INCOME TAX OFFICER, WARD-5(1)(2), NOIDA, NOIDA vs. DIWAKAR SHARMA, NOIDA

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ITA 7802/DEL/2025Status: DisposedITAT Delhi22 June 2026AY 2010-116 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order, stating that additions under Section 153A can only be made if based on incriminating material found during search. Since no such material was linked to these specific additions, they were rightly deleted.

What were the facts?

The assessee received unsecured loans and made investments in properties. The Assessing Officer (AO) treated these as unexplained credits and investments, making additions under Sections 68 and 69. The Commissioner of Income Tax (Appeals) deleted these additions.

What were the issues?

Whether additions under Section 153A can be made without incriminating material found during search, and whether the CIT(A) correctly deleted additions for unexplained loans and investments.

Which sections of the Income-tax Act were involved?

Section 68,Section 69,Section 153A,Section 132

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI “E” BENCHES, NEW DELHI

Before: SHRI MAHAVIR SINGH & SHRI MANISH AGARWAL

आयकर अपीलीय अिधकरण, िद�ी पीठ�, नई िद�ी INCOME TAX APPELLATE TRIBUNAL DELHI “E” BENCHES, NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA 7802/DEL/2025 िनधा�रण वष�/Assessment Year: 2010-11) INCOME TAX OFFICER, WARD- DIWAKAR SHARMA 5(1)(2), NOIDA B-402, KARTIK KUNJ, SECTOR- A-2D, INCOME TAX OFFICE, 44, NOIDA Vs. SECTOR-24,NOIDA, NOIDA-201301, NOIDA-201301, UTTAR UTTAR PRADESH PRADESH अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of Assessee: AOHPS3660K

अपीलाथ� �ारा/Appellant represented by: Sh.Raghunath CIT,DR. ��थ� �ारा/Respondent represented by: None

सुनवाई की तारीख / Date of conclusion of hearing: 22-Jun-2026 घोषणा की तारीख / Date of pronouncement: 22-Jun-2026

ORDER PER MANISH AGARWAL, A.M.:

The present appeal is filed by assessee against the order dated 16.09.2025 passed by Ld. Commissioner of Income Tax (A)-3, Noida [“Ld. CIT(A)”] in Appeal No. CIT(Appeals) Kanpur-4/10042/2016-17 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 30.03.2016 passed u/s 143(3) r.w.s. 153A of the Act pertaining to Assessment Year 2010-11.

2.

Brief facts of the case are that the assessee is an individual and filed his return of income on 14.09.2015, declaring total income of INR 31,77,240/- from house property, business and other sources. A search and seizure action was

ITA 7802/DEL/2025 DIWAKAR SHARMA carried out u/s 132 of the Act on 09.10.2013 at the premises of the assessee being a part of Shubhkamna Buildtech Ltd. Group of cases. The AO observed that assessee has received unsecured loans of INR 1,74,65,000/- from various parties however, has failed to file any confirmations etc. therefore, has treated the said loans as unexplained credits and made the addition of the same u/s 68 of the Act. Besides this, addition of INR 89,64,740/- was made on account of investments made in acquisition of two properties u/s 69 of the Act in absence of any explanation with respect to the source thereof. Further, addition of INR 53,50,500/- was made towards alleged entries found noted in the loose papers indicating investment in acquisition of lands.

3.

Against the said order, the assessee filed an appeal before ld. CIT(A) who in terms of the order dated 16.09.2025, has allowed the appeal of the assessee.

4.

Aggrieved by the order of ld. CIT(A), the Revenue is in appeal before the Tribunal by taking following Grounds of appeal :

1.

“That the Ld. CIT(A) erred in law and on facts in deleting the addition of Rs. 1,74,65,000/-made under section 68 towards unexplained unsecured loans and Rs. 89,64,740/- made under section 69 towards unexplained investment, despite the assessee's failure to establish the identity, creditworthiness, and genuineness of the lenders and the source of investment, as mandated under law. 2. That the Ld. CIT(A) erred in holding that no incriminating material was found during the course of search, ignoring the seized documents marked LP-4, LP- 12, and LP-30 which contained clear evidence of unrecorded land transactions amounting to Rs. 53,50,500/-, duly relied upon by the Assessing Officer in the assessment order. 3. That the Id. CIT(A) failed to appreciate that the assessment under section 153A was framed on the basis of incriminating material unearthed during the search, and therefore, the ratio of PCIT v. Abhisar Buildwell Pvt. Ltd. [2023] 150 Taxmann.com 257 (SC) was misapplied, since the said judgment itself permits other additions under section 153A where incriminating material is found. 4. That the order of the Ld. CIT(A) is perverse, contrary to the evidence and material on record, and not sustainable in law, whereas the order passed by the Assessing Officer under section 143(3)/153A is correct and deserves to be restored.

ITA 7802/DEL/2025 DIWAKAR SHARMA 5. That the appellant craves leave to add, alter, modify, or withdraw any of the above grounds at the time of hearing."

5.

None appeared on behalf of the assessee however, ld. CIT DR has made the submissions in respect to the Grounds of appeal taken before us.

6.

Ground of appeal Nos. 1, 3 & 4 raised by the Revenue are with respect to the deletion of addition of INR 1,74,65,000/- made u/s 68 towards unsecured loans treated them as unexplained and further deletion of addition of INR 89,64,740/- made u/s 69 of the Act towards alleged unexplained investment in acquisition of properties by holding that no incriminating material was found/ seized pertaining to these additions and therefore, in terms of judgement of Hon’ble Supreme Court in the case of PCIT vs Abhisar Buildwell Pvt. Ltd. reported in 150 taxmann.com 257 (SC), no addition could be made in the assessment order passed u/s 153A of the Act for the year for which no proceedings were pending when notice u/s 153A was issued.

7.

Ld.CIT DR submits that though there were no material found with respect to these additions however, during the course of assessment proceedings, the assessee has failed to establish the genuineness of the loans taken and also the creditworthiness of the lenders was not established. Likewise, source of acquisition of immovable properties were also not proved. He therefore, submits that the AO has rightly made the addition and requested for the confirmation of the same.

8.

After considering the submission of ld. CIT DR and facts and circumstances of the case, we find that both the additions were made by the AO without referring to any incriminating material found and seized as a result of search carried out at the premises of the assessee. The proceedings in the year under appeal were initiated u/s 153A of the Act as a result of search conducted

ITA 7802/DEL/2025 DIWAKAR SHARMA u/s 132 of the Act on 09.10.2013 when admittedly, no proceedings were pending for the year under appeal i.e. for AY 2010-11 thus, by respectfully following the order of Hon’ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd. (supra) we find no infirmity in the order of ld. CIT(A) in deleting the additions made dehorse the incriminating material. Accordingly, we uphold the order of ld. CIT(A) on this issue. It is worthwhile mentioned that ld. CIT(A) has further relied upon the judgements of Hon’ble Supreme Court in the case of King Buildcon Pvt. Ltd. in Civil Appeal No.4326/2023 and in the case of PCIT vs S.S. Con. Build Ltd. reported in 445 ITR 506(SC), wherein the hon’ble Apex court has re-affirmed the order view taken in the case of Abhisar Buildwell Pvt. Ltd. (supra). It is further observed that ld. CIT(A) has directed the AO to take the remedial measures u/s 148 subject to the limitations therefore, there is no loss to the Revenue in deleting these additions made in the order passed u/s 153A of the Act. Accordingly, Ground of appeal Nos. 1, 3 & 4 raised by the Revenue are dismissed.

9.

Ground of appeal No.2 of the Revenue is with respect to the deletion of addition made on account of alleged unexplained investment in acquisition of lands for which certain noting were found in the loose papers seized during the course of search.

10.

Heard the contention of Ld. CIT DR and perused the material available on record. In this regard ld. CIT(A) has observed that funds for such investments were actually given out of the regular bank accounts maintained by the assessee which were duly recorded in regular books of accounts and were disclosed accounts. Ld.CIT(A) during the appellate proceedings, in terms of letter dated 17.11.2017, has sent the submissions and evidences filed by the assessee to the AO for Remand Report and further asked the AO to provide the copies of the seized material. Thereafter, in terms of mail dated 05.09.2025, AO was further

ITA 7802/DEL/2025 DIWAKAR SHARMA asked to supply of the copies of seized material based on which addition was made and further asked the AO to file the comment on the submissions made by the assessee. However, the AO has neither raised any objections nor filed any report nor has supplied the copies of seized material as asked by ld. CIT(A), therefore, the ld. CIT(A) has decided the issue on the basis of material available on record. Thereafter, ld. CIT(A) observed that additions made on account of the payments found noted in loose papers LP-4 of INR 17,12,000/- and LP-12 of INR 14,45,000/- were made out of the regular bank account which were duly recorded in the books of accounts thus no addition could be made for same in the order passed u/s 153A of the Act. With respect to the addition of INR 12,84,000/- and INR 9,09,500/- towards the entries found noted in material seized marked as Anx. LP-13, it was the claim of the assessee was that these documents were never provided to the assessee. Further as observed above, despite of specific directions by ld. CIT(A), the same were not supplied to ld. CIT(A). Under these circumstances, ld. CIT(A) observed that no addition could be made for the entries allegedly found noted in the said paper when the said papers were not brought on record.

11.

In view of the above discussion, we find no error in the order of ld. CIT(A) who after duly appreciating he facts and by following the judgement of hon’ble Supreme court in the case of Abhisaar Buildwell Pvt. Ltd. (supra) has deleted the additions. Further despite of opportunity provided by ld. CIT(A), the AO has not rebutted the claim of the assessee in the remand report. Therefore, we are not inclined to interfere in the order of ld. CIT(A) which is hereby upheld. Accordingly, Ground of appeal No.2 raised by the Revenue is dismissed.

ITA 7802/DEL/2025 DIWAKAR SHARMA 12. In the result, appeal of the Revenue is dismissed. Order pronounced in the open court on 22.06.2026. Sd/- Sd/-

(MAHAVIR SINGH) (MANISH AGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Date- 24.08.2026 *Amit Kumar, Sr. P.S*

Copy to: INCOME TAX OFFICER, WARD-5(1)(2), NOIDA, 1 A-2D, INCOME TAX OFFICE, SECTOR-24,NOIDA, NOIDA-201301, UTTAR PRADESH DIWAKAR SHARMA, 2 B-402, KARTIK KUNJ, SECTOR-44, NOIDA, NOIDA-201301, UTTAR PRADESH 3 THE PCIT / CIT, 4 THE D.R., ITAT, DELHI BENCH 5 GUARD FILE TRUE COPY

ASSISTANT REGISTRAR / SR. PRIVATE SECRETARY I.T.A.T., DELHI

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