rate of 0.25%, by recording his

finding as under:

“7. Ground No. 6: pertain to the addition of Rs. 7,50,37,000/- un account of alleged cash receipts in lieu of alleged RTGS made by the appellant. 7.1 The aforesaid addition has been made by the AO u/s 69A holding the appellant to be owner of unexplained money on the

33 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

basis of excel sheet marked as Exhibit-V found from his Mobile during search and reproduced in the assessment order, which has been reproduced above. As can be seen from the said excel sheets, name of certain beneficiaries of cash payments were mentioned in the said excel sheet, aggregating to Rs. 7,50,37,000/-which has been added by the AO u/s 69A in the present order. In the statement recorded by the appellant u/s 132(4), he again explained the same to be accommodation entries facilitated by him.

7.2 In the appeal proceedings, the appellant has challenged the addition of the aforesaid entire amount in the hands of the appellant, simply on the basis of amounts mentioned in the excel sheet, without any corroborative evidence of the appellant to be receiving the entire said amount as undisclosed income and also the action of the AO in ignoring his statement, where his admission was only restricted to his role as facilitator of accommodation entries.

7.3 It is seen that the AO has also not made any further attempt post search either in the investigation proceedings or assessment proceedings to find any corroborative material suggesting that the assessee was the beneficiary of the entire amount mentioned in the excel sheet or the same reflected hisunaccounted income. While the excel sheet is a loose sheet, which is strictly not in the nature of account and, therefore, lacked evidentiary value, however, assuming the case of AO to be correct even then it can be seen that the name of the appellant is not mentioned therein as the recipient of the amount of cash, but carry name of certain third parties, who can be assumed to be beneficiaries of the corresponding amounts, on bare reading of the excel sheet. Under these circumstances, due credence can be given to the statement of the assessee recorded at the time of search where he has admitted his role to be facilitating accommodation entries, akin to his role in relation to accommodation entries provided outside India, where I have upheld the undisclosed income of the appellant only to the extent of commission income earned therefrom @ 0.25%, following the decisions of Hon'ble Delhi Iligh Court in the case of PCIT vs. Third Generation Traders Private Limited ITA No. 137/2025

7.4 In view of the aforesaid decision, and following my decision rendered in Ground of appeal No. 5 above, I hold that the entire amount of Rs. 7,50,37,000/- could not be treated as entire undisclosed income of the appellant simply on the basis of single loose sheet found from his Mobile and the addition on account of undisclosed income is restricted to 0.25% thereof as

34 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

income in the nature of commission amounting to Rs. 1,87,593/- (Rs. 7,50,37,000-0.25%). In view of the same, the addition to the extent of Rs. 7,48,49,407/-stands deleted and the addition to the extent of Rs. 1,87,593/-is hereby sustained.”

CIT(A) was of the view that the AO has not made any further

attemptto post search either in the investigation proceedings or

assessment proceedings to find out any corroborative material

suggesting that the assessee was the beneficiary of the entire

amount mentioned in the excel sheet or the same reflected his

unaccounted income.

Once the assessee was found to be facilitating accommodation

entries outside India the Ld. AO cannot change his stand for

domestic RTGS and thus, the reason assigned by the Ld. CIT(A) in

restricting the undisclosed income to 0.25% is found to be just and

proper so as not to warrant interference. The ground preferred by

both the assessee has thus, not found justified and hence dismissed.

submission has been made is the support, therefore are dismissed

as such.

made either in written submission and otherwise. Even otherwise

35 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

Ground 6 and 7 are in support of Ground 4 and 5, which has been

decided supra, therefore these, grounds are not adjudicated

separately and thus, dismissed as such.

assessee has challenged the initiation of proceedings u/s 147 of the

Act and order of assessment itself. In these regards no submission

has been made either in written submission and otherwise. Even

otherwise here is a case, where search action has been conducted on

the appellant himself on or after 1.4.2021, in view of the clause (i) to

Explanation 2 to Section 148 of the Act, it is deemed that there is

information with the Ld. AO which suggest that the income

chargeable to tax has escaped assessment in the case of the

assessee. Further appellant has not pointed out any specific legal

infirmity in the action of AO, thus grounds 1 to 3 of appellant

dismissed as such.

allowed.

ITA NO. 6532/Del/2025 (Assessee’s Appeal) and ITA No.

