RADIOACTIVE HOSPITALITY LLP,DELHI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -3, PATNA

ITA 55/PAT/2026Status: HeardITAT Patna23 September 2026AY 2023-247 pages
AI SummaryAllowed

What were the facts?

The assessee, Radioactive Hospitality LLP, is appealing an order by the CIT(A)-3, Patna, for Assessment Year 2023-24. The assessee owns a premise leased to M/s Rudra Food and Beverages Pvt. Ltd. from May 1, 2022, for Rs. 2,00,000 per month. Following a search operation on the Hari Om Laxmi Narayan Group, to which the lessee belonged, on August 24, 2022, the assessee terminated the lease agreement effective September 2022. The lessee vacated the premises, and the assessee refunded the Rs. 36,00,000 deposit. The assessee claims no rent was received or accrued. The Assessing Officer made an addition of Rs