GAURAV SADHWANI,KOLKATA vs. DCIT, CENTRAL CIRCLE 4(3), KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA‘B’ BENCH, KOLKATA BEFORESHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. No.937/KOL/2026 Assessment Years: (2021-22) Gaurav Aadhwani, DCIT, 4A, Jyotish Roy Road, New Vs. Central Circle – 4(3), Alipore, Kolkata – 700053, West Kolkata Bengal [PAN:CLMPS2316C] (Appellant) .. (Respondent) Appellant by : Shri Robin Maheshwari & Shri Pratik Tulsiyan, AR(s) Respondent by: Shri Sanjit Kumar Das, CIT-DR Date of Hearing 20.08.2026 Date of Pronouncement 01.09.2026

O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER:

This appeal filed by the assessee is directed against order dated 30.01.2026by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi(hereinafter referred to as the “ld. CIT(A)”) passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year (A.Y.) 2021-22.

ITA No.937/Kol/2026/A.Y. 2021-22 Gaurav Sadhwani vs. DCIT land dealing and assessed at normal rate of tax in the assessment u/s 143(3) in A.Y. 2020-21, therefore, confirmation of the addition amounted to double addition. 3. The facts of the case in brief are that the case of the assessee was taken up for investigation by the Investigation Wing, Kolkata based on the information published in the daily news “The Times of India” on 02.10.2020 wherein it was reported that the city cops recovered cash of Rs.6.95 crores from two storey Behala house of Shri Gaurav Sadhwani (the assessee). During the course of enquiry, the joint CP (Crime), Kolkata informed that no tax was paid by Shri Gaurav Sadhwani on the said amount and Shri Gaurav Sadhwani was arrested by the Police with a huge amount of cash of Rs.6.95 crores. Since the case was sub-judice before the Chief Metropolitan Magistrate (CMM), Kolkata, a petition to hand over the seized cash to the Income-tax Department was filed before the Court. The Hon'ble Court of CMM, Kolkata vide order dated 27.01.2021 directed the Investigating Officer to hand over the entire seized bank notes to the Income-tax Authority. In the meantime, a letter dated 10.02.2021 along with its enclosures of petition moved by the victim, ICICI Bank before the Hon'ble Court of CMM, Kolkata and claimed of Rs.40,26,450/- out of the seized cash of Rs.6.95 crore as the bank has paid a partial amount of ‘GBP 42500’, equivalent to Rs.40,26,450/-. The Hon'ble Court of CMM, Kolkata modified its earlier order dated 27.01.2021 and directed to handover an amount of Rs.40,26,450/- to ICICI Bank and balance of Rs.6,54,29,500/- to the Income-tax Department. Thereafter, a warrant u/s 132A(1) of the Act was issued for requisition of the said cash from Shri Suman Sadhukhan, Sub-Inspector, Anti Bank Fraud Section, Kolkata Police by the Pr. DIT (Inv.), Kolkata, dated 04.03.2021

ITA No.937/Kol/2026/A.Y. 2021-22 Gaurav Sadhwani vs. DCIT which was executed on 06.03.2021 and the cash of Rs.6,54,29,500/- was requisitioned and taken over by the Department. During the course of search proceedings, the statement of Shri Gaurav Sadhwani was recorded on oath u/s 131 of the Act on 24.03.2021, wherein he confirmed that cash of Rs.6,54,29,500/- was seized by the Department on requisition from Police on 06.03.2021 in pursuance of Warrant of Authorization dated 04.03.2021 u/s 132A(1) of the Act and further confirmed that total cash of Rs.6.95 crores was unaccounted income from his garment trading ,supply of construction materials and land dealing, which were not recorded in his regular books of account and offered the same for taxation. Thereafter notice u/s 153A was issued to the assessee for six assessment years prior to the date of requisition from A.Y. 2015-16 to 2020-21. The assessments for A.Y. 2020-21 were accordingly completed u/s 153A/143(3) of the Act accepting the returned incomes. The return of income for A.Y. 2021-22 was filed on 28.01.2021, showing total income of Rs.5,90,77,720/-. Acordingly, notices u/s 143(2) and 142(1) of the Act along with the questionnaires were issued and served upon the assessee. In response, the assessee filed submission on 10.02.2022 and 03.03.2022 with all evidences.

