DCIT, CENTRAL CIRCLE 1, NEW DELHI, NEW DELHI vs. RAKESH AGGARWAL, DELHI

PER ANUBHAV SHARMA, JM:

These cross appeals preferred by the Assessee and the revenue against

the common order of the Ld. Commissioner of Income-tax-23, Delhi

(hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for

short) in appeals filed before him against the order of the ld. Assessing

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

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 of AO who passed the &AY passed the appellate the Ld. FAA assessment order & order Date of order 4353/D/25 CIT(A)-23, Delhi DIN & Order No. ACIT, CC-1, Delhi 2021-22 ITBA/APL/S/250/2025- Dated 31.03.2023 26/1076596803(1) Dated 31.05.2025 5367/Del/ CIT(A)-23, Delhi DIN & Order No. ACIT, CC-1, Delhi 25 ITBA/APL/S/250/2025- Dated 31.03.2023 2021-22 26/1076596803(1) Dated 31.05.2025

Group on 17.03.2021 and the residential premises of the appellant was also

P a g e | 3 4353 & 5367/Del/2025 Rakesh Aggarwal (AY: 2021-22) covered u/s 132 of the Act. The return of the assessee was filed on

30.03.2022 on income of Rs.1,37,84,080/- and subsequently assessment order

u/s 143(3) of the Act has been passed on 31.03.2023 assessing total income

of the assessee at Rs.6,34,84,080/- wherein addition of Rs.3,17,00,000/- has

been made on account of alleged bonus and interest income u/s 69A of the

Act and an addition of Rs.1,80,00,000/- u/s 69A on account of unexplained

money.

the Act is that during the search sheet named “Aexited” was seized as page

14 of Annexure A-1 from the residence of assessee and this sheet allegedly

had noting of a working of interest received from different entities of Dalmia

Group. Another sheet named “B. Exited & Remitted Offshore” was seized as

page 13 of the Annexure A1.Allegedly, the assessing officer concluded that

this sheet contains details of investment in entities arranged by Shri Rakesh

Aggarwal for the clients of Dalmia family, hence, he was to receive

commission/bonus on these transactions. Allegedly, the rates of commissions

were confirmed by Rakesh Aggarwal in his statement u/s 132 of the Act.

P a g e | 4 4353 & 5367/Del/2025 Rakesh Aggarwal (AY: 2021-22) Assessing Officer concluded that Shri Rakesh Aggarwal was receiving bonus

apart from salary which remained unaccounted as per ITR filed.

3.1 Assessee submitted that these workings are merely some sort of

calculations done by the assessee where assessee would extrapolate as to

what could be his earnings in certain scenario and there was no inflow of

funds on that count. He submitted that he had left Dalmia trust in December,

2020 and had prepared sheets in November, 2020 in anticipation of

separation from the organization, what would be his financial affairs.As far as

statement recorded u/s 132(4) was concerned he stated that same was

retracted and an affidavit for the same has been submitted earlier.

3.2 However, assessing officer was not satisfied and with the following

findings had made addition:

“The reply of the Assessee has been perused and is not found acceptable because the sheet is very clear that Rs 3.17 crore bonus/commission is due to him from his employer. In case of salaried employee, the act is very clear and salary and it's components are taxable on due basis. The employee-employer relationship between Assessee and Dalmia group is not in doubt. Hence the assertion by assessee that it was just wishful thinking is nothing but an afterthought

P a g e | 5 4353 & 5367/Del/2025 Rakesh Aggarwal (AY: 2021-22) and needs to be rejected. Accordingly, the amount of Rs 3.17 crore is added to the income of Assessee on this count.” 3.3 The same has been deleted by ld. CIT(A) by following findings; “6.1 The appellant was thinking to resign from his job with his employer Dalmia Family Office Trust, he made a working on his own, as to how much amount would become due to him on conclusion of the on-going deals and arrived at the figure of Rs.3, 17,00,000/-. It is seen that even according to the AO, the amount of Rs. 3,17,00,000/- was not received by the appellant in the year under consideration. Therefore, the only aspect which remained to be examined is as to whether the amount of Rs. 3,17,00,000/- becomes taxable in the hands of the appellant on due basis for the year under consideration. Undoubtedly the appellant was an employee of Dalmia Family Office Trust, from where he resigned in the month of December 2020 which happened prior to search & seizure action carried out u/s 132. Moreover, the AO did not record a finding that the employer Dalmia Family Office Trust claimed to have paid the amount of Rs. 3,17,00,000/- to the appellant or made a provision for such expense of Rs.3,17,00,000/- in its books of account. 6.2 l am of the considered view that in the given circumstances when

