PRADEEP AGGARWAL,DELHI vs. DCIT, CENTRAL CIRCLE-25, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘E’: NEW DELHI BEFORE SHRI VIMAL KUMAR, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTNAT MEMBER

ITA No.5196/DEL/2025 [Assessment Year: 2018-19]

Mr. Pradeep Aggarwal, DCIT, D-144, Street No.14, Central Circle-25, Surajmal Vihar, Vs Delhi-110055 Delhi-110092 PAN-ACBPA0074D Appellant Respondent

Appellant/Assessee by Shri S. Krishna, Adv. Respondent/Revenue by Ms. Rajinder Kaur, CIT-DR

Date of Hearing 23.02.2026 Date of Pronouncement 20.05.2026

ORDER PER AMITABH SHUKLA, AM,

This appeal by the assessee is directed against the order of Ld. Commissioner of Income Tax(Appeals)-29, New Delhi [hereinafter referred to as ‘ld. CIT(A)] dated 06.08.2025 arising out of assessment order dated

29.03.2023 passed under section 153C of the Income Tax Act, 1961, for the Assessment Year 2018-19. The word ‘Act’ herein this order would mean Income Tax Act, 1961.

ITA No.5196/Del/2025

assessee has contested the impugned appellate order dated 06.08.2025 both on

legal grounds of jurisdictional insufficiency as well as on the merits of the

addition. We would like to take the grounds concerning merits of the addition

first.

factual matrix of the case. The assessee had declared income of Rs.21,21,730/-

through its Return of Income dated 08.08.2018. Meanwhile, a search and seizure

u/s 132 was carried out on 06.02.2019 upon Shri Sanjay Jain in relation to

original search proceedings on the Kochar Group. Several incriminating

documents comprising hard data and soft digital evidences was found and

seized. It transpired therefrom that Shri Jain was engaged inter alia in betting

activities in sports and Cricket, forwarding cash loans, earning interest income

of the same. The Ld. AO has recorded in the order availability of incriminating

documents showing connection between Shri Jain and the assessee. Notice u/s

153C dated 07.09.2022 was issued to the assessee. The ld. AO noted that there Page 2 of 6

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was a whatsapp chat between the assessee and Shri Sanjay Jain, which alluded

towards fact of the assessee communicating for a transaction of ’35 ok’ and

exchange of ‘02 currency note numbers’. Applying hypothesis of human probability, the ld. AO construed the said transaction as giving a cash loan of

Rs.35 lakhs from assessee to Shri Jain. The ld. AO postulated that going by the

market rate of interest of 2% for an estimated period of 3 to 4 months on the said

cash loan of Rs.35 lakhs, the assessee was liable to earn an income of Rs.2.10

lakhs. Accordingly, he proceeded to add the amount of Rs.2.10 lakhs while

following remarks available on page-8 of the assessment order:-

“It shall be necessary to mention here that Sh. Sanjay Jain has been, apart from dealing in Cash Loans, Betting and Money Transfer Activities, has been found dealing in the disputed properties and earns a huge unaccounted profit in such deals. Apart from this, Shri Sanjay Jain is also working as a money- handler for various persons and arranges safe and profitable investment for them. The main source of unaccounted income of Sh. Sanjay are property dealing in the properties by which he has accumulated huge wealth and has also acquired many properties in his name or in the name of his family members Sh. Sanjay Jain has accumulated huge unaccounted cash from the sale/purchase or dealing in the properties. Many incriminating materials including WhatsApp chats were recovered divulging that he lend huge amount as unaccounted loan to various persons and charge interests on these loans. As per the information, Sh. Sanjay Jain charges interest from 2% to 3% per month. He also lends out money received from various persons for whom he works as a handler like assessee herein. 10. Therefore, referred details of WhatsApp are flagrantly showing Assessee has taken delivery of amount equivalent of Rs.35,00,000/- as cash loan from Sh. Sanjay Jain, in clear violation of Section 269SS of the Income Tax Act, 1961, which certainly is more than Rs. 20,000/- as prescribed. Therefore, appropriate proposal for initiation of penalty u/s 271D of the Income Tax Act, 1961 shall be Page 3 of 6

ITA No.5196/Del/2025

moved in due course for the apparent violation of Section 269SS of the Income Tax Act, 1961. 11. Since the assessee has taken cash loan, possibility of payment of interest thereon cannot be ruled out and having regard to the trend and practice followed by Sh. Sanjay Jain, he charged interest @2% per month on the short-term loans, given for a period of 3 to 4 months only, on high rate of interest. Therefore, considering this proposition itcan be concluded hat Assessee has paid interest on such cash loan for 3 months, which is calculated at Rs.2,10,000/-, being treated as unexplained/undisclosed expenditure, to be added to the total income of the Assessee, u/s 69C of the | T Act 1961 to be taxed applying rates of tax as prescribed u/s 115BBE of the Income Tax Act, 1961 for relevant assessment year. (Addition of Rs, 2,10,000/- u/s 69C of the Act)

Since the income of assessee contains an income u/s 69 of the Income Tax Act, 1961. where tax is being calculated u/s 115BBE of the Income Tax Act, 1961, separate penalty proceeding u/s 271AAC of the Income Tax Act, 1961, is also initiated simultaneously.” 5. Aggrieved by the impugned addition, the assessee approached ld. CIT(A)

who confirmed the addition made by the ld. AO as evident from para-7.2 and

7.3 of his order.

ld. AO and attempted to demonstrate that there was no merit in the hypothesis

drawn by the ld. AO to make the impugned addition. Shri S. Krishna, Advocate

argued that the entire is based upon conjectures and surmises and there are no

hard facts to support the theory. It was suggested that the ld. AO and ld. CIT(A)

have misconceived the entire facts by assuming 35K as meaning 35 lakhs. The

ld. Counsel further argued that the evidence comprising whatsapp chat is itself

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ITA No.5196/Del/2025

inadmissible as the protocol mandated for admission of electronic evidences was

not followed. It was accordingly requested that the said addition be directed to

be deleted.

lower authorities.

record. We have noted from the observations of the ld. AO extracted

hereinabove as well as those recorded by Ld. CIT(A) in para-7.2 and 7.3 of his

order that the entire addition of Rs.2.10 lakhs is resting upon a theory of human

probability and of conjectures and surmises. At the outset, nothing has been

brought on record to allude as to how 35K would mean Rs.35 Lakhs. Other than

the whatsapp communication, there is no cogent evidence on records. The

Revenue has also not been able to satisfy fulfilment of mandatory protocol

required for admission of additional evidences. Accordingly, we are of the

considered view that there is no case made out for making any addition of

Rs.2.10 lakhs in the hands of the assessee on the basis of allegation of receiving

interest in cash on unaccounted cash loan given to Shri Sanjay Jain. We,

therefore, set-aside the orders of the lower authorities, and direct the AO to

delete the addition of Rs.2.10 lakhs. The assessee succeeds qua grounds of

appeal raised challenging the merits of the addition.

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the merits of the addition, all other legal grounds of appeal challenging

insufficiency of jurisdiction have been dismissed as infructuous.

Order pronounced in the open court on 20th May, 2026.

Sd/- Sd/- [VIMAL KUMAR] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 20.05.2026 f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi,

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