RAHUL CHAUHAN,DELHI vs. ITO WARD 34(2), DELHI

ITA 902/DEL/2026Status: DisposedITAT Delhi29 September 2026AY 2010-113 pages
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What did the Tribunal hold?

The Tribunal decided that a lumpsum addition of 2.5% of the entire cash deposits of Rs.7,77,68,987/- would be just and proper. This addition is inclusive of the Gross Profit (GP) already declared by the assessee. The reasoning is that while the assessee could not fully reconcile and verify the cash deposits to the satisfaction of the Assessing Officer, these deposits are presumed to be part of the sales of mobile phones. The Tribunal deemed it appropriate to make a further addition, considering the factual backdrop, but with a specific rider that this shall not be treated as a precedent. Necessary computation shall follow as per law. No other ground or argument was pressed before the Tribunal. The issue of whether the addition of 8% was excessive was implicitly decided by reducing it to 2.5%.

What were the facts?

The assessee, Sh. Rahul Chauhan, is appealing an order from the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, dated January 20, 2025. This order upheld the Income Tax Officer's assessment for the assessment year 2010-11, which was made under section 143(3) read with section 147 of the Income-tax Act, 1961. The appeal concerns an addition of 8% of cash deposits totaling Rs.7,77,68,987/-, amounting to Rs.62,21,519/-, as unexplained. The assessee is engaged in the business of trading mobile recharge and cell phones, declaring a Gross Profit (GP) rate of 1.19% on mobile set sales. The assessee's appeal was filed with a delay of 303 days, which was condoned.

What were the issues?

1. Whether the Tribunal had to decide if the lower authorities erred in assessing 8% of the entire cash deposits of Rs.7,77,68,987/-, amounting to Rs.62,21,519/-, as unexplained, in light of the assessee's business of trading mobile recharge and cell phones with a declared GP rate of 1.19% on mobile set sales, turning on the provisions of section 147 and related sections of the Income-tax Act, 1961. Assessee's Contentions: The assessee sought to reverse the findings of the lower authorities who assessed 8% of the cash deposits as unexplained. The assessee is engaged in the business of trading mobile recharge and cell phones and has declared a GP rate of 1.19% on mobile set sales. Revenue's Contentions: The revenue supported the impugned cash deposit addition. The judgment does not explicitly detail the revenue's specific arguments beyond supporting the addition.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

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Income Tax Appellate Tribunal, DELHI BENCH: ‘A’ NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SMT. RENU JAUHRI

Hearing: 23.07.2026Pronounced: 29.09.2026

PER SATBEER SINGH GODARA, JM This assessee’s appeal for assessment year 2010-11, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1072334119(1), dated 20.01.2025 involving proceedings under section 143(3) r.w.s. 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused. 2

For the reasons stated in the assessee’s condonation averments, delay of 303 days in filing of the instant appeal is condoned in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).

3.

Coming to the assessee’s sole substantive ground raised herein, we notic

The order continues below.

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