7056/Del/2025 (Revenue’s Appeal) for Assessment Year 2021-

22.

36 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

assessee’s appeal in the instant appeal are identical to Ground 1 of

revenue’s appeal and Grounds 4 to 4.3 of assessee’s appeal for

assessment year 2020-21 and thus finding in the aforesaid appeal

shall mutatis mutandis applies to these grounds of appeal.

to ground 6 and 7 of assessee’s appeal for assessment year 2020-21,

thus finding in the aforesaid appeal shall mutatis mutandis applies

to these grounds of appeal.

to Ground 3 of revenue’s appeal for AY 2020-21, thus finding in the

aforesaid appeal shall mutatis mutandis applies to this ground of

appeal.

challenged the jurisdiction of order of assessment itself. In these

regards no submission has been made either in written submission

and otherwise. Appellant has also not pointed out any specific legal

infirmity in the action of AO, thus grounds 1 and 2 of appellant

dismissed as such.

37 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

submission has been made either in written submission and

otherwise. Thus grounds 1 and 2 of appellant dismissed as such.

deletion of addition of Rs. 9,78,441/- representing increase in

proprietor’s capital.

finding as extracted hereunder:

“18. Further, on perusal of ITR for A.Y. 2021-22, it is noticed that the assessee has shown proprietor capital of Rs.86,82,248/- and in the ITR for A.Y. 2020-21, the assessee has shown proprietor capital of Rs.66,90,067/-. It can be seen that the assessee has increased the capital of Rs. 19,92,181/- (86,82,248-66,90,067) in the year under consideration. However, the assessee has shown net taxable income of Rs. 10,13,740/- onlyfor the A.Y. 2021-22 and paid tax thereon. The same is resulted into excess addition of Rs.9,78,441/- (86,82,248-66,90,067) in proprietor capital.

Further, the assessee has not furnished any reply to the notices issued to him. Therefore, the provisions of section 68 of the Income-tax Act, 1961 shall apply and the addition to capital is held as the income of the assessee from undisclosed sources. 18.1 In view of the provisions of section 68 of the Income-tax Act, 1961, the excess addition amount in proprietor capital to the extent of Rs. 9,78,441/- is added to the income of the assesseeand tax is charged u/s 115BBE of IT Act, 1961.

(Addition:-9,78,441/-)

I am satisfied that it is a fit case to initiate penalty u/s 271AAC of the I.T.Act, 1961 is initiated.”

38 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

“8. Ground No. 6: pertain to the addition of Rs. 9,78,441/ on account of receipt of excess amount in proprietor's capital u/s 68 of the Act.

8.1 The AO upon reviewing the Income Tax Return, observed that the appellant's capital increased by Rs. 19,92 181/- (Closing balance: 86,82,248 minus opening balance: 66,90,067). However, since the appellant has shown net taxable income of Rs. 10,13,740/- for the A.Y. 2021-22 and paid tax thereon. Accordingly, the AO considered the excess increase in capital to the tune of Rs. 9,78,441/- (19,92,181 - 10,13,740) as unexplained, and accordingly, addition of the said amount was made u/s 68 of the Act..

8.2 In response, the appellant submitted the summary of capital account:

8.3 Upon examining the summary, it is evident that the increase in the capital was primarily by business income, short- term capital gains and agricultural income and all of which were duly disclosed in the appellant return's and taxed accordingly.

8.4 Further, the AO had separately made an addition in respect of agricultural income of the appellant amounting to Rs. 14,78,000/- which also contributed towards increase in capital. Since the appellant had already disclosed the agricultural income in the ITR, the addition of 9.78 lakhs would effectively lead to double taxation of the same income, which is impermissible under the law. 8.5 Considering the facts and circumstances of the case, I find that the addition of Rs. 9,78,441/ of increase in capital is unsustainable. Therefore, the addition of Rs. 9,78,441/ made in the assessment order is hereby deleted.

39 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

8.6 in terms of the above, the present ground of appeal no. 6 is allowed.”

opinion that the, basis of Ld. CIT(A) is just and proper. Thus, doesn’t

warrant any inference. In result Ground 3 of the revenue is

dismissed.

