KHUSHAL JAIN,KARNATAKA vs. DCIT, CENTRAL CIRCLE - 2, JODHPUR

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ITA 835/JODH/2025Status: DisposedITAT Jodhpur07 August 2026AY 2018-194 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the employer, M/s Rajlakshmi Industries, had offered this amount as additional income in a settlement application before the Income Tax Settlement Commission, the addition at the hands of the assessee could not survive.

What were the facts?

During a search operation, a diary seized from the assessee showed a receipt of Rs. 25,000/- from M/s Rajlakshmi Industries for expenses. The assessee claimed this amount was for petty expenses incurred on behalf of the employer.

What were the issues?

Whether the addition of Rs. 25,000/- as unexplained cash credit to the assessee's income is valid when the employer has already settled this amount as additional income.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

For Appellant: CA (Virtual)
For Respondent: Ms. Shivani Bansal, CIT-DR (Physical)

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT AND SHRI MAKARAND VASANT MAHADEOKAR, HON’BLE ACCOUNTANT MEMBER

ITA No. 835/Jodh/2025 (Assessment Year – 2018-19) Kushal Jain DCIT, Central Circle – 2 C/o Vinayak Paper Rai ka Bagh Palace, Virupaxeshwar Complex, Jodhpur Gadag-582101 PAN No. ATOPK 0468 P Assessee by Srushti, CA (Virtual) Revenue by Ms. Shivani Bansal, CIT-DR (Physical) Date of Hearing 03 / 08 / 2026. Date of Pronouncement 07 / 08 / 2026.

ORDER Per: Shri Saktijit Dey, V.P.: This is an appeal by the assessee against order dated 30.07.2025 of learned Commissioner of Income Tax (Appeals) [in short ‘CIT(A)], Jaipur-5 for the Assessment Year 2018-19.

2.

The solitary issue arising for consideration relates to addition of an amount of Rs. 25,000/- made by the Assessing Officer and confirmed by learned First Appellate Authority.

2 ITA No. 835/Jodh/2025 Asst. Year: 2018-19 3. Briefly stated, the assessee is a resident individual. A search and seizure operation under section 132 of the Income Tax Act, 1961 (in short ‘the Act’) was carried out in case of Rajlakshmi Group on 19-2-2019 and the assessee was also covered under the said search operation. Based on such search operation, proceedings under section 153A of the Act was initiated in case of the assessee. As observed by the Assessing Officer, in course of search operation, one diary was seized from the residence of the assessee which, as per the statement of the assessee, contained unaccounted expenses. On further analysis of the diary, the Assessing Officer noted that on the credit side of the account, there is receipt entry of Rajlakshmi Industries. When this was confronted to the assessee, he stated that the amounts were taken from M/s Rajlakshmi Industries towards expenses. Whereas, no contra entry was found in the books of M/s Rajlakshmi Industries. Thus, based on the aforesaid facts, the Assessing Officer treated the amount of Rs. 25,000/- as unexplained cash credit under section 68 of the Act and added back at the hands of the assessee. Though, the assessee contested the aforesaid addition before learned First Appellate Authority, however, the addition was confirmed.

3 ITA No. 835/Jodh/2025 Asst. Year: 2018-19 4. We have considered rival submissions and perused the materials on record. It is the say of the assessee before us that in an application filed for settlement before the Interim Board, the employer firm, M/s Rajlakshmi Industries, has offered additional income and the amount of Rs.25,000/- stated to be received by the assessee forms part of the same. Thus, she submitted. it cannot be added again at the hands of the assessee.

5.

Learned Departmental Representative (DR) relied upon the observations of the Departmental Authorities.

6.

Having considered rival submissions and perused the materials on record, we find that based on the entries made in a diary seized from the assessee, the Assessing Officer has made addition of Rs. 25,000/-. However, in the said statement, the assessee had categorically stated that the amount was received from the employer, Rajlakshmi Industries, for incurring petty expenses on behalf of the employer. It is further revealed from the materials on record that the employer, M/s Rajlakshmi Industries, had made an application before Income Tax Settlement Commission, Principal Bench, New Delhi, offering certain additional income. The amount of Rs. 25,000/- forms part of that. The Settlement Commission/ Interim Board has passed an order on the application filed by the

4 ITA No. 835/Jodh/2025 Asst. Year: 2018-19 employer. Thus, the issue relating to addition of Rs.25,000/- stands settled by the virtue of decision of the Interim Board on the application for settlement made by M/s Rajlakshmi Industries. That being the case, the addition made at the hands of the assessee cannot survive. Accordingly, the same is deleted. The appeal is allowed.

7.

In the result, appeal is allowed.

Order Pronounced in the open court on 07/08/2026.

Sd/- Sd/- (Makarand Mahadeokar) (Saktijit Dey) Vice President Accountant Member Dated : 07/08/2026. Aks/- True Copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File

BY ORDER,

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