ASHOK KUMAR MAHAJAN THROUGH L/H LOVESH MAHAJAN,DELHI vs. ITO, WARD-49(1), DELHI

ITA 5050/DEL/2026Status: DisposedITAT Delhi30 September 2026AY 2016-174 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the impugned order and allowed the appeal of the assessee for statistical purposes. The Tribunal noted that the CIT(A) observed that the fundamental documents linking the property sale to share trading were not furnished. However, the Tribunal found these observations contrary to the documents available on record, specifically mentioning a bank statement at pages 17-20 and an agreement to sell dated 12.01.2016 at pages 21-30 of the paper book, which were furnished before the CIT(A). The Tribunal deemed it appropriate to restore the matter to the AO for de novo assessment, directing the AO to consider the documents furnished by the assessee before the CIT(A) and afford a reasonable opportunity of making submissions. The Tribunal found the assessee's reliance on Jag Mohan vs. DCIT misplaced, as that case dealt with a different factual matrix concerning the charging section.

What were the facts?

The assessee, Ashok Kumar Mahajan (through L/H Lovesh Mahajan), filed an appeal against the order of the Additional/Joint Commissioner of Income Tax (Appeals)-4, Mumbai, dated 24.03.2026, for Assessment Year 2016-17. The appeal challenges the addition of Rs.25,66,735/- sustained by the CIT(A). The assessee sold an immovable property for Rs.46,10,000/- and invested the sale consideration in derivatives, incurring a loss of Rs.25,66,735/-. The Assessing Officer (AO) questioned the source of funds for this loss. While the assessee claimed the source was the property sale, they could not produce the agreement to sell during assessment. The AO made the addition. Before the CIT(A), the assessee submitted additional evidence, including bank statements and the sale deed.

What were the issues?

1. Whether the addition of Rs.25,66,735/- made by the AO and sustained by the CIT(A) is valid, considering the assessee's claim that the loss in derivatives trading was funded by the sale of immovable property? Assessee's contentions: The assessee argued that the source of funds for the share trading loss was the sale of an immovable property. They contended that the CIT(A) confirmed the addition without admitting additional evidence, which included bank statements and the sale deed. The assessee also relied on the decision in Jag Mohan vs. DCIT, ITA No.7055/Del/2017, arguing that the assessment order was bad in law as no specific section was mentioned by the AO or CIT(A) for the addition. Revenue's contentions: The Revenue, relying on the findings of the CIT(A) and the AO, prayed for the dismissal of the assessee's appeal.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI

Before: SHRI VIKAS AWASTHY

For Respondent: Shri Nirmal Nangia, Sr.DR

PER VIKAS AWASTHY, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order of Additional/Joint Commissioner of Income Tax (Appeals)-4, Mumbai [in short ‘the CIT(A)’] dated 24.03.2026, for Assessment Years 2016-17. 2. The solitary issue assailed by the assessee in present appeal is addition of Rs.25,66,735/- sustained by the CIT(A).

3.

Shri Saurav Rohatgi, appearing on behalf of the assessee su

The order continues below.

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