CIT(A) deleting the addition of Rs. 13,13,860/- made u/s 41(1) of the

Act.

finding as extracted hereunder:

“19. Further, on perusal of ITR for A.Y. 2021-22, it is noticed that the assessee has shown sundry creditors of Rs.13,13,860/- and in the ITR for A.Y. 2020-21, the assessee has shown Nil creditor. However, in the absence of any reply from the assessee, it is held that the assessee has shown bogus liability in its books of account. Therefore, provisions of section 41(1) of the Income-tax Act, 1961 attracts in this case. Therefore, an amount of Rs.13,13,860/- is added u/s 41(1) of IT Act, 1961.

(Addition:- Rs. 13,13,860/-)

I am satisfied that the assessee has under reported his income by mis-reporting of facts. Therefore, penalty proceedings under Section 270A of the Act is big initiated separately on this issue.”

40 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

“9. Ground No. 7: pertain to the addition of Rs. 13,13,860/- on account of liability towards creditors u/s 41(1) of the Act.

9.1 The AO upon reviewing the Income Tax Return, observed that the appellant's had shown sundry creditors amounting to Rs. 13,13,860/-, while the I'Te for the previous AY indicated NIL creditors. Since the appellant failed to provide any explanation regarding the change in the creditor balance, it was concluded that he has recorded a bogus liability in its financial statements. As a result, an amount of Rs. 13,13,860/ is being added u/s 41(1) of the Act.

9.2 The appellant contended that the impugned addition of Rs. 13,13,860/-was made based on erroneous facts. The actual closing balance of trade creditors in the books of appellant was Rs. 8,58,560/- against the closing balance of Rs. 13,13,860/- assumed by the Ld. AO.

9.3 While the opening balance of trade creditors were Nil, the closing balance of Rs. 8,58,560/- is contributed by: Particulars Amount Opening balance -- Provisions 2,96,100/- Amount payable for the 2,31,742/- purchase of agricultural land Outstanding expense 3,10,418/- payable (net) Salary payable to 20,000/- employees Closing Balance 8,58,560/-

9.4 Further, the appellant referred section 11(1) of the Act under which the impugned addition of Rs. 13,13,860/ has been made by the Ld. AO, section 41(1) shows that it applies when an assessee has claimed an allowance or deduction for a loss, expenditure or trading liability and subsequently, during a fiscal year, is not required to pay such liability either due to remission or cessation. In short, if a liability is no longer payable and is waived, it is deemed to be the income of the assessee under section 41(1).

9.5 In the present case, section 41(1) is not applicable, as the trading liability has not been reduced but has increased from nil to Rs. 8.58 lakhs. Further, a review of the creditor/trade payable ledger (placed at page 27 of the APB) shows no instance of creditors being written back or any liabilities from Page | 40

41 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

previous year being waived. Therefore, the addition of Rs. 13,13,860/-made u/s 41(1) is unsustainable. Therefore, the addition of Rs. 13,13,860/-made in the assessment order is hereby deleted.”

opinion that the, basis of Ld. CIT(A) is just and proper, thus doesn’t

warrant any inference. In result Ground 4 of the revenue is

dismissed.

CIT(A) deleting the addition of Rs. 14,78,000/- made on account of

bogus agricultural income by allowing telescoping benefit.

finding as extracted hereunder:

“20. From the ITR of the assessee for A.Y. 2021-22, it is found that the assessee has claimed agriculture income of Rs. 14,78,000/-. In response to the query raised in respect of agriculture income earned by the assessee, no reply has been furnished. The assessee has failed to produce the details of agriculture land, details of agriculture production, seeds bills, fertilizers bills, watering bill, electricity bills and labour bill. Further, the assessee has also failed to produce the details of party to whom agriculture product was sold by him. In the absence of any reply from the assessee with respect to agriculture income, the same is held to be bogus agriculture income. The same is liable to be added back in the income of the assessee. Hence, the addition of Rs.14,78,000/-is made to the total income of the assessee. I am satisfied that the assessee has under reported his income by mis-reporting of facts. Therefore, penalty proceedings u/s 270A r.w.s 274 of the Act is being initiated separately on this issue.

(Addition:- Rs. 14,78,000/-)"

42 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

“11. Ground No. 8, pertain to the addition of Rs. 14,78,000/-on account of agriculture income.