Commission 5,09,090 Dividend income 3100 Interest income 77,884 Any other income 5,97,97,068 Total 6,03,87,142 Land dealing 4,90,00,000 Long Term Capital Gain 2354 Lottery income 1,00,00,000

ITA No.937/Kol/2026/A.Y. 2021-22 Gaurav Sadhwani vs. DCIT Profit on Future & Option 7,22,716 Short term capital gain from mutual 34,648 fund Short term capital gain on share 37,350 ‘Any other income’ 5,97,97,068 5. Thereafter, the AO issued show cause notice as to why the cash of Rs.6.95 crores should not be treated as unexplained money and added to the income of the assessee u/s 69A of the Act. The assessee replied the said show cause notice vide a letter dated 08.03.2022 submitting that the assessee offered income of Rs.6.95 crores as income from business in two assessment years namely Rs.2,05,00,000/- in A.Y.2020-21 and Rs.4,90,00,000/- in A.Y. 2021-22. The AO however treated Rs.4,90,00,000/- as unexplained income u/s 69A of the Act qua the cash found with the assessee instead of business income offered by the assessee. The AO further added Rs.2,05,00,000/- as unexplained income despite the fact the same stood offered to tax in A.Y. 2020-21 and assessed at the normal rate in the assessment framed u/s 153A/143(3) of the Act. The AO also treated the balance of Rs.4.90 crore as unexplained money by reducing from the business income offered by the assessee and then adding the same u/s 69A as unexplained income thereby bringing to tax u/s 69A/115BBE of the Act, in the assessment framed u/s 143(3) of the Act, dated 23.03.2022.

ITA No.937/Kol/2026/A.Y. 2021-22 Gaurav Sadhwani vs. DCIT 7. We have heard rival submissions and perused the materials available on record. We find that undisputedly the assessee was found in possession of cash of Rs.6.95 crore on 02.10.2020 by Police during the search action. Later on, the Metropolitan Magistrate, Kolkata had directed the police to hand over the cash to the tune Rs.40,26,450/- to ICICI Bank and Rs.6,54,29,500/- to the Income-tax Department. The proceedings were initiated by the investigation wing u/s 132A(1) of the Act. The statement of the assessee was recorded u/s 131 of the Act and he admitted that the cash found represented his income from garment trading business, supply of construction materials and land dealings etc. The assessee offered the cash recovered from him as income from land dealings in two assessment years i.e., Rs.2,05,00,000/- in A.Y.2020-21 and Rs.4,90,00,000/- in A.Y.2021-22. We note that the assessment for A.Y.2020-21 was completed u/s 153A/143(3) of the Act vide order dated 23.03.2022 wherein the business income shown by the assessee Rs.2,05,00,000/- out of cash seized was assessed by the AO by accepting the same as business income and taxed at normal rate of tax. Copy of assessment order is available at pages 49 to 54 of the paper book. However, in A.Y. 2021-22, the AO completed the assessment u/s 143(3) of the Act vide order dated 23.03.2022, in which the AO added the Rs.2,05,00,000/- u/s 69A of the Act by ignoring the fact that income stood offered and assessed to tax u/s 143(3) of the Act, vide order dated 23.03.2022. Therefore, the action of the AO in assessing ₹ 2,05,00,000/- again and its confirmation by the ld. CIT(A) has resulted in double taxation of the same income which is not permissible under the Act. Moreover, the assessee, during the course of recording the statement on oath on has categorically stated that cash found from him represented the unaccounted income from garments trading, supply of building materials and land dealings, which was not offered to tax

ITA No.937/Kol/2026/A.Y. 2021-22 Gaurav Sadhwani vs. DCIT and the assessee has undertaken to pay the taxes thereon. Therefore, we are not in agreement with the decision of ld. CIT(A) confirming the said amount of Rs.2,05,00,000/-. Therefore, we set-aside the order of ld. CIT(A) on this issue and direct the AO to delete the addition. The ground no 1 is accordingly allowed.

ITA No.937/Kol/2026/A.Y. 2021-22 Gaurav Sadhwani vs. DCIT by way of undisclosed income from business even in the statement recorded by the investigation wing u/s 131 of the Act. Therefore , the same cannot be treated as unexplained money u/s 69A of the Act in absence of any corroborative evidences being brought on record by the AO. The issue is squarely covered by the decisions of various Tribunal, viz., (i) Sanjay Kumar Gupta vs. ACIT, ITA No.791/Kol/2025, dated 11.11.2025, (ii) Praveen Kumar G. Jain vs. DCIT, ITA No.2731/Chny/2024, dated 03.06.2025 and (iii) Channapatna Siddappaji Sandeep Gowda vs. CIT(A)-11, ITA Nos.1593 to 1595/Bang/2025, dated 28.11.2025. Since the assessee has already categorically stated on oath during the course of search and recording statement on oath u/s 131 of the Act that the cash was earned from the land dealing and other businesses, therefore, we are not in a position to sustain the addition confirmed by the ld. CIT(A) on this issue. We, accordingly, set-aside the order of ld. CIT(A) on this issue and direct the AO to treat ₹ 4,90,00,000/- as income from business and tax the same at normal rates. Accordingly, Ground No.2 is allowed.

