ANKIT GUPTA,DEHRADUN vs. DEPUTY COMMISSIONER OF INCOME TAX-CENTRAL CIRCLE, DEHRADUN, DEHRADUN

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ITA 290/DDN/2026Status: DisposedITAT Dehradun28 July 2026AY 2020-217 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The tribunal held that the additions were made based on a 'dumb document' (loose sheet of paper) seized from a third party, without independent verification or opportunity for cross-examination. The tribunal followed its own co-ordinate bench decisions which had deleted similar additions on identical facts.

What were the facts?

The AO made an addition of Rs. 3,33,333/- to each assessee's income under Section 69B read with Section 115BBE, alleging unexplained cash investment in an immovable property. This was based on documents seized from a third party, without providing the assessees an opportunity for cross-examination.

What were the issues?

Whether additions can be made based on documents seized from a third party without providing an opportunity for cross-examination and independent verification. Whether a 'loose sheet of paper' without corroboration constitutes valid evidence for making additions.

Which sections of the Income-tax Act were involved?

Section 69B,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DEHRADUN CIRCUIT BENCH: DEHRADUN

For Appellant: Shri Saurabh Gupta, CA
For Respondent: Shri Mohan Lal Joshi, Sr. DR
Hearing: 21/07/2026Pronounced: 21/07/2026

IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN CIRCUIT BENCH: DEHRADUN BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA No.290/DDN/2026 (ASSESSMENT YEAR: 2020-21) Ankit Gupta, DCIT, Anand Vihar Kaulagarh Road, Central Circle, Dehradun, Uttarakhand-248001. Vs. Dehradun. PAN-APQPG8512A (Appellant) (Respondent) ITA No.289/DDN/2026 (ASSESSMENT YEAR: 2020-21) Damanpreet SinghChandok, DCIT, 325/6 Gurunanak Enclave Race Central Circle, Course, Dehradun, Vs. Dehradun. Uttarakhand-248001 PAN-BTXPS2428F (Appellant) (Respondent) ITA No.292/DDN/2026 (ASSESSMENT YEAR: 2020-21) Vandeep Singh Ratra, DCIT, Patel Nagar, Central Circle, Dehradun-248001. Vs. Dehradun. PAN-AMFPR2375G (Appellant) (Respondent) Assessee by Shri Saurabh Gupta, CA Department by Shri Mohan Lal Joshi, Sr. DR Date of Hearing 21/07/2026 Date of Pronouncement 21/07/2026

2 ITA Nos.290,289 & 292/DDN/2026

O R D ER PER SANJAY AWASTHI, AM: 1. This is a batch of three appeals which are as under: (i) ITA No.290/DDN/2026, Amit Gupta- This appeal arises from the order dated 01.04.2026 passed u/s 250 of the Income Tax Act, 1961 (hereinafter as “the Act”), by CIT(Appeals)-3, NOIDA. (ii) ITA No.289/DDN/2026, Damanpreet Singh Chandok- This appeal arises from the order dated 01.04.2026 passed u/s 250 of the Act, by CIT(Appeals)-3, NOIDA. (iii) ITA No.292/DDN/2026, Vandeep Singh Ratra- This appeal arises from the order dated 01.04.2026 passed u/s 250 of the Act, by CIT(Appeals)-3, NOIDA. These three matters are interconnected and are thus being disposed of through a single order. 1.1. The brief facts may be captured for appreciation of the issues from the lead case being ITA No.290/DDN/2026 (Amit Gupta vs. DCIT) for AY 2020-21.

1.2 In this case, an addition of Rs.3,33,333/- has been made u/s 69B r.w.s 115BBE of the Act on the allegation that the assessee has made unexplained cash investment towards purchase of immovable property. The reassessment proceedings were initiated on the basis of certain documents found during the course of search and seizure action on 02.02.2022 in the case of Shri Krishna Sharma and Smt. Sheetal Sharma. It appears that based on certain documents seized from the searched person an inference was drawn that the assessee, along with two other co-owners being Damanpreet Singh Chandok and Vandeep Singh Ratra, had paid in cash

3 ITA Nos.290,289 & 292/DDN/2026

Rs.10,00,000/- for the said property. The assessee denied any payment over and above the sale consideration of Rs.27,00,000/-. The assessee also requested the Ld. AO to provide an opportunity to cross examine the witness on the basis of whom the said amount was being considered as unexplained, having been paid in cash. However, the Ld. AO treated 1/3rd of Rs.10,00,000/- as unexplained investment u/s 69B of the Act in the case of each of the three assessees.

1.3 Aggrieved the assessees approached the CIT(A) where also they could not succeed and the Ld. CIT(A) affirmed the action of the Ld. AO.

1.4 Further aggrieved the assessees have approached the ITAT, with grounds challenging this action of Ld. AO/CIT(A) before us. The Ld. AR argued that the document relied on by the AO were seized during the course of search conduced on 02.02.2022 in the cases of Shri Krishna Sharma and Smt. Sheetal Sharma. It was the submission that the assessees were not confronted with the allegedly incriminating material obtained from 3rd party sources. It was averred that the Ld. AO has acted unjustly and has adopted the material recovered from 3rd party on its face value, without any independent verification of fact. It was stated that the said loose sheet of paper has already been examined and found unfit for any addition in various other cases as under: S. No. Case Citation Date of Judgment 1 Sudha Aswal Vs DCIT ITA No.21/DDN/2026 12 March 2026 2 Swati Sharma Vs DCIT ITA No.39/DDN/2026 08 April 2026 3 Renuka Grover Vs DCIT ITA No.114/DDN/2026 08 April 2026 4 Kanchan Verma Vs DCIT ITA No.210/DDN/2025 23 December 2025 5 Gaurav Gupta Vs. DCIT ITA No.132/DDN/2025 18 February 2026 6 Bhagwani Devi Vs. DCIT ITA No.31/DDN/2025 22 August 2025

4 ITA Nos.290,289 & 292/DDN/2026

1.5 It was pointed out that in connected cases as mentioned above, the Co-ordinate Benches of ITAT have clearly given a finding that the loose sheet of paper which have also been utilized in the case of three assessees under consideration, was not valid evidence against any of the assessees against whom proceedings have been initiated on the basis of such document. The Ld. AR placed on record the orders of ITAT in these cases and specifically pointed out the case of Sudha Aswal (ITA No.21/DDN/2026 order dated 12.03.2026) and the case of Swati Sharma (ITA No.39/DDN/2026 order dated 08.04.2026) to canvass the point that the impugned loose sheet was not a valid evidence for making any additions. The Ld. AR pointed out para 9 of the Sudha Aswal case (supra) as under: “9. As observed earlier, the seized document has no mention of the payment of cash and there is no corroborative statement recorded from the seized person i.e. Shri Krishna Sharma. The assessment order came to be passed without providing opportunity of cross examination of the said Shir Krishna Sharma, which is contrary to the ratio laid down by the Hon’ble Supreme Court in the case of Andaman Timber Industries (supra). Thus, the Ld. CIT(A) has committed error in upholding the impugned addition. In view of the above, we find no reason to upheld the addition sustained by the Ld. CIT(A), finding merits in Ground of appeal Nos.3 &5 of the Assessee, we allow the same.” 1.6 The Ld. AR further took us through the various relevant portions of the order in the case of Swati Sharma (supra) as under: “7. The Co-ordinate Bench of the Tribunal in the case of Shri Gaurav Gupta in ITA No.31/DDN/2025 has deleted the additions made by placing reliance on the same documents by making following observations:- 5. “The Ld. Counsel for the Assessee addressing on Ground No. 3 and Ground No. 5 submitted that the authorities below committed error in making/sustaining the addition amounting to Rs. 19,00,000/- u/s 69B of the Act relying on the loose sheet of paper which is nothing but ‘dumb document’. Further submitted that there is no mentioning of ‘cash’ payment and the alleged incriminating material being a ‘dumb document’ which was not corroborated with any of the statement or evidence. Further submitted that though the loose paper was not found from the possession of the Assessee, the Revenue has not provided opportunity for cross-examination. Therefore, submitted that the addition made by the A.O. which has been upheld by the Ld. CIT(A) is liable to be deleted.”

5 ITA Nos.290,289 & 292/DDN/2026

8.

It is further observed that addition on identical facts on the basis of entry in the same document was also made in the case of Bhagwani Devi vs DCIT where the Co-ordinate Bench of Dehradun Tribunal in ITA No.31/DDN/2025 vide order dated 22.08.2025 has deleted the addition by making following observations in para 8 to 10 of the order: 8. “From the plain reading of the above seized document it was found that there is no mentioning of the word ‘cash’. Admittedly the documents, have been seized from the third party, however, the Assessee has not been provided with opportunity of cross examination. The Assessee has specifically raised a Ground before the Ld. CIT(A) regarding violation of principals of natural justice on the ground that the Assessee has not been given opportunity of cross examination of the said Krishna Sharma. However, the Ld. CIT(A) held that the opportunity of cross examination is not a compulsory requirement before deciding the matter. 9. The Hon'ble Supreme Court in the case of Andaman Timber Industries Vs. Commissioner of Central Excise(2015) 62 Taxmann.com (S.C) held as under:- “not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination.

6 ITA Nos.290,289 & 292/DDN/2026

Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above.” 10. As observed earlier, the seized document has no mention of the payment of cash and there is no corroborative statement recorded from the seized person i.e. Krishna Sharma. The assessment order came to be passed without providing opportunity of cross examination of the said Krishna Sharma, which is contrary to the ratio laid down by the Hon'ble Supreme Court in the case of Andaman Timber Industries (supra). Thus, the Ld. CIT(A) has committed error in upholding the impugned addition. In view of the above, we find no reason to upheld the addition sustained by the Ld. CIT(A), finding merits in the Ground No. 3 & 5 of the Assessee, we allow the same.” 9. As the facts are identical therefore, by respectfully following the aforesaid judgments of Co-ordinate Bench of Dehradun Tribunal where addition was made by placing reliance on the entries found noted on the same document which is also the sole basis for making the addition in the hands of the assessee, the addition made in the case of assessee is hereby, deleted. The ground of appeal No. 5 taken by the assessee is allowed. 10. Since we have allowed the appeal of the assessee by allowing ground of appeal No. 5 of the assessee, the remaining grounds of appeal become academic.”

2.

The Ld. DR, on the other hand, supported the orders of authorities below and stated that the presumption was against these assessees since the loose sheets of paper indicated the transactions in cash and the AO had rightly made the additions.

3.

We have carefully considered the rival submissions and gone through the records before us. We have also perused the Co-ordinate Bench orders relied on by the Ld. AR. We find that this issue is squarely covered in favour of the assessees on the ground that the loose sheets of paper on the basis of which the main additions have been made, have been factually examined by Co-ordinate Benchless of ITAT and the conclusion has been drawn that no addition is possible on the basis of such documents. Respectfully following the findings in the Co-ordinate Bench orders relied on by the Ld. AR, it deserves to be held that no addition is possible on the basis of the loose sheets indicating an alleged payment in cash amounting to

7 ITA Nos.290,289 & 292/DDN/2026

Rs.10,00,000/-, which has been apportioned equally in the hands of the three assessees. 4. In result, all these three appeals filed by the assessees are allowed. Order pronounced in the Open Court on 21/07/2027.

Sd/- Sd/- (MAHAVIR SINGH) (SANJAY AWASTHI) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 28/07/2026 *PK, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI (Dehradun Circuit Bench, Dehradun)

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