11.1 The AO upon reviewing the Income Tax Return, observed that the appellant declared agriculture income of Rs. 14,78,000/-. During the assessment proceedings, the appellant failed to produce the details of agriculture land, details of agriculture production, seeds bills, fertilizers bills, watering bill, electricity bills and labour bill in response to queries raised during the course of assessment proceedings. Additionally, the appellant also failed to produce the details of party to whom agriculture product was sold by him and hence the agricultural income of Rs. 14,78,000/- was held to be bogus agriculture income. In the present appeal proceedings, it is observed that the appellant could not bring anything new to support the original stand of agricultural income.

11.2 However, the appellant. principally argued that since the appellant is being independently assessed at additional business income on account of accommodation entries by way of commission income or otherwise, the aforesaid amount of agricultural income originally declared in the Return should be telescoped to such income, in order to avoid double taxation of income. In other words, the appellant sought for benefit of telescoping of additional income brought to tax by the AO to the impugned agricultural income. The appellant, in this regard, relied upon following, case-laws wherethe theory of telescoping has been unequivocal valid for tax laws:

(1) In the cause CIT S. Nellioppan (1967) 66 ITR 722 (SC), the Hon'ble Supreme Court held that even in the absence of direct evidence of any connection between the cash credit entries and the income withheld from the books of account by the assessee if the Tribunal inferred that there was a connection between the profits withheld from the books and the cash credit entries, then the said conclusion must be upheld and it cannot be said that the conclusion is based upon speculation.

(ii) In the case of CIT v. K.S.M. Guruswamy Nadar and Sons (1984) 149 ITR 127 (Mad), it was act by the Madras High Court that when there are two separate additions, on account of suppression of profit and another on account of cash credit, it is open to the assessee to explain that the suppressed profits had been brought in as cash credits and one has to be telescoped into the other resulting only in one addition. It was, therefore, Page | 42

43 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

held that the Tribunal was right in its view in telescoping the additions made towards the cash credits.

11.3 I have considered the assessment order and arguments of the appellant. I find that the theory of telescoping is well- established in Income Tax Laws and the principle is avoidance of double taxation of same income under multiple heads. Further, I also fired that, no other incriminating material or evidence has been found with regard to the agricultural income declared in the return of income. The only basis of addition is the self-declaration of such exempt agricultural income by the appellant in the return of income, which has been denied by the AO for want of valid documentation of providing its source to agricultural activities which has not been satisfied by the appellant. Thus, it is reasonable to assume that the aforesaid income reflected by the appellant is attributable to other undisclosed income which has been assessed, basis incriminating material found in the course of search, or on other words telescoping agricultural income to undisclosed income found and assessed independently. In view of the same, considering that the AO has admitted that the appellant had earned undisclosed income with respect to the activity of accommodation entries which has even been upheld by me,while deciding appeal filed by the appellant against assessment order for A.Y. 2020-21 and also disposing ground of appeal no. 8 of the present appeal, I find that the benelit of telescoping of other assessed undisclosed incomes cau be given against impugned agricultural income declared as exempt income by the assessee in the return of income.

11.4 For the purposes of the above telescoping, the additional incomes assessed in appeal for A.Y. 2020 21 and the present appeal, arc clubbed together hereinbelow:

44 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

11.5 In view of the above table, it can be seen that total undisclosed income aggregating to Rs. 57,04,284/- was sufficient enough to telescope to impugned income of Rs. 14,78,000/- for which no other evidence was either found in search or has been referred by the AO apart from the self- declaration of exempt agricultural income made by the appellant in the Return, which remain unsubstantiated.

11.6 For the aforesaid reason, the present addition of Rs. Rs. 14,78,000/- is hereby deleted. Ground of appeal no. 8 is allowed.”

opinion that the, basis of Ld. CIT(A) is just and proper,and thus,

doesn’t warrant any inference. In result Ground 5 of the revenue is

dismissed.

and the appeal filed by the Revenue is dismissed.

45 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

ITA No. 6533/Del/2025 (Assessee’s Appeal) and ITA No. 7057/Del/2025 (Revenue’s Appeal) for Assessment Year 2022-23.

