VAKIL AHMED,DELHI vs. ITO WARD 59(3), DELHI

ITA 2550/DEL/2026Status: DisposedITAT Delhi29 September 2026AY 2019-2021 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 21 lakhs on account of cash found during the search was not sustainable. The Tribunal observed that the assessee, along with his family, had withdrawn a significant amount of cash during the period under consideration, and the cash found during the search (Rs. 21 lakhs) was explained by these withdrawals. Therefore, the grounds raised by the assessee on this issue were allowed. Regarding the addition of Rs. 1.56 crores on account of gold jewelry, the Tribunal noted that the AO rejected the assessee's contention that the ornaments were acquired by way of gifts and that the assessee had not provided sufficient evidence. However, the Tribunal referred to various decisions of the ITAT and High Courts, including the jurisdictional High Court in Ashok Chhadha (supra), which held that in cases where the assessee and family members have a high income and wealthy status, gifting of jewelry is customary. The Tribunal found potency in the assessee's plea and set aside the order of the CIT(A), directing the deletion of additions made under Section 69A of the Act on account of gold ornaments, as they were at odds with established precedents. The Tribunal also noted that the quantity of jewelry found was within reasonable limits considering the social and financial status of the family and the guidelines of the CBDT circulars.

What were the facts?

The assessee, Vakil Ahmed, filed a return of income for AY 2019-20 declaring Rs. 10,45,480. A search operation by the National Investigation Agency (NIA) at the assessee's premises yielded cash of Rs. 21 lakhs and gold jewelry worth Rs. 1.56 crores (3.9 kgs). The Assessing Officer (AO) noted a discrepancy between the declared income and the seized assets. Following a notice under Section 148A(b) and an order under Section 148A(d), the AO initiated reassessment proceedings under Section 148. The assessee's explanation regarding the source of cash as withdrawals by family members and the jewelry as gifts was not accepted by the AO. The AO made additions for unexplained cash and jewelry. The assessee appealed to the CIT(A), whose order is now under challenge before the ITAT.

What were the issues?

1. Whether the addition of Rs. 21 lakhs on account of unexplained cash found during the search is justified, considering the assessee's explanation of withdrawals by family members? (Question of law and fact, concerning Section 69A of the Income-tax Act, 1961). The assessee contended that the cash was withdrawn by him and his family members over several months for household expenses and was not kept idle for other purposes. The revenue argued that the withdrawals were small, spread over months, and it was unusual for married daughters to keep such cash at their parents' house, and the assessee failed to provide proper explanation. 2. Whether the addition of Rs. 1.56 crores on account of unexplained gold jewelry found during the search is justified, considering the assessee's explanation that it was gifted to his late wife and married daughters? (Question of law and fact, concerning Section 69A of the Income-tax Act, 1961). The assessee claimed the jewelry was gifted at marriages and festivals, supported by affidavits from in-laws and daughters, and old photographs. The revenue contended that no bills, vouchers, or evidence of payment for the jewelry purchase were furnished, and it was unreasonable for married daughters to keep their jewelry at their parents' residence. The revenue also noted that the assessee failed to provide bills/vouchers for the purchase of jewelry.

Which sections of the Income-tax Act were involved?

Section 69A,Section 148A,Section 148,Section 143(2),Section 142(1),Section 144

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
1 IN THE INCOME TAXAPPELLATE TRIBUNAL DELHI BENCH “C”, NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER Vakil Ahmed, vs. ITO, Ward 59 (3), 281, Gagan Vihar, Delhi. New Delhi – 110 051. (PAN: AAEPA5478N) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri S. Krishnan, Advocate Ms. Sanya Khurana, Advocate REVENUE BY : Shri Raghubir Singh, Sr. DR Date of Hearing : 16.07.2026

Date of Order : 29.09.2026 O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER :

1.

This appeal is filed by the assessee against the order of ld. Commissioner of Income-tax (Appeals)National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT(A)”, for short] dated 10.02.2026 for the AY 2019-20. 2. Brief facts of the case are, the assessee filed his return of income for the Assessment Year 2019-20 on 08.07.2019, declaring an income of Rs.10,45,480/-. As per the information available with the Assessing Officer,

2 there was search operation conducted by the National Investigation Agency (NIA) and during the search, they found cash of Rs.21 lakhs and gold jewelry worth of Rs.1.56 crores (3.9 kgs.), seized from the premises of the assessee. Based on the above information, AO obs

The order continues below.

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