PADAM SINGH,GHAZIABAD vs. INCOME TAX OFFICER, GHAZIABAD

ITA 2489/DEL/2026Status: DisposedITAT Delhi30 September 2026AY 2011-126 pages
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What did the Tribunal hold?

The Tribunal found that the documents placed on record and the additional evidence required factual verification by the AO. Regarding the sale of property (Rs. 5 lakhs), the Tribunal noted the assessee's plausible explanation for the unregistered sale deed and directed the AO to examine the buyer to verify the transaction's veracity. If found correct, the source of Rs. 5 lakhs would be accepted. For gifts (Rs. 1,96,000) and loans (Rs. 6 lakhs), the Tribunal admitted the additional evidence and directed the AO to examine its veracity and conduct necessary verification. The Tribunal decided to restore all four disputed issues (agricultural income, property sale, gifts, and loans) to the file of the AO for de novo adjudication. The assessee was granted liberty to furnish fresh evidence. The ratio is that when substantial documentary evidence is presented, even if some require verification or were submitted late, and the AO has made bald assertions without concrete material, the matter should be remanded for proper factual inquiry to ensure justice and fair play. The Tribunal expressly left undecided the chargeability of interest, stating it would be consequential.

What were the facts?

The assessee, Padam Singh, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the order of the Joint Commissioner of Income Tax (Appeals)-3, Bengaluru, which upheld the assessment order passed by the Assessing Officer (AO). The assessment year in question is 2011-12. The AO had made additions totaling Rs. 13,96,000 to the assessee's income, representing cash deposits in the bank account, by disbelieving the sources explained by the assessee. These sources included alleged agricultural income (Rs. 1 lakh), sale of property (Rs. 5 lakhs), gifts from relatives (Rs. 1,96,000), and unsecured loans (Rs. 6 lakhs). The assessee contended that he owned agricultural land, sold a property through an unregistered agreement, received gifts from relatives, and obtained loans from two individuals. The AO, without concrete material, stated that the documents were fabricated. The lower appellate authority also upheld the AO's additions.

What were the issues?

1. Whether the addition of Rs. 1 lakh on account of bogus agricultural income is valid, considering the assessee's claim of lease income from agricultural land and the supporting documents provided (Section 147 r.w.s. 143(3) of the Income-tax Act, 1961). 2. Whether the sum of Rs. 5 lakhs received from the sale of property in Sangam Vihar, New Delhi, through an unregistered agreement of sale, can be accepted as a valid source for cash deposits, given the nature of the property and the collateral documents submitted (Section 147 r.w.s. 143(3)). 3. Whether the sum of Rs. 1,96,000 received as gifts from relatives can be accepted as an available source for explaining cash deposits, considering the affidavits and confirmations provided, some notarized after assessment proceedings (Section 147 r.w.s. 143(3)). 4. Whether the sum of Rs. 6 lakhs received as unsecured loans from Shri Sunil Singh and Shri Siya Ram can be accepted as an available source for explaining cash deposits, given the confirmations, affidavits, and land holdings of the lenders submitted (Section 147 r.w.s. 143(3)). Assessee's Contentions: The assessee argued that the agricultural income was derived from leasing land, supported by a confirmation letter and land ownership proof. For the property sale, he explained the use of an unregistered agreement due to the property being in an unauthorized colony and provided supporting documents like GPA, SPA, will, and affidavit. For gifts and loans, he submitted affidavits, confirmations, and details of donors/lenders' land holdings. Revenue's Contentions: The revenue, through the AO, broadly disbelieved all explanations and documents without specific material, stating they were fabricated. The lower appellate authority upheld these findings.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI

Before: SHRI M BALAGANESH

The appeal in ITA No.2489/Del/2026 for AY 2011-12, arises out of the 1. order of the ld. Jt. Commissioner of Income Tax (Appeals)-3, Bengaluru [hereinafter referred to as ‘ld. JCIT(A)’, in short] dated 31.12.2025 against the order of assessment passed u/s 147 r.w.s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 27.09.2018 by the Assessing Officer, ITO, Ward-2(1), Ghaziabad (hereinafter referred to as ‘ld. AO’).

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The order continues below.

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