47 Ground 1 of revenue’s appeal and Grounds 3 to 3.3 of

assessee’s appeal in the instant appeal are identical to Ground 1 of

revenue’s appeal and Grounds 4 to 4.3 of assessee’s appeal for

assessment year 2020-21 and thus finding in the aforesaid appeal

shall mutatis mutandis applies to these grounds of appeal.

to ground 6 and 7 of assessee’s appeal for assessment year 2020-21,

thus finding in the aforesaid appeal shall mutatis mutandis applies

to these grounds of appeal.

to Ground 3 of revenue’s appeal for AY 2020-21, thus finding in the

aforesaid appeal shall mutatis mutandis applies to this ground of

appeal.

appeal, in the instant appeal are identical to Ground 2 of revenue’s

appeal and Grounds 5 to 5.1 of assessee’s appeal for assessment

year 2020-21 and thus finding in the aforesaid appeal shall mutatis

mutandis applies to these grounds of appeal.

46 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

CIT(A) deleting the addition of Rs. 21,08,000/- representing cash

seized by allowing telescoping benefit.

finding as extracted hereunder:

“8. Ground No. 4, pertain to the addition of Rs. 21,08,400/-on account of cash found during the search u/s 69A of the Act.

8.1 During the course of search proceedings, the total cash of Rs. 21,08,400/- was found out of which cash of Rs. 19,00,000/- was seized by the tax officials. In his statement during the search, the appellant explained that the cash of Rs. 18,00,000/- was received as advance against the sale of shop in Ghaziabad and while the balance of Rs. 3,08,400/- was sourced from his own income and savings. In the assessment order, the AO however added the entire amount of Rs. 21,08,400/- to the income of the Appellent under section 69A of the Act.

47 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

8.2 in the present appeal, the appellant could not bring sufficient evidences to prove the source of the aforesaid cash, but, alternatively, argued that the source of said cash need to be telescoped to other undisclosed income added by the AO, in order to avoid double taxation of income. In other words, theappellant sought for benefit of telescoping of additional income brought to tax by the AO to the cash found.

8.3 I have considered the assessment order and arguments of the appellant. I find that the appellant has not been able to successfully establish the source of cash to any declared sources of income and, therefore, the action of the AO in not accepting the same stands accepted. However, I have already upheld the theory of telescoping while deciding ground of appcal no. 8 in A.Y. 2021-22, which can be applied to the lacts of the present transaction also, as both the appellant and the AO have not been able to trace the source of impugned cash with any other undeclared source. Thus, the appellant is entitled to the benefit of telescoping to trace the source of impugned cash to undisclosed income on account of commission income and other incomes assessed and to the extent upheld by me in appeals for A.Υ. 2020-21 & A.Y. 2021-22 and preceding grounds of the present appeal for A.Y. 2022-23.

8.4 For the purposes of the above telescoping, the additional incomes assessed in appeal for A.Y. 2020-21 & Α.Υ. 2021-22 and the present appeal, are clubbed together hereinbelow:

48 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

8.5 In view of the above table, it can be scer that total undisclosed income aggregating to Rs. 1,99,91,704/ was sufficient enough to telescope to cash found of Rs. 21,08,400/ for which no other evidence was either found in search or has been referred by the AO apart from the statement of cash found, which remain unsubstantiated.”

opinion that the, basis of Ld. CIT(A) is just and proper, thus, doesn’t

warrant any inference. In result Ground 3 of the revenue is

dismissed.

CIT(A) deleting the addition of Rs. 1.02 Cr on account of bullion/

jewellery by allowing benefit as per CBDT Instruction.

as extracted hereunder:

“13. During the course of search proceedings, jewellery amounting to Rs. 1,02,01,286/- was found from the possession of the assessee. The assessee was requested to submit the source of acquisition of mixed gold jewellery, silver and Gold Bullion as mentioned above. The asessee was also requested to furnish the bills/invoices in respect of the above mentioned mixed gold jewellery, silver and Gold Bullion. Despiting providing various opportunities, no documentary evidence vis-à-

49 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

vis source of acquisition the above valuable items furnished by the assessee. Accordingly, addition of Rs. 1,02,01,286/- is made u/s 69B of the Income-tax Act, 1961.

(Addition of Rs.1,02,01,286/-)

The penalty u/s 271AAC of the I.T.Act, 1961 is initiated.”

“9. Ground No. 6, pertain to the addition of Rs. 1,02,01,286/ on the ground that the gold jewellery/bullion found during the search on the appellant regarded as his unexplained investment u/s 69A of the Act.