the amount of Rs.3,17,00,000/- was neither received by the appellant

nor accrued to the appellant, the addition in the hands of the appellant

P a g e | 6 4353 & 5367/Del/2025 Rakesh Aggarwal (AY: 2021-22) is not justified at all. Therefore, I delete the addition of Rs.

3,17,00,000/-.

found that cash amounting to Rs.1,82,01,300/- was found at the residence of

assessee out of which Rs.1,80,00,000/- was found unexplained in his

statement.

4.1 However, later on assessee submitted that by virtue of his knowledge of

real estate sector certain persons approach him to help identify aggregate

respective pieces of land and to negotiate on their behalf and he had received

Rs.85,00,000/- as money from 3 persons whose name have been disclosed as

Tansir Ahmed who had given Rs.30,00,000/-; Mushir Ahmed who had given

Rs.25,00,000/- and Saghir Ahmed who had given Rs.30,00,000/-.

4.2 He also claimed that post retirement assessee has started business of

trading in agriculture produce and assessee used to contract with farmers for

purchase of agriculture produce and use to sell them to various dealers and

amount of Rs.45,50,000/- was received from sale proceeds to sell agriculture

produce and out of which Rs.18,00,000/- was assessee’s profit and remaining

P a g e | 7 4353 & 5367/Del/2025 Rakesh Aggarwal (AY: 2021-22) Rs.24,50,000/- was to be paid to farmers from whom agriculture produce

were purchased.

4.3 He also explained that assessee’s daughter Smt. Vrinda Garg got

married on 01.02.2017 and certain customary gifts aggregating to

Rs.20,00,000/- were received at the time of her marriage and out of

Rs.12,50,000/- remained after meeting expenses on the occasion and the

same was left by his daughter with the assessee and his wife for safe custody.

Assessee also claimed that the grand daughter was born in November, 2018

and her customary cash gifts of Rs.2,50,000/- received at the time of birth

and subsequent ceremonies were left with the assessee and his wife.

Remaining Rs. 39,51,300/- were claimed to be accumulated over a period of

time by the assessee and his other family members.

4.4 The Assessing Officer was not satisfied with the explanation and made

addition of Rs.1,80,00,000/-. The same has been partially sustained by the ld.

CIT(A) by following findings in para 7 and its sub-grounds:

“7. Vide Modified Ground No. 3, the Appellant challenged the addition of Rs.1,80,00,000/- which was made u/s 69A. During search & seizure action u/s 132 conducted on the assessee, cash of Rs.1,82,01,300/- was found lying at his home. Out of total cash of Rs.1,82,01,300/-, cash of Rs.1,80,00,000/- was seized. I observed that the appellant could not explain the sources of the cash found during the search & seizure action u/s 132 of the Act, which is evident from the statement

P a g e | 8 4353 & 5367/Del/2025 Rakesh Aggarwal (AY: 2021-22)

recorded u/s 132(4) during search action. However, during the assessment proceedings, the appellant stated that Rs. 85,00,000/- represented the cash left with him by three brothers-Tansir Ahmed, Mushir Ahmed, Saghir Ahmed towards purchasing of agricultural land, Rs.42,50,000/- represented the cash sale proceeds of agricultural produce belonging to farmers, Rs.15,00,000/-represented the cash savings of his daughter/Vrinda (married), and Rs.39,51,300/-represented the cash savings of his family. 7.1 During assessment proceedings, confirmations with supporting papers like revenue records from three brothers regarding cash of Rs.85,00,000/- were filed. During appeal proceedings, the appellant filed the confirmations with supporting papers like revenue records from three brothers regarding cash of Rs.85,00,000/-. 7.2 The appellant also stated that during assessment proceedings the AO made direct inquiries from Tansir Ahmed, Mushir Ahmed, Saghir Ahmed by issuing notices and calling for documents. To support his contention, copies of notices u/s 133(6) of the Act and the replies filed by Tansir Ahmed, Mushir Ahmed, Saghir Ahmed (with their portal generated acknowledgements) were filed before me. I am not inclined to give relief of such amount of Rs. 85,00,000/-as the availability of such cash in the hands of three brothers remained unproved. Moreover, during the course of search statement u/s 132(4) the appellant didn't. give any justification, therefore this is nothing but an afterthought. 7.3 As far as claim regarding cash of Rs.42,50,000/- is concerned, relief of Rs. 18,00,000/- cannot be denied as such income was declared by the appellant in his ITR for AY 2021-22 u/s 44 AD. 7.4 No evidence /papers regarding the balance remaining cash were filed during assessment proceedings. However, considering the fact that the son and wife of appellant are also income tax filers and appellant is a senior citizen and tax filers for more than 35 years, a lump-sum relief of Rs.5,00,000/- on account of accumulated cash savings in the hands of the family members, out of the remaining addition of Rs. 1,62,00,000/-, will meet the'ends of justice'. In total the appellant will get a relief of Rs. 23,00,000/- for the reasons as mentioned above. The ground no. 3 is partly allowed.”

respective grounds which are reproduced below:

ITA No.4353/Del/2025 (Assessee’s Grounds)

P a g e | 9 4353 & 5367/Del/2025 Rakesh Aggarwal (AY: 2021-22)

“1. On the peculiar facts of the case and in law, the addition sustained by the learned CIT(A) to the extent of Rs.15700000/- (out of the addition made by the learned AO at Rs.18000000/-u/s 69A) is liable to be deleted.

ITA No.5367/Del/2025 (Department’s Grounds)

“1. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.3,17,00,000/- made by the Assessing Officer on account of bonus/commission receivable, ignoring the incriminating documents seized during the search and the assessee's own sworn statement u/s 132(4) confirming the commission rates and transactions.

P a g e | 10 4353 & 5367/Del/2025 Rakesh Aggarwal (AY: 2021-22)

material on record, with regard to the appeal of department arising out of

deletion of the addition of Rs.3,17,00,000/- made by the Assessing Officer on

account of bonus/commission receivable, allegedly ignoring the

incriminating documents seized during the search and the assessee's own

sworn statement u/s 132(4) confirming the commission rates and

transactions, we find that it is crystal clear that even according to the learned

AO, the assessee had not received the amount of Rs.3.17 Crores and also that

the learned AO had treated Rs.3.17 Crores as the assessee income on due

basis from his employer. It is an uncontroverted fact that the assessee was an

P a g e | 11 4353 & 5367/Del/2025 Rakesh Aggarwal (AY: 2021-22) employee of 'Dalmia Family Office Trust’ and not of the Dalmia group as a

whole. Treating the assessee an employee of all the entities working under

Dalmia Group, is too far stretch, an assertion to draw a conclusion that

assessee was working for the group as a whole and thus would have received

this amount of Rs. 3.17 crores, on account of his services to the Group.

order that the assessee's employer, had booked the expense of Rs.

31,700000/- while either making such payment to the assessee or making

provision in their books of account. It is an undisputed fact that neither any

document showing payment of Rs.3.17 Crores by to the assessee nor any

document showing receipt of Rs.3.17 Crores by the assessee from 'Dalmia

Family Office Trust’ was seized. It is also an undisputed fact that even during

the course of assessment proceedings, no such document had been brought on

record by learned AO. We find substance in the contention of ld. AR that

since there is no evidence or assertion that assessee had acquired any legal

right to receive the said amount of Rs.3.17 Crores and the assessee could

have claimed the said amount of Rs.3.17 Crores, at any time thereafter, the

addition is not of any real income. Ld. CIT(A) has rightly deleted the same

P a g e | 12 4353 & 5367/Del/2025 Rakesh Aggarwal (AY: 2021-22) and the reasoned findings, need no interference.The corresponding grounds

raised by department stand rejected.

