ASHOK KUMAR KHANDELWAL,JAIPUR vs. DCIT, CENTRAL CIRCLE - 2, JAIPUR, JAIPUR

ITA 414/JPR/2026Status: DisposedITAT Jaipur18 September 2026AY 2019-2013 pages
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What did the Tribunal hold?

The Tribunal held that Section 40A(3) disallowance was not sustainable as the assessee had offered the income from undisclosed sales and no deduction was claimed. The addition for the loan from the father-in-law was upheld due to lack of proper verification. The estimation of household expenses by the AO was also upheld.

What were the facts?

During survey proceedings, a document found on the assessee's mobile phone indicated cash payments. The Assessing Officer (AO) disallowed these payments under Section 40A(3) and also added back a loan from the father-in-law and estimated household expenses. The CIT(A) confirmed these additions.

What were the issues?

Whether disallowance under Section 40A(3) is valid when the assessee has already offered income from undisclosed sales, and whether the addition for a loan from the father-in-law and estimation of household expenses are justified.

Which sections of the Income-tax Act were involved?

Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR “SMC” BENCH, JAIPUR

Before: SMT. ANNAPURNA GUPTA & SHRI KULDIP SINGH

PER : KULDIP SINGH, JUDICIAL MEMBER:-

The Appellant, Ashok Kumar Khandelwal (hereinafter referred to as the ‘assessee’) by filing aforesaid interconnected appeals, sought to set aside the impugned orders both dated 02.01.2026 passed by the Commissioner of Income Tax (Appeals)-4, Jaipur [hereinafter referred to as the ‘CIT(A)’] qua assessment year 2019-20 and 2020-21 on the grounds inter-alia that:- I.T.A No. 414 & 415/JPR/2026 Page No 2 Ashok kumar Khandelwal

“1. That the Id. CIT (A) has erred in law and on facts in confirming the action of Id. AO whereby he has applied provisions of section 40A(3) of the Income Tax Act, 1961 for disall

The order continues below.

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