ITA No.937/Kol/2026/A.Y. 2021-22 Gaurav Sadhwani vs. DCIT A.Y. 2020-21 of Rs.2,05,00,000/- and in the present A.Y. 2021-22 Rs.4,90,00,000/-. We also note that assessment in A.Y. 2020-21 has been framed as stated above u/s 143(3) of the Act in which Rs.2,05,00,000/- was accepted and assessed as income from business and assessed at normal rate. The part of the cash amounting to Rs.4,90,00,000/- has been offered tax as business income in A.Y. 2021-22, however, AO treated and assessed u/s 69A of the Act as unexplained money which in our opinion in wrong. In our opinion the AO can be allowed to take a one stand in A.Y. 2021-21 and another stand in A.Y. 2021-22. Therefore, the action of the ld. CIT(A) in enhancing the income u/s 251(1) r.w.s. 251(2) of the Act over and above the assessed income is wrong and fallacious and cannot be sustained as the assessee has already offered the total cash of ₹ 6,95,00,000/- to tax and we note that it is only on the direction of the Metropolitan Magistrate that out of the said total cash of Rs.6.95 crore, a part of the cash hand over to the ICICI Bank and the remaining Rs.6,54,29,500/-, was hand over to the Department. The ld. CIT(A) has thus not wrongly enhanced the income by observing that this amount of Rs.6,54,29,500/- is the amount qua which the assessee has not denied the ownership. In our opinion, the ld. CIT(A) overlooked and misconstrued the facts on records and again adding the same income by enhancing the income of Rs.6,54,29,500/-, which was the amount hand over to the department as ordered by the Metropolitan Magistrate. The issue is squarely covered by the decisions of various Tribunals in cases of (i) Sanjay Kumar Gupta vs. ACIT, ITA No.791/Kol/2025, dated 11.11.2025, (ii) Praveen Kumar G. Jain vs. DCIT, ITA No.2731/Chny/2024, dated 03.06.2025 and (iii) PCIT(Central)-3 vs. Krishan Kumar Modi, ITA Nos.48 to 52/Del/2021, dated 22.02.2021. Therefore, we are not in agreement with the order of ld.

ITA No.937/Kol/2026/A.Y. 2021-22 Gaurav Sadhwani vs. DCIT CIT(A) and accordingly, we set-aside the order of ld. CIT(A) on this issue. Ground No.3 is allowed.

ITA No.937/Kol/2026/A.Y. 2021-22 Gaurav Sadhwani vs. DCIT assessment tax was covered under chapter XIV and therefore argued that the adjustment of cash seized during the search is allowed against the self- assessment tax. The ld. AR submitted that the advance tax and the self- assessment tax are dealt with in separate chapters in the Act. The ld. AR submitted that provisions as regards self-assessment tax are contained in chapter XIV u/s 140A of the Act while the provisions regarding payment of advance tax are contained in part 3 of Chapter XVII. Therefore, the ld. AR prayed before the Bench that the ld. AO may be directed to adjust the cash seized against the self-assessment liability. In defense of his argument the ld. AR relied on the decision of Assistant Commissioner of Income-tax vs. Narendra N. Thacker [2017] 82 taxmann.com 64 (Kolkata - Trib.)/[2016] 45 ITR(T) 188 (Kolkata - Trib.)[28-09-2015]. The ld. AR also relied on the decision of Commissioner of Income-tax vs. Ashok Kumar [2011] 334 ITR 355 (Punjab & Haryana) vide order dated 30-09-2010. 15. We find the assessee’s contention to be meritorious and genuine that no interest levied u/s 234B/234C of the Act is leviable to the extent of cash is handed over to the Department on 06.03.2021 which has to be treated as date of payment of tax by the assessee and the same has to be adjusted accordingly. The case of the assessee is squarely covered by the decision of Sanjay Kumar Gupta vs. ACIT (supra), Nitin Kumar vs. ACIT, ITA No. 1457/Kol/2016, dated 04.04.2018 and Gaurav Ajmera vs. DCIT, ITA No. 71/Ind/2022, dated 01.09.2023, in which similar ratio has been decided by the Co-ordinate Benches of various Tribunals. Therefore, respectfully following the same, we direct the AO to adjust the cash received on 06.03.2021 towards payment of self-assessment tax. Ground No.4 is, accordingly, allowed.

ITA No.937/Kol/2026/A.Y. 2021-22 Gaurav Sadhwani vs. DCIT 16. In the result, the appeal of the assessee is allowed.

The order is pronounced in the open Court on 01/09/2026.

Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) JUDICIALMEMBER ACCOUNTANT MEMBER Kolkata, Dated: 01/09/2026 SAMANTA आदेश �ȧ ĤǓ�ͧ �ͪ �\ Ē ȯͪ��/Copy of the Order forwarded to: 1. \ �Ȣ�ȡ�ȸ/ The Appellant 2. Ĥ×��ȸ/ The Respondent 3. Ȳ�Ȳͬ��आयकर] �ǕÈ�/ Concerned CIT 4. आयकर] �ǕÈ�(अपील) / The CIT(A) ��ȡ�Ȣ�ĤǓ�Ǔ�ͬ �, आयकर\ �Ȣ�ȣ�\ͬ ����,/ DR, ITAT, Kolkata 5. 6. �ȡ�[ फाईल/ Guard file

BY ORDER, // TRUE COPY // Deputy Registrar, ITAT, Kolkata