ACIT, CENTRAL CIRCLE-31, DELHI, DELHI vs. M/S AMBIT DIGIHOMES PVT. LTD., DELHI

PER ANUBHAV SHARMA, JM:

These appeals and cross objections are preferred by the assessee and

revenue against the order dated 20.06.2025 of the Ld. Commissioner of

Income Tax (Appeals)-30, New Delhi (hereinafter referred as Ld. First

Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No.:

ITBA/APL/M/250/2025-26/[1077271780(1)/1077272283(1)]arising out of

the order dated 14.03.2022 u/s 147 of the Income Tax Act, 1961 (hereinafter

referred to as ‘the Act’) passed by the DCIT, CC-31, New Delhi for AYs:

2013-14 &2014-15.

operation conducted on 14.09.2017 in the case of JS Realcon Private Limited,

P a g e | 3 ITA Nos. 6055 & 6056/Del/2025 M/s Ambit Digihomes Pvt. Ltd. (AYs: 2013-14 & 2014-15) Pivot Infratech Private Limited and Pivot Housing Private Limited at H. No.

193, Sector 11-B, Faridabad covered under Dalal group of search allegedly

incriminating material was found and impounded and the same contained a

ledger account in Imprest Suraj PD in the books of assessee for the financial

year 2012-13 and 2013-14. Ld. Assessing Officer examined the same and

concluded that cash payments have been made by assessee during financial

year relevant to both the Assessment Years involved. Accordingly, the case

was reopened u/s 147/148 of the Act and assessee was asked to explain the

nature of transactions on the basis of these alleged incriminating material for

which assessee submitted that the assessee has no connection whatsoever

with the same. It was submitted that even the identity of Mr. Suraj in whose

name the ledger exist is not established. It was however submitted that

assessee company has purchased land in April, 2012 and May, 2012 and

June, 2012. The sale deed were registered and the alleged payment of cash

amounts are subsequent to the registration of land, therefore, it becomes

questionable as to why cash payments would be made subsequent to the

registration of thedas land. However, the assessing officer was not satisfied

and observed para 7.1 & 7.2 (AY 2013-14) as follows:

P a g e | 4 ITA Nos. 6055 & 6056/Del/2025 M/s Ambit Digihomes Pvt. Ltd. (AYs: 2013-14 & 2014-15)

“7.1. The assessee company denied any relationship of itself with the impounded ledger account. However, the impugned ledger account was impounded from the premises of M/s JS RealconPt Ltd, M.s Pivot InfratechPvt Ltd and M/s Pivot Housing Pvt Ltd during the survey operation and Shri Surender Singh was the director of all these companies during the year under consideration. Further, on perusal of sale deeds executed in financial year 2012-13 by the assessee company, it has been observed that the sale deeds were signed by Shri Surender Singh on behalf of the assessee company which clearly establishes that Shri Surender Singh was closely related to the assessee company. The same facts were confronted to the assessee firm vide this office letter dated 06.12.2021 issued while disposing off the objections raised by the assessee. 7.2. Further, the assessee company claimed that Mr. Suraj as mentioned on the ledger accounts have no relation with the assessee company. On perusal of page no. 2 and 3 of Annexure A-9 impounded during the survey operation, it has been observed that the ledger account of page no. 2 and 3 have narration "South Indian Bank - 557 ADPL, Che. No. 566199 salary to Suraji, which indicates that salary was paid to Suraj from M/s Ambit Digihomes Private Limited, South Indian Bank-557. On perusal of bank statement of account no. 0434073000000557 in South Indian Bank in the name of M/s Ambit Digihomes Private Limited, it was found that all the bank transactions made through bank as mentioned on the page no. 2 & 3 are exactly reflecting in this bank account of assessee. This fact proves the authenticity of impounded ledger accounts. Therefore, the claim of the assessee company that it has no relationship with any person namely 'Suraj' is misplaced and cannot be relied upon.”

2013-14 and Rs. 2,46,74,000/- was made in AY 2014-15. Assessee succeeded

before ld. CIT(A) and thus department is in appeal and has raised following

grounds (AY 2013-14);

“1. Whether on the facts and in the circumstances of the case, the Ld. CIT (A) has erred in deleting the addition of Rs. 6,55,00,000/- - u/s 69C of the Income-tax Act, 1961 which was based on the ledger account seized from the premises of M/s J.S. Realcon Pvt Ltd, M.s Pivot Infratech Pvt Ltd and M/s Pivot Housing Pvt Ltd during the survey operation, considering that Shri Surender Singh was the director of all these companies during the year under consideration, and during the assessment proceedings and remand proceedings, a clear nexus was established and proved between Shri Surender Singh and the assessee company?

