DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-17, DELHI, DELHI vs. ASHWANI KUMAR GUPTA, LUCKNOW

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ITA 4743/DEL/2025Status: DisposedITAT Delhi13 May 2026AY 2017-186 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that for proceedings under Section 153C, incriminating material found during a search must have a bearing on the determination of total income. The Tribunal found that the excel sheet data did not exclusively relate to the assessee and that some transactions pertained to other individuals, making additions unsustainable.

What were the facts?

The assessment was initiated under Section 153C based on data recovered during a search on the Alankit Group, which allegedly revealed parallel ledger accounts maintained in the assessee's name. The Assessing Officer (AO) relied on an excel sheet and a statement to issue notices under Section 153C.

What were the issues?

Whether the material recovered during the search and relied upon for issuing notice under Section 153C had a bearing on the assessee's total income. Whether additions made on account of transactions pertaining to other individuals amounted to economic double taxation.

Which sections of the Income-tax Act were involved?

Section 153C,Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, DELHI

Before: SHRI M BALAGANESH & SHRI ANUBHAV SHARMA

For Appellant: CA Sh. Sundeep Chadha, CA
For Respondent: Shri Kant Namdeo, CIT, DR
Hearing: 06.05.2026Pronounced: 13.05.2026

PER ANUBHAV SHARMA, JM:

These are appeals preferred by the assessee and revenue against the

orders of the Ld. Commissioner of Income-tax (Appeals)-26 (hereinafter

referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in

appeals filed before him against the orders of the ld. Assessing Officer

(hereinafter referred to as the Ld. AO, for short) passed u/s 143(3)/153Cof

the Income-tax Act, 1961 (hereafter referred to as ‘the Act’). Further details

of the orders of the lower authorities are as under:-

ITA No. & Ld. FAA who Appeal No. & Date of order AO who passed the AY passed the appellate of the Ld. FAA assessment order & order Date of order 4014/Del/25 CIT(A)-26, DIN: DCIT, Central 2017-18 New Delhi ITBA/APL/N/250/2025- Circle-15, New Delhi 26/1075485097(1) Dated 31.03.2023 Dated 04.04.2025 4741/D/25 CIT(A)-26, DIN: DCIT, Central 2014-15 New Delhi ITBA/APL/N/250/2025- Circle-15, New Delhi 26/1075484986(1) Dated 31.03.2023 Dated 04.04.2025 4742/D/25 CIT(A)-26, DIN: DCIT, Central 2016-17 New Delhi ITBA/APL/N/250/2025- Circle-15, New Delhi 26/1075478144(1) Dated 31.03.2023 Dated 04.04.2025 4743/D/25 CIT(A)-26, DIN: DCIT, Central 2017-18 New Delhi ITBA/APL/N/250/2025- Circle-15, New Delhi 26/1075485097(1) Dated 31.03.2023 Dated 04.04.2025

P a g e | 3 5 Appeals Ashwani Kumar Gupta 4741 to 4744, 4014/Del/2025 AYs: 2014-15, 2016-17 to 2018-19

4744/D/25 CIT(A)-26, DIN: DCIT, Central 2018-29 New Delhi ITBA/APL/N/250/2025- Circle-15, New Delhi 26/1075477768(1) Dated 31.03.2023 Dated 04.04.2025

2.

These appeals were heard together as they arise out of the same set of

facts and involved similar question of law.

3.

On going through the impugned order of ld. CIT(A) and the

contentions as submitted we find that these appeals arise out assessment

initiated in the case of assessee on the basis of a search and seizure operation

conducted on 18.10.2019 in the case of Alankit Group. During the search

allegedly from an employee of Alok Kumar Aggarwal certain data was

recovered which revealed that parallel ledger account were maintained in the

name of assessee and some other persons. The assessing officer of the

searched person recasted the said ledger accounts and created a combined

ledger account of the assessee from 01.04.2009 to 31.03.2018 in an excel

sheet. The AO relying on these excel sheets data and statement of Sunil

Kumar Gupta the employee of Alok Kumar Aggarwal, recorded a satisfaction

note and based upon which notice were issued to the assessee u/s 153C on

23.06.2022.

P a g e | 4 5 Appeals Ashwani Kumar Gupta 4741 to 4744, 4014/Del/2025 AYs: 2014-15, 2016-17 to 2018-19

4.

We find that ld. CIT(A) has taken into consideration the fact that in

regard to proceedings u/s 153C of the Act, it is necessary that incriminating

material found during the search can be used, provided the incriminating

material would have bearing in determination of total income for such years.

5.

Ld. AR has established before us from material on record and the

factual observations in the impugned order that the excel sheet content does

not relate to assessee but to other persons also and based upon the same

assessee have been benefitted by the held. CIT(A). As for completeness we

reproduced the findings of ld. CIT(A) in the order for AY: 2017-18:

“6.58 In the instant case, as discussed above, the aforesaid transactions do not belong/pertain/relate to the appellant and accordingly, such transactions would not have bearing on the determination of total income for such years as the transactions mentioned in clauses (e) and (f) pertains to Umesh Shukla. Similarly, transaction mentioned in clauses (b) pertains to Mr. Sanjay Agarwal. Further, Umesh Shukla and Mr Sanjay Agarwal are separate and independent taxable entities.

The AO has not disputed these facts in the assessment order. Hence, in view of the extant legal provisions and the decisions of the Apex court in Singhad Technical Education Society (supra), the additions made on account of item nos.mentioned in aforesaid clauses are unsustainable in law as such transactions do not have bearing on determination of income of the appellant and accordingly, such additions are liable to be deleted.

6.59 Moreover, the above entry in clauses (e) and (f) has been identified by the department to be pertaining to Umesh Shukla and accordingly satisfaction for issue of notice u/s 153C was formed. In the assessment proceedings u/s 153C of the Act addition of Rs. 34,00,000/- u/s 69A of the Act on account of cash payments of Rs. 25,00,000/- on

P a g e | 5 5 Appeals Ashwani Kumar Gupta 4741 to 4744, 4014/Del/2025 AYs: 2014-15, 2016-17 to 2018-19 18/03/2017 and Rs. 9,00,000/- on 31/03/2017has been made in his hand. Appellant had submitted a copy of assessment order of Umesh Shukla for the relevant assessment year in support of its claim. Hence, making addition of the same income in the hands of the appellant would tantamount to economic double taxation which is prohibited under the law. Accordingly, the appellant succeeds on this ground.”

6.

Taking into consideration the copy of satisfaction note made available

at page No. 10-15 in the paper book we find that consolidated satisfaction

note was drawn without there being any observation as to how the alleged

incriminating material found during the search has bearing on the income of

the assessee for relevant assessment years from 2010-11 to 2020-21.

7.

In fact, the similar satisfaction note has been subject matter of scrutiny

before Hon’ble Delhi High Court in the case of Saksham Commodities Ltd.

v. ITO (2024) 464 ITR 1 (Delhi) which has also been relied by ld. CIT(A) to

give the aforesaid findings in favour of the assessee.

8.

Thus, we find no substance in the ground of appeal of the revenue and

corresponding ground No. 1 in appeal of the assessee for AY; 2017-18

deserves to be sustained and grounds raised in appeal of department deserve

to be rejected.

P a g e | 6 5 Appeals Ashwani Kumar Gupta 4741 to 4744, 4014/Del/2025 AYs: 2014-15, 2016-17 to 2018-19 9. Consequently, the appeals of revenue are dismissed and of assessee is

allowed.

Order pronounced in the open court on 13.05.2026

Sd/- Sd/- (M Balganesh) (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 13.05.2026 Rohit, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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