9.1 During the search operation, a locker was discovered at the Contral Bank of India, Chanakyapuri, Delhi, registerer in the names of the appellant and his wife, Ms. Sambhavi Jha. Upon accessing the locker, the following assets were found: S. Descriptions Total Value No. 1 Mix Gold Jewellery 2,64,686/- 2 Silver 36,600/- 3 Gold Bullion 99,00,000/-

9.2 in his statement recorded during the search, the appellant explained that the Jewellery and Silver pertains to the wife of the appellant, Ms. Sambhavi Jha while the bullion of Rs. 99,00,000/- was received a gift from his mother. In the assessment order, the AO however added the entire amount of Rs. 1,02,01,286/- to the income of the appellant u/s 69A of the Act. 9.3 In the present uppeal, the appellant was unable to furnish bill or wucher to substantiate the source of the jewellery, but, alternatively, negued that the total jewellery of Rs. 3,01,686/- belongs to the wife of the appellant which is well within the limit prescribed by CBDT Instruction No. 1916 dated 11.05.1994 which states that the source of guldjewelleryupto 500 grams for a married lady required no explanation. As regards the bullion of Rs. 09,00,000/-, it was alternatively argued that, the same need to be telescoped to other undisclosed income added by the AO, in order to avoid double taxation of income. In other words, the appellant sought for benefit of telescoping of additional income brought to tax by the AO to the cash found.

50 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

9.4 I have considered the facts and circumstances of the present issue. I find that the appellant has not been able to successfully establish the source of subject assets to any declared sources of income and, therefore, the action of the AO in not accepting the same stands accepted. However, I find that, in so far as, the addition to the extent of Rs. 3,01,686/- towards jewellery is concerned, the same is squarely covered by the CBDT instruction No. 1916, which provides that jewellery within prescribed limits need not be proved hy the appellant. The jewellery to the aforesaid extent can be agreed to be belonging to wife and fall within the prescribed limits. The appellant should, therefore, get relief to that extent, following the aforesaid binding CBDT Circular. In view of the same, addition to the extent of Rs. 3,01,685/- is deleted.

9.5 As regards the bullion of Rs. 99,00,000/-, the same is not found to be bought from declared sources of income, nor the appellant has brought any cogent evidences for the same. The action of the AO in rejecting arguments of the appellant in that regard arc, therefore, found to be in order. However, 1 find that the appellant should get the benefit of telescoping, which I have principally upheld while disposing other grounds in the present appeed and in appeal for the earlier years, more so when the AO has also not been able to trace acquisition of the impugned bullion to any other undisclosed sources of income of the appellant. Accordingly, it needs to be presumed and telescoped to the undisclosed income assessed in the impugned assessment orders, to the extent upheld by me.

9.6 in view of the above, for the purposes of the telescoping, the additional incomes assessed in appeal for A.Y. 2020-21 8 Λ.Υ. 2021-22 and the present appeal after reducing the cash found, are clubbed together hereinbelow:

51 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

9.7. In view of the above table, it can be seen that total undisclosed income aggregating to Rs. 1,78,83,304/- was sufficient enough to telescope to bullion found of Rs. 99,00,000/- and is therefore deleted. In view of the same, the entire addition of Rs. 1,02,01,286/- made by the AO stands deleted. Ground of Appeal No. 5 is allowed.”

opinion that the, basis of Ld. CIT(A) is just and proper and thus,

doesn’t warrant any inference. In result Ground 5 of the revenue is

dismissed.

52 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha

challenged the jurisdiction of order of assessment itself. In these

regards no submission has been made either in written submission

and otherwise. Appellant has also not pointed out any specific legal

infirmity in the action of AO. Thus, ground Nos. 1 and 2 of appellant

are dismissed as such.

A.Y 2020-21 Assessee’s appeal is partly allowed.

A.Y 2020-21 Revenue’s appeal is partly allowed.

A.Y 2021-22 Assessee’s appeal is partly allowed.

A.Y 2021-22 Revenue’s appeal is dismissed.

A.Y 2022-23 Assessee’s appeal is partly allowed.

A.Y 2022-23 Revenue’s appeal is dismissed.

Order pronounced in the open court on 18/09/2026.

Sd/- Sd/- (AMITABH SHUKLA) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 18/09/2026 R. Naheed, Sr PS Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT

ASSISTANT REGISTRAR ITAT, New Delhi

53 ITA Nos. 6531/Del/2025 and ors. Aditya Kumar Jha