NAVEEN DUTT SHARMA,DELHI vs. INCOME TAX OFFICER WARD 51(1), DELHI

1 ITA No. 3270/Del/2026 Naveen Dutt Sharma Vs. ITO

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI BEFORE MS MADHUMITA ROY, JUDICIAL MEMBER ITA No. 3270/Del/2026 (A.Y 2017-18) Naveen Dutt Sharma Vs. Income Tax Officer, 6132/5, Dev Nagar, Karol Ward-51(1), Delhi Bagh, Delhi (Appellant) (Respondent) PAN: AQKPS0632G Assessee by : Sh. Rajendra Arora, CA & Sh. Yogesh Harjai, CA Revenue by: Shri Manoj Kumar, Sr. DR Date of Hearing 14/05/2026 Date of pronouncement 12/08/2026

O R D E R PER MADHUMITA ROY, J M.: The instant appeal filed by the assessee is directed against the

order dated 02.01.2026 passed by the Ld. Commissioner of Income-

tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter

referred to as the Ld. CIT(A)/NFAC] under Section 250 of the Income

Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of the

Assessment Order dated 11.05.2023 passed by the Assessment Unit,

Income-tax Department under Section 147 read with Section 144B of

the Act for Assessment Year 2017-18.

culminating in addition of Rs. 17,98,000/- on account of cash deposit

made during demonization period is the subject matter before us.

2 ITA No. 3270/Del/2026 Naveen Dutt Sharma Vs. ITO

response whereto to the Assessee filed its ITR on 05.09.2022 declaring

the return of income filed already under Section 139(1) of the Act.

Notice under Section 143 (2) followed by notices under Section 142(1)

were issued. In-fact on the basis of an information received from ITO-

Ward 51(2), New Delhi, that cash was deposited to the tune of Rs.

17,98,000/- by the Assessee in the bank account being No.

34142138173 maintained with the State Bank of India during the

period of demonetization the case of the Assessee was reopened.

the Assessee made by the Ld. A.O. and the reopening was merely on

the basis of information received as above the Assessee, therefore,

joins issue to this effect that this is nothing but borrowed satisfaction

and total non-application of mind. Merely cash deposit in the bank

account does not necessarily make it escapement income without

actually providing any nexus between cash deposit and the income

deemed to have been escaped as also the case made out by the

Assessee. In this regard, he has relied upon the Judgment passed by

the Hon’ble High Court of Delhi in the case of Bir Bahadur Singh

Sijwali Vs. ITO which emphasises recording of reasons must prima

facie indicate escapement of income and not merely a possibility of

detention upon investigation. Such ratio laid down by the Hon’ble

3 ITA No. 3270/Del/2026 Naveen Dutt Sharma Vs. ITO

High Court appears to be applicable here. Furthermore, it appears

from the records that the Assessee deposited aggregate cash of Rs. 66,

53,000/-in the previous year whereas this cash deposit of Rs.

17,98,000/- made during demonetizationperiod selectively has been

treated as unexplainedwithout any cogent reason thereto.

the basis of the reopening of assessment by the Ld. A.O. is found to

be on borrowed satisfaction and therefore, is bad in law, void-ab-initio

and thus, quashed. Consequentially, the order impugned of addition

in the hands of the Assessee is also hereby deleted.

Order pronounced in the open court on 12/08/2026. Sd/- (MADHUMITA ROY) JUDICIAL MEMBER Dated: 12/08/2026 R. Naheed, Sr PS

4 ITA No. 3270/Del/2026 Naveen Dutt Sharma Vs. ITO