P a g e | 5 ITA Nos. 6055 & 6056/Del/2025 M/s Ambit Digihomes Pvt. Ltd. (AYs: 2013-14 & 2014-15)

P a g e | 6 ITA Nos. 6055 & 6056/Del/2025 M/s Ambit Digihomes Pvt. Ltd. (AYs: 2013-14 & 2014-15) 6. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law. 7. The grounds of appeal are without prejudice to each other. 8. The appellant craves leave to add, amend, alter or forgo any grounds) of appeal either on or before the final hearing of the appeal.”

Ground No. 1 to 5: (AY: 2013-14)

alleged cash expenditure based on the impounded ledger" ImprestSuraj PD"

seized from M/s J.S. Realcon Pvt. Ltd., M/s Pivot Infratech Pvt. Ltd., and M/s

Pivot Housing Pvt. Ltd., alleging nexus with "Sh. Surender Singh", Director

in the said companies. The ld. AO observed that the pages 1,2,2,22,77 and 79

of Annexure A-9 impounded from the premises contains ledger accounts in

the name of "Imprest Suraj PD" in the books of Ambit Digihomes Pvt. Ltd.

for the financial years 2013-14 and 2014-15 and perusal of pages 1,3 and 22

of Annexure A-9, show that the cash payments have been made by M/s

Ambit Digi-homes Pvt. Ltd. during the financial year 2013-14 relevant to

assessment year 2014-15.

P a g e | 7 ITA Nos. 6055 & 6056/Del/2025 M/s Ambit Digihomes Pvt. Ltd. (AYs: 2013-14 & 2014-15) 4.1 The assessee company had denied any relationship of itself with the

impounded ledger account. However, ld. AO concluded that the impugned

ledger account was impounded from the premises of M/s JS Realcon Pvt.

Ltd., M/s Pivot Infratech Pvt. Ltd. and M/s Pivot Housing Pvt. Ltd during the

survey operation and Shri Surender Singh was the director of all these

companies during the year under consideration. Further, on perusal of sale

deeds executed in financial year 2012-13 by the assessee company, it has

been observed that the sale deeds were signed by Shri Surender Singh on

behalf of assessee company which clearly establishes that Shri Surender

Singh was closely related to the assessee company. The ld. AO thus

concluded as follows;

"It has been observed that the ledger account of page no. 2 and 3 have narration "South Indian Bank-557 ADPL, Che. No. 566199 salary to SurajJi", which indicates that salary was paid to Suraj from M/s Ambit Digihomes Private Limited, South Indian Bank-557. On perusal of bank statement of account no. 0434073000000557 in South Indian Bank in the name of M/s Ambit Digihomes Private Limited, it was found that all the bank transactions made through bank as mentioned on the page no. 2 & 3 are exactly reflecting in this bank account of

P a g e | 8 ITA Nos. 6055 & 6056/Del/2025 M/s Ambit Digihomes Pvt. Ltd. (AYs: 2013-14 & 2014-15) assessee. This fact proves the authenticity of impounded ledger ac- counts.”

4.2 The Ld. CIT(A) has however concluded that there is the inherent

unreliability of the seized ledgers themselves. These documents are un-

signed, undated, and maintained in Tally software, a platform notorious for

its susceptibility to manipulation due to the absence of an audit trail or user

authentication protocols. The appellant has rightly emphasized that such

records lack the hallmarks of authenticity required to serve as credible

evidence. Ld. CIT(A) relied the decision of the Hon'ble Supreme Court's

ruling in CIT vs. S Khader Khan Son (2013) by observing that same is

squarely applicable here, wherein it was held that "dumb documents" those

lacking signatures, dated, or independent corroboration carry no evidentiary

value in tax proceedings. In the absence of supplementary evidence linking

these ledgers to the appellant or verifying their con-tents, the AO's reliance

on them is not merely misplaced but legally indefensible. Thus ld. CIT(A)

concluded as follows;

“Appellant has convincingly demonstrated a complete disconnect between itself and the surveyed entities. There is no evidence whether

P a g e | 9 ITA Nos. 6055 & 6056/Del/2025 M/s Ambit Digihomes Pvt. Ltd. (AYs: 2013-14 & 2014-15) documentary, testi-monial, or otherwise establishing that the directors, shareholders, employees, or any affiliates of the surveyed entities were part-ners, associates, or otherwise linked to the appellant LLP. This absence of a proven nexus undermines the foundational premise of the AO's case. Furthermore, the identity of "Suraj" remains wholly unestalished. Despite the appellant's persistent demand for clarification, the department has failed to provide even rudimentary details about Suraj his full identity, role, relationship to the appellant, or a statement corroborating the alleged payments. This glaring omission leaves the alleged recipient of the funds as a phantom figure, devoid of legal or factual significance in these proceedings. " (para 8.1 at page no. 75-76 of the CIT(A) order).