Nos. 3 & 4 of the appeal of the department, we find that assessee on his part

has placed some vital evidences from page No. 49 to 82 of the paper book

with regard to 3 persons namely Mushir Ahmad, Sagir Ahmed and Tahir

Ahmed wherein copy of agreement or confirmation have been filed by which

these persons have acknowledged the fact that they had handed over cash

amounts to the assessee with a mandate to the assessee to purchase land and

to enter agreement on behalf of these persons. Revenue record entries of

these persons are placed to show their large landholding and earning

agricultural income out of the produce. Then in response to the notice u/s

133(6) of the Act these persons had responded to the assessing officer

wherein they admitted of the transaction of handing over cash to assessee

with a mandate and that out of agricultural activities of big landholding they

had earned agricultural income from commercial crops like sugar.

assessing officer without pointing out any infirmities in the evidences or

P a g e | 13 4353 & 5367/Del/2025 Rakesh Aggarwal (AY: 2021-22) countering the evidences by any circumstances to show that these evidences

are fabricated or are not reliable for any cogent reason but merely asserting it

to be an afterthought story. We are of considered view that when assessing

officer issued notice u/s 133(6) of the Act exercising the powers calling for

verification of evidence and claim of assessee which is duly responded by the

witnesses then just by alleging the claim to be an afterthought the same

cannot be rejected. Rather it appears this attempted to verify the evidence of

the assessee on the part of assessing officer was itself half hearted as notice

u/s 133(6) were issued on 27.03.2023 and on 29.03.2023 the response was

filed by the said persons and on 31.03.2023 the impugned assessment order

was passed thereby indicating that assessing officer had merely gone ahead to

complete formality without intending to consider the explanation offered by

the assessee.

explanation did not come from assessee while recording statement u/s 132(4)

of the Act. On going through the statement available in the assessment order

itself, we are of the considered view that when assessee was questioned u/s

134(2) he had merely narrated that he cannot explain the source of cash at

P a g e | 14 4353 & 5367/Del/2025 Rakesh Aggarwal (AY: 2021-22) this stage and that he will provide the explanation after checking his book and

bank statement and other financials later on. Thus, to brush aside the

explanation as afterthought without rebutting the evidence of the assessee

was not justified on the part of ld. tax authorities below and thus, to the extent

of denial of benefit to the assessee for explanation of Rs.85,00,000/- falling in

ground No. 2 & 3 of the appeal of the assessee, we are inclined to sustain

ground.

grounds of department are concerned, we are of the considered view that

though a prudent and liberal approach is required to be adopted to consider an

explanation given by assessee but same should be well found on some

preponderance of probability. Mere bald assertions by assessee of source of

cash found with him without any proof of corresponding events or

corroborative evidences cannot be accepted. The ld. CIT(A) has thus being

fair to give assessee benefit with regard to cash of Rs. 18,00,000/- for which

assessee had declared the income in his ITR and ld. CIT(A) has been

reasonable to give a lumpsum relief of Rs.5,00,000/- on account of

accumulated cash savings in the hands of family members, thus, these relief

P a g e | 15 4353 & 5367/Del/2025 Rakesh Aggarwal (AY: 2021-22) of Rs.23,00,000/- given by the ld. CIT(A) requires no interference. However,

what is confirmed by ld. CIT(A) except Rs.85,00,000/- requires no

interference.

Consequently, the appeal of department is dismissed and that of 12. assessee is partly allowed. The addition of Rs. 85,00,000/- shall stand

deleted.

Order pronounced in the open court on 08.05.2026

Sd/- Sd/- (Manish Agarwal) (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 08.05.2026 Rohit, Sr. PS