ARUSH GUPTA,DELHI vs. ITO WARD 29(1), DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI Before Sh. Raj Kumar Chauhan, Judicial Member & Sh. Brajesh Kumar Singh, Accountant Member ITA No. 5177/Del/2025 :Asstt. Year: 2022-23 Arush Gupta, Vs Income Tax Officer, 1st Floor, 35A, 77 West Punjabi Bagh, Ward-29(1), Shivaji Park, Ashoka Park, Extn. S.O. New Delhi-110002 New Delhi-110026 (APPELLANT) (RESPONDENT) PAN No. BDHPG3102N Assessee by: Sh. S. S. Nagar, CA Revenue by : Ms. Ankush Kalra, Sr. DR Date of Hearing: 23.03.2026 Date of Pronouncement: 16.06.2026 ORDER Per Raj Kumar Chauhan, Judicial Member: The appeal of the assessee is directed against the order dated 25.06.2025 of ld. CIT(A)/NFAC, Delhi passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) wherein the addition made in assessment order dated 16.03.2024 was confirmed and the appeal was dismissed.

2 ITA No. 5177/Del/2025 Arush Gupta computing total income at Rs.1,09,61,530/-. The return was duly accepted vide intimation u/s 143(1) dated 02.12.2022. The case of the assessee was selected for scrutiny assessment vide notice u/s 142(1) dated 02.06.2023. In pursuance of complete scrutiny assessment proceedings, a notice u/s 142(1) of the Act was issued followed by show-cause notice dated 25.01.2024 proposing various additions which was replied vide letter dated 01.02.2024. Final Assessment order was passed on 16.03.2024 making addition of Rs. 2,41,750/- on account of difference in GST return. It was observed by the AO that, on perusal of the GSTR, it was noticed that total sales done amounted to Rs.45,40,750/- but on perusal of the ITR, it is noticed that the assessee has admitted 50% of section 194JB receipts of Rs.39,60,000/- as per 26AS which amounts to Rs.19,80,000/- u/s 44ADA. It was further observed that when Rs.45,40,750/- is taken as turnover, Rs.22,70,375/- i.e. 50% of the sales as per GST of Rs.45,40,750/- would be the professional income. Hence, the difference of Rs.2,90,375/- was determined to be added to the total income of the assessee. Accordingly, the total income was assessed at Rs.1,12,51,910/- against the returned income of Rs.1,09,61,530/-. Thus, making an addition of Rs.2,90,375/-.

3 ITA No. 5177/Del/2025 Arush Gupta 2.1 and 3 which related to the addition of Rs. 2,90,375/-, were dismissed by the ld. CIT(A) vide observation made in para 6.3 of the impugned order extracted below as under: “6.3. Ground no. 2, 2.1 & 3 are related to addition of Rs.2,90,375/- as income from consultancy business not disclosed by the appellant. Ground no. 2 & 2.1 are related to appellant’s contention that the addition made by Ld. AO was bad in law as AO failed to consider rental income in GST turnover. In Ground no. 3 appellant stated that GSTR-1 turnover of Rs. 45,40,750/- was incorrectly considered by AO whereas correct gross receipt reported in GSTR-1 by the appellant was Rs. 42,01,750/-. Appellant filed copy of annual GSTR-1 for FY 2021-22 during the course appellate proceeding. Appellant further argued that total consultancy receipt was Rs. 39,60,000/- for year and rental income was Rs. 2,41,750/- total of both was reported in GSTR-3B as Rs. 42,01,750/-. Reply submitted by the appellant in support of his main ground of appeal was perused and considered. It was observed that appellant has submitted same argument along with GSTR-1 Copy and GSTR- 3B Copy before Ld. AO in response to show cause notice dated: 25.01.2024. AO has considered appellant’s reply and accepted it also by dropping proposal of other additions as raised in show cause notice. AO has not considered appellant’s reply in respect of addition form consultancy income of Rs. 2,90,375/- and discuss this issue in para 7.4 (page no. 23 to 25) of the Assessment Order. AO has stated that he has received information from Insight Data which was collected from the GST returns of other parties, who has declared the amount in their GST Return as consultancy payment made to appellant during the year AY 2022-23. Ld. AO observed that appellant received total consultancy payment from 12 parties totalling Rs. 45,40,750/- in which he has received Rs. 44,77,500/- from a company OKAYA Power Pvt. Ltd. having PAN no. AADCA7106P. This information was confronted to appellant through show cause but appellant has not given cogent reply to Ld. AO’s question. Ld. AO therefore observed that assessee’s submission was not acceptable and added Rs. 2,90,375/- only as 50% of 5,80,750/- u/s 44ADA (Rs. 45,40,750- 39,60,000). Appellant submitted similar reply in appellate proceeding also and submitted same document which was already considered by the Ld. AO therefore, it appears that appellant has nothing to add in support of his argument and appellant has no other document to rely upon. Appellant failed to explain how rental income of Rs. 2,41,750/- can be a part of consultancy receipt