3.3 The appellant's defence is further fortified by irrefutable bank evidence that directly contradicts the AO's narrative. The appellant submitted detailed bank statements from South Indian Bank A/c No. 0434073000000557, which unequivocally establish that Cheque No. 566199 cited in the seized ledger as evidence of a payment to Suraj was, in fact, issued to Mr. Surender Singh, an entirely distinct individual; with no apparent connection to Suraj. This cheque represented a temporary loan of Rs. 4.5 lakhs, which was fully repaid on 05.01.2015, a fact that predates the survey carried on 14.09.2017 and negates any suggestion of an outstanding or unexplained financial obligation." (para 8.3 at page no. 76 of CIT(A) order).

P a g e | 10 ITA Nos. 6055 & 6056/Del/2025 M/s Ambit Digihomes Pvt. Ltd. (AYs: 2013-14 & 2014-15) Further, CIT(A) reproduced South Indian Bank A/c No. 0434073000000557 statement at page no. 77-79 of the CIT(A) order and held that "This evidence strikes at the heart of the AO's theory, exposing a fatal misidentification of the transaction's recipient and purpose. Astonishingly, the AO's remand report sidesteps this critical evidence entirely offering no explanation or rebuttal to reconcile this discrepancy." (para 8.3 at page no. 79 of CIT(A) order).”

rival contentions we find that ld. Assessing Officer had drawn conclusions

with regard to unexplained expenditure taxable under the income u/s 69C of

the Act on the basis of ledger account found during survey operations of 3

entities i.e. J.S. Realcon Pvt. Ltd.; Pivot Infrastructure Pvt. Ltd.; & Pivot

Housing Pvt. Ltd. The content of this ledger account were not considered to

be truthful on the basis of an entry of cheque by which salary was paid to one

Suraj Ji from the bank account of assessee and this vital aspect has been

P a g e | 11 ITA Nos. 6055 & 6056/Del/2025 M/s Ambit Digihomes Pvt. Ltd. (AYs: 2013-14 & 2014-15) found to be incorrect by ld. CIT(A) and even the assessing officer in the

remand report could not justify these facts of the ledger account by any

further evidence to show that the person referred to Mr. Suraj Ji was same as

Surender Singh.

presumption drawn out of some entries in the ledger account wherein

reference was made of name Suraj Ji which assessing officer has presumed to

be none other than Surender Singh and Surender Singh has signed sale deed

on behalf of the assessee and Surender Singh was director of the aforesaid

referred three companies which are subject to survey. Assessee had

responded to this assertion also by submitting that Surender Singh has no

concern with the assessee company but was merely a representative of the

company to get the sale deed executed on behalf of the company. However,

there was no other evidence to show that Surender Singh had any stake

whatsoever in the assessee company.

9 We are of the considered view that when assessing officer intended to

draw inferences of cash payment with regard to an expenditure on the basis

P a g e | 12 ITA Nos. 6055 & 6056/Del/2025 M/s Ambit Digihomes Pvt. Ltd. (AYs: 2013-14 & 2014-15) of a document of the nature of a ledger account that too found from some

unrelated party, the inferences can be drawn only on the basis of some

material corroborations of the transactions recorded in the ledger account.

Moreso, when the provisions of Section 69C are to be invoked on account of

alleged expenditure to question its sources then there should be a very

crystallized finding as to what was the reason for expenditure in terms of the

operations of the assessee company.

expenditure were on account of “on money” paid by the assessee for

acquiring any land then this aspect should have been further corroborated by

some evidences of such transactions. On the contrary, the assessee has come

up with the specific case that land was purchased much prior to relevant

entries of cash payments. Thus, rebutting the justification of reasons for cash

payment as there was no corresponding business activity of acquiring asset

for making an expenditure on the date of alleged cash payments to Suraj Ji.

reasonable view on the basis that when identity of this person Suraj Ji

P a g e | 13 ITA Nos. 6055 & 6056/Del/2025 M/s Ambit Digihomes Pvt. Ltd. (AYs: 2013-14 & 2014-15) remains un-established and the corroboration evidence in the form of

payment of salary to Suraj Ji by cheque is disproved by establishing that this

cheque which issued to Surender Singh an entirely distinct individual then the

alleged additions made u/s 69C of the Act deserved to be deleted and rightly

done by the ld. CIT(A). The additions thus, made in the two assessment year

before us by assessing officer were rightly deleted. The ground raised by the

department have no substance. The corresponding cross objection raised by

the assessee become infructuous. As a consequence the appeals of revenue

are dismissed and the cross objection also stand dismissed being infructuous.

Order pronounced in the open court on 20.05.2026

Sd/- Sd/- (Amitabh Shukla) (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 20.05.2026 Rohit, Sr. PS

P a g e | 14 ITA Nos. 6055 & 6056/Del/2025 M/s Ambit Digihomes Pvt. Ltd. (AYs: 2013-14 & 2014-15) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI