BHARAT KUMAR,UTTAR PRADESH vs. ACIT, DELHI

ITA No.1063/Del/2026 BHARAT KUMAR IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F” NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A No.1063/Del/2026 Assessment Year: 2019-20 BHARAT KUMAR, Vs. ACIT, Gautam Buddha Nagar, Aminabad urf Central Circle-27, Nyana, Salempur Gujar, Greater Noida, Delhi 110055. Uttar Pradesh 203202. PAN No.HHPPK6666D Appellant Respondent Assessee by Shri S.S. Nagar, Adv & Shri Harsh Raghav, Adv Revenue by Ms. Monika Singh, CIT DR Date of hearing: 26.05.2026 Pronouncement on 26.05.2026 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER:

1.1 A search action was conducted on a Rajasthan based land aggregator named Navin Mahipal on 16.10.2019. During the course of such search action allegedly incriminating documents were seized which contained information related to one Shri Robert Vadra (Proprietor – M/s Artex) and various companies related to him. During this search action 1

ITA No.1063/Del/2026 BHARAT KUMAR documents were also recovered pertaining to the assessee under consideration. Thereafter, proceedings u/s 153C of the Act for AYs 2010- 11 to 2019-20 were initiated in the case of Shri Robert Vadra and also in the case of the assessee. There is an allegation that Shri Robert Vadra has invested substantial sums of money, allegedly from income arising from undisclosed sources, with the help of one Shri Mahesh Nagar and his Associates. Thereafter, search action was also conducted on the premises of Shri Mahesh Nagar and his Associates. There is an allegation that the said Shri Mahesh Nagar has utilized the services of several people for investment of alleged unaccounted income of Shri Robert Vadra. There is an allegation that the assessee under consideration was one of the conduits for channeling allegedly unaccounted investments of Shri Robert Vadra. Thereafter, the Ld. AO has given a detailed finding in the body of his order dated 30.03.2023 and has concluded in para 5.6 at page 12 of his order that the assessee has been used to channel unaccounted investments of Shri Robert Vadra through Shri Mahesh Nagar. Thereafter, the Ld. AO proceeded to add Rs.1,11,93,500/- u/s 68 of the Act on protective basis, following a substantive addition of the same amount under the same section in the hands of Shri Robert Vadra.

1.2 The aggrieved assessee approached the Ld. CIT(A) where he could not succeed, leading to the present appeal before the ITAT. It may be briefly mentioned that the assessee has challenged the assumption of jurisdiction; has challenged the addition on the basis of a claim that the 2

ITA No.1063/Del/2026 BHARAT KUMAR same is not made on account of any seized material; and also on the ground that no addition u/s 68 of the Act was possible considering that the assessee had duly established the genuineness of the impugned transaction.

1.3 On the last date of hearing the Ld. CIT – DR filed an application requesting consolidation of appeals pertaining to Shri Robert Vadra, where the impugned amount has been substantively added. On a query from the Bench regarding the status of the matter pertaining to Shri Robert Vadra it was informed at the Bar by the Ld. AR that as far as he was aware, that matter was still pending with the Ld. CIT(A).

2.1 The Ld. CIT – DR repeated her request for consolidation of this appeal with the appeal of Shri Robert Vadra since substantive and

ITA No.1063/Del/2026 BHARAT KUMAR protective assessments legally need to be decided simultaneously so that the correct income can be assessed in the hands of the assessee or in the hands of Shri Robert Vadra.

ITA No.1063/Del/2026 BHARAT KUMAR was primarily believed to be the true owner of the income and at the same time a protective assessment was made on the alternative person just to keep the option open in case the first assumption turned out to be wrong. This particular case law legally validated the practice of protective assessments and became the foundation for a series of judgments in later years. For the purposes of the present adjudication, a review of judicial literature on the subject reveals that both substantive and protective assessments must be adjudicated together so that technically the income/receipt under consideration can be taxed in one or the other hand. We are conscious of the fact that the Revenue Authorities have erred in spreading out the substantive and protective assessments in the name of several persons, other than Shri Robert Vadra, in such a manner that they are not being heard together. In our opinion, this would disturb the delicate issue of taxability of a particular receipt, in this case the impugned amount, in either the hand of the assessee or in the hand of Shir Robert Vadra. As mentioned earlier while summarizing the arguments of Ld. AR, that it was fairly mentioned by the Ld. AR that this Bench could consider remanding this matter back to the file of Ld. CIT(A) where both the substantive and the protective assessments could be holistically dealt with to avoid any miscarriage of justice and should also conform to the judicial principles governing substantive and protective assessments. We wholeheartedly support this view and also agree with the contention of Ld. CIT-DR that such cases

ITA No.1063/Del/2026 BHARAT KUMAR should be consolidated and heard together. Accordingly, we set aside the impugned order and remand this matter back to the file of Ld. CIT(A) who is seized of the matter pertaining to Shri Robert Vadra. We would expect that the Ld. CIT(A) would examine the facts in both the cases and arrive at a judicious conclusion regarding the taxability, or otherwise, of the impugned receipt. We would also expect the Ld. CIT(A) to adjudicate on the legal grounds challenging the assumption of jurisdiction raised by the assessee, which have been raised before us. We direct accordingly.

Order pronounced in the open court on 26.05.2026

Sd/- Sd/- (MAHAVIR SINGH) (SANJAY AWASTHI) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 01.06.2026 *Kavita Arora, Sr. P.S. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI

ITA No.1063/Del/2026 BHARAT KUMAR

Sr. No. Particulars Date 1 Date of dictation of Tribunal Order 26.05.2026 2 Date on which typed draft Tribunal Order is placed before the 27.05.2026 Dictation Member 3 Date on which typed draft Tribunal Order is placed before the 01.06.2026 other Member (in the case of DB) 4 Date on which the approved draft Tribunal Order comes to the 01.06.2026 Sr. P.S. /P.S. 5 Date on which the fair Tribunal Order is placed before the 01.06.2026 Dictating Member for sign 6 Date on which the fair Order is placed before the other Member 01.06.2026 for sign (in the case of DB) 7 Date on which the signed order comes back to the Sr. P.S. /P.S 01.06.2026 for uploading on ITAT website 8 Date of uploading, if not, reason for not uploading 01.06.2026 9 Date on which the file goes to the Bench Clerk 01.06.2026 10 Date on which order goes for xerox 11 Date on which the file goes for endorsement 12 Date on which the file goes to the Superintendent/O.S. for checking 13 Date on which the file goes to the Assistant Registrar for signature on the order 14 Date on which the file goes to dispatch section for dispatch the Tribunal Order 15 Date of dispatch of order 16 Date on which file goes to Record Room after dispatch the order