INCOME TAX OFFICER, WARD-16(3), DELHI, DELHI vs. NISCHINT A KANOUDIA, DELHI

Brief facts of the case are that the assessee is an individual and filed his return of income on 30.07.2022, declaring total income from income of INR 44,23,590/- from salary and capital gain etc. The case

Against the said order, the assessee filed appeal before Ld.CIT(A) who vide impugned order dated 28.08.2025, partly allowed the appeal of the assessee after appreciating the facts and the details filed by the assessee.

Aggrieved by the order of Ld.CIT(A), the Revenue is in appeal before the Tribunal by taking following Grounds of appeal:- 1. “Whether in facts and in law, Ld. CIT(A) erred in deleting the addition of Rs. 15,41,52,000/- made u/s 69 of the Income Tax Act, 1961 merely relying on the submission made by the AO and not calling for remand report from AO on the submissions made by the AO?

Since all the Grounds of appeal with respect to the deletion of addition of INR 15.41 crores made therefore, they are taken for consideration.

Before us, Ld.CIT DR submits that assessee has failed to reconcile the difference between the investment shown in the year and brought forward investment declared in the ITR filed for the subsequent year. Ld.CIT DR further submits that assessee has not explained the source therefore, the AO has rightly made the additions which deserves to be upheld.

Alternatively, Ld.CIT DR supported the orders of the lower authorities and submits that Ld.CIT(A) has deleted the additions by accepting the evidence which are not confronted with the AO therefore, in the larger interest of the justice, the matter may be set aside to the file of AO for fresh consideration.

Per contra, Ld.AR for the assessee vehemently supported the order of Ld.CIT(A) and submits that during the course of assessment proceedings, beginning of the proceedings, assessee has contended that there was an inadvertent error in filing the return of income wherein the figures of the previous year was taken as investment in the year under appeal.

Ld. AR drew our attention to the fact that in subsequent AY 2023-24 in ITR filed, opening balance of investment was shown at INR 18.82 crores thus, it is clear that assessee has not malafide intention in disclosing lesser amount of investment in the year under appeal. With respect to the immediate source of such investment that during the course of assessment proceedings vide letter dated 23.02.2024 which is reproduced at page 7 of the assessment order. The assessee has explained the entire source of investment made which is out of the loans and gifts taken from the family members and the necessary details of the lenders were filed before the AO. Ld.AR submits that AO has not pointed out any defect any details so filed and merely for the reason that assessee has not corrected the error by filing the revised return of income for investment, has made the additions. Ld.AR submits that once the AO has accepted the genuineness of the loans taken and also the necessary re-conciliation was filed, there is no reason to make the addition. He submits that Ld.CIT(A) after considering these facts, has deleted the additions therefore, requested for the confirmation of the order of Ld.CIT(A).

Heard the contentions of both the parties at length and perused the material available on record. In the instant case, the solitary issue of the Revenue is with respect to the deletion of addition of INR 15,41,52,000/- made u/s 69 of the Act on account of investment made by the assessee alleged as unexplained. The AO observed that assessee had declared investment of INR 3.41 crores in the return of income filed as against the actual investment of INR 18.82 crores which was appearing in the return of income filed for subsequent Assessment Years has opening balance. On being asked about the such difference, the assessee vide reply dated 23.02.2024 has made a detailed written submissions explained the facts about the total investment made and sources thereof. The relevant letter is reproduced in para 13 of the assessment order is extracted herein below:-

From the perusal of the above reply filed before the AO, it is observed that the assessee has explained the reasons that erroneously the pre-filled form was taken for filing the return of income due to which the error was occurred in reporting the correct figure of the investment made by the assessee. The assessee further filed the list of investments including the opening balances and the fresh investments were made during the year. In the same letter, the assessee has also stated that all the investments were made through banking channel and the corresponding sources thereof which comprised of gifts from his father, HUF, proceeds from sale of properties, loans taken from family members and the HUF. Further, the assessee has filed the loan confirmations and the bank statements. All these facts were duly submitted before the lower authorities. However, the AO has not pointed out any deficiency in the details so filed. It appears that though the AO has accepted the genuineness and creditworthiness of the loans with respect to the source of investment made however, for the sole reason that the assessee has not filed revised return by replacing the correct amount of investment, has made the addition. Ld.CIT(A) had appreciated these facts and vide para 5(C) of its order, has deleted the additions. The relevant observations of Ld.CIT(A) as contained in para 5(C) is reproduced as under:-

Before us, the Revenue has failed to controvert the findings given by Ld.CIT(A) with respect to the source of investment made by the assessee regarding revenue’s request of setting aside the order. It is observed that no fresh details were filed before Ld.CIT(A) and all the documents based on which Ld.CIT(A) has deleted the additions, were already filed during the course of assessment proceedings.

In view of these facts, we find no error in the order of Ld.CIT(A) who has rightly deleted the additions made without appreciating the facts that assessee has been able to explain the source of the investment and for the sole ground of addition was incorrect reporting of figure of investment in the ITR which was duly reconciled Page | 10

In the result, appeal of the Revenue is dismissed. Order pronounced in the open Court on 25.05.2026.