4 ITA No. 5177/Del/2025 Arush Gupta shown in GSTR-1. Further, appellant has not explain that AO has taken total consultancy receipt from the GSTR-1 Return of 12 different persons and concluded that GSTR consultancy turnover declared by appellant is incorrect. Out of 12 persons appellant received consultancy fee of Rs. 44,77,500/- from OKAYA Power Pvt. Ltd. and Rs. 63,250/- from other 11 parties but appellant has not furnished any evidence against the AO’s finding. Appellant failed to furnish any kind of certificate from these 12 parties. Therefore, appellant submission can’t be accepted on merit. Addition made by AO is upheld. Hence, Ground of Appeal no. 2, 2.1 & 3 are dismissed.” 4. Aggrieved by the dismissal of the appeal on that account, the assessee is in appeal before us and has raised the following grounds of appeal: “1. That on the facts and in the circumstances of the case, the disallowance and/OR denial of claims and/OR relief, imposition of tax and interest with reference thereto, the quantification of tax liability, has been grossly unjustified, erroneous and unsustainable and necessary direction may be given to the (‘Ld. AO’) to give appropriate relief in accordance with law. 2. That on the facts and in the circumstances of the case, the order passed by Ld. AO is illegal, perverse and bad in law. 2.1 That the Ld. AO has erred in issuing notice u/s 143(2) of the Act without complying to the CBDT Instructions which are binding in nature and hence rendering the entire assessment proceeding u/s 143(3) of the Act is void ab initio. 3. That on the facts and in the circumstances of the case, the Ld. AO has grossly erred in not considering rental income in comparison with GST turnover. 3.1 That on the facts and in the circumstances of the case, the Ld. AO has grossly erred in considering wrong amount of GST turnover as Rs.45,40,750/- instead of Rs. 42,01,750/-. 4. That on the facts and in the circumstances of the case, the Ld. AO has grossly erred in levying fees u/s 234F of the Act. 5. That on the facts and circumstances of the case, appellant should be allowed consequential relief for interest levied u/s 234Bof the Act.

5 ITA No. 5177/Del/2025 Arush Gupta 6. That the appellant craves to add, amend, modify, rescind, supplement, OR alter any of the grounds stated here-in-above, either before OR at the time of hearing of this appeal.” 5. On perusal of the ground, we have noticed that the ground No. 3 is the material ground pertaining to the addition of Rs.2,90,375/- subject matter of the appeal. Other grounds are the consequential grounds with regard to the interest u/s 234F of the Act.

6 ITA No. 5177/Del/2025 Arush Gupta 7. The ld. DR has left it to the discretion of the court of the Tribunal to consider the said submissions and has raised no objection to the restoring the matter to the file of the AO for deciding afresh.

7 ITA No. 5177/Del/2025 Arush Gupta furnish all necessary evidence alongwith certificate from 12 parties from whom appellant has received consultancy fee of Rs.44,77,500/- from OKAYA Power Pvt. Ltd. and Rs.63,250/- from other 11 parties. Hence the end of justice shall be met in case the matter is restored to the file of the Assessing Officer for deciding the issue afresh by affording an effective opportunity of hearing and considering the submissions to be made by the appellant/assessee. The assessee/appellant is also directed to make the necessary submissions/ detailed material before the Assessing Officer within the period of 60 days of this order.