DEVENDER KUMA GUPTA,FARIDABAD vs. DCIT, CENTRAL CIRCLE-2, FARIDABAD

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ITA 6132/DEL/2025Status: DisposedITAT Delhi28 August 2026AY 2020-214 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the Section 40A(iii) disallowance was not sustainable as the assessee had not claimed the expenditure. Additions for 'patty' payments were deleted as they pertained to the assessee's company. The addition for unexplained jewellery was reduced to Rs. 1 lakh.

What were the facts?

The assessee's appeals arose from search and seizure operations, leading to assessments under Section 153A. The primary dispute involved disallowances under Section 40A(iii) for alleged cash payments and additions for undisclosed expenditure and unexplained jewellery.

What were the issues?

Whether disallowance under Section 40A(3) is valid without a corresponding expenditure claim, and whether certain payments and jewellery are to be treated as undisclosed income of the assessee.

Which sections of the Income-tax Act were involved?

Section 153A,Section 40A(3),Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI NAVEEN CHANDRA

For Appellant: CA Sh. Airik Singla, Adv
For Respondent: Ms. Kirti Sankartyayan, CIT(DR)
Hearing: 24.08.2026Pronounced: 24.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA Nos. 6128 to 6132/Del/2025 Assessment Years: 2015-16 to 2018-19 & 2020-21 Devender Kumar Gupta, Vs Deputy Commissioner of House No. 1303, Sector-15, Escorts Income Tax Central Circle- Constructions, Haryana-121007 2, CGO Complex, New Industrial Township 4, Faridabad- 121001 Haryana (APPELLANT) (RESPONDENT) PAN No. AGBPG5221A Assessee by: Sh. Vijay Kumar Singla, CA Sh. Airik Singla, Adv. Revenue by : Ms. Kirti Sankartyayan, CIT(DR) Date of Hearing: 24.08.2026 Date of Pronouncement: 24.08.2026 ORDER These assessee's five appeals ITA Nos. 6128 to 6132/Del/2025; for assessment years 2015-16 to 2019-20 & 2020-21, arise against Commissioner of Income Tax (Appeals)-3 (in short, 'CIT(A)'), Gurgaon's orders all dated 25.09.2025, passed in case Nos. 11029/14-15, 11256/15-16, 11740/16-17, 10627/17-18 & 10752/19-20, passed u/s 143(3)/ 153A of the Income Tax Act, 1961; hereinafter referred to as, 'the Act', respectively. Heard both the parties. Case files perused.

2.

It emerges at the outset during the course of hearing with the able assistance coming from both the parties that all these

2 assessee’s appeals emanate from the learned departmental authorities’ section 132(1) search action dated 19.02.2020 carried out in M/s Dev Wines Group etc. There is further no dispute that all this lead to initiation of section 153A proceedings against him finally culminating in the learned Assessing Officer’s as many assessments, all framed on 28.09.2021, as upheld in the CIT(A) lower appellate discussion.

3.

That being the case, we sought to ascertain the issue(s) between the parties. Mr. Singla submits very fairly that the tax payer/appellant is aggrieved against the learned lower authorities’ assessment findings invoking section 40A(iii) disallowance on identical lines; in the former four assessment years i.e. 2015-16 to 2018-19 thereby alleging that he had paid cash to Shri Rajesh Kalra and incurring expenses on the corresponding real estate projects. The Revenue is equally fair in not disputing all these assessment findings in para 5 of the learned Assessing Officer’s assessment order(s).

4.

Faced with this situation, the assessee’s first and foremost argument is that he had not even claimed any such expenditure which could be disallowed u/s 40A(3) of the Act for having paid the same in cash i.e. on account of the violation of the prescribed mode of payment. We do not see any such assessee’s expenditure claim in either of these learned Assessing Officer’s assessment orders. We are of the considered view in this factual

3 backdrop that the impugned section 40A(3) disallowance of alleged cash expenditure made in the assessee’s hands involving varying sums in all these former four assessment years is not sustainable in law which is directed to be deleted for this precise reason i.e., absence of the corresponding expenditure claim(s) therefore. These assessee’s former four appeals ITA Nos. 6128 to 6131/Del/2025 succeed in very terms.

5.

Lastly comes the assessee’s fifth appeal ITA No. 6132/Del/2025. Mr. Singla’s case before us is that the learned Assessing Officer’s assessment order at pages 1 to 3 alleging him to have made “patty” payments on 39 occasions totaling to Rs. 3,17,427/- which have been treated as undisclosed expenditure u/s 69 of the Act. We find herein again that all these are the expenses of the assessee’s company M/s Pivotal Private Limited wherein he is the director than in the former’s hands having executed the corresponding projects. This is further not the Revenue’s case that the assessee has booked income or declared the said projects in his name all along as well. We thus find no merit in the impugned addition of Rs. 3,17,427/- which is directed to be deleted in very terms.

6.

Our attention is next invited to the assessee’s latter substantive ground in the impugned last assessment year2020- 21 directed against the learned lower authorities’ action treating the jewellery amounting to Rs. 7,73,495/- as unexplained. We make it clear that there is no indication in both the assessments

4 as well as lower appellate discussion that the learned lower authorities have considered both his socio-economic as well as accumulated past savings; as the case may be. We thus deem it appropriate that a lumpsump addition of Rs. 1 lakh only in the assessee’s hands would be just and proper with a rider that the same shall not be treated as precedent. The assessee gets relief of Rs. 6,73,495/- in very terms. Necessary computation shall follow as per law. No other ground or argument has been pressed before us.

7.

The assessee’s instant former four appeals ITA No. 6128 to 6131/Del/2025 are allowed and his last case ITA No. 6132/Del/2025 is partly allowed; in above terms. A copy of this common order be placed in the respective case files.

Order Pronounced in the Open Court on 24.08.2026.

Sd/- Sd/- (NAVEEN CHANDRA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 28.08.2026 *Pooja Mittal, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR

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