ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX DEPARTMENT vs. SATINDER SONDHI, DELHI

ITITA 9/DEL/2025Status: DisposedITAT Delhi28 September 2026AY 2012-1311 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the Revenue's first ground regarding the admission of additional evidence under Rule 46A was not merited. It reasoned that the assessment was ex-parte, the evidence was directly relevant to the addition, and the AO had a full opportunity to examine and rebut it through the remand report. Therefore, no prejudice was caused to the Revenue. Regarding the second ground, the Tribunal found that while the CIT(A)'s deletion was based on factual findings regarding a small, explained corpus, these findings lacked support from primary evidence. The Tribunal noted that the reconciliation included delivery-based purchases of ₹1.43 crore, and the source and extent of funds deployed, including recycling of proceeds, required specific examination. Crucially, the assessee's AR failed to produce the primary documents before the Tribunal. The Tribunal held that the assessee could not sustain positive factual findings without underlying evidence, especially when challenged. It set aside the CIT(A)'s finding on this ground and restored the issue for fresh adjudication to the CIT(A), directing a thorough examination of all primary evidence to determine the actual corpus deployed and its source, distinguishing between gross turnover and actual investment. The Tribunal expressed no opinion on the ultimate merits.

What were the facts?

The Revenue appealed the order of the CIT(A) for AY 2012-13, which deleted an addition of ₹2,27,40,324/- made under Section 69. The assessee, an individual and non-resident, traded shares and securities through IIFL Securities Ltd. He did not file a return, claiming losses and income below the taxable limit. Based on CIB information, the AO initiated reassessment proceedings under Section 147, issuing a notice under Section 148. After jurisdiction transfer and ex-parte assessment under Section 144, the AO treated the entire transaction value as unexplained investment. Before the CIT(A), the assessee sought admission of additional evidence under Rule 46A, including broker statements and bank records, to explain the nature of transactions as primarily F&O and intraday trading, not investment.

What were the issues?

1. Whether the CIT(A) erred in admitting additional evidence under Rule 46A of the Income-tax Rules, 1962, without recording the necessary satisfaction and despite the assessee's failure to establish sufficient cause for not producing the evidence before the AO, as argued by the Revenue. The assessee contended that the evidence was crucial for establishing the nature of transactions and that the AO had an opportunity to examine it during remand proceedings. 2. Whether the CIT(A) erred in deleting the addition under Section 69, holding that F&O transactions do not constitute 'investment' and that the gross transaction value could not be equated with actual deployment of funds, despite the requirement of funds for margins and mark-to-market settlements, the source of which remained unexplained, as argued by the Revenue. The assessee argued that only a small corpus was deployed and repeatedly circulated, and the CIT(A) accepted this, finding funds sourced from family members.

Which sections of the Income-tax Act were involved?

Section 69,Section 147,Section 148,Section 144,Section 142(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES “D” NEW DELHI

Before: MS. KAVITHA RAJAGOPAL & SHRI NAVEEN CHANDRA

For Appellant: Shri K. Sampath, Advocate
For Respondent: Ms Garima Mathur, Sr. DR
Hearing: 30.06.2026Pronounced: 28.09.2026

Per Kavitha Rajagopal, JM:

This appeal is filed by the Revenue challenging the order of the Learned Commissioner of Income Tax (Appeals) [‘Ld. CIT(A)’ for short], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act', for short), pertaining to the Assessment Years (‘A.Y.’ for short) , 2012-13. 2. The Revenue has challenged the order of the ld. CIT(A) for Assessment Year 2012-13, whereby the addition of ₹2,27,40,324/- made under section 69 of the Income-tax Act, 1961 was deleted. The Revenue has essentially raised two

2 IT(IT)A No.09/Del/2025 ACIT vs. Satinder Sondhi substantive grounds: first, challenging the admission of additional evidence by the ld. CIT(A) under Rule 46A; and seco

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 69

All 9,011 judgments and leading authorities on Section 69 →

Recent GST High Court judgments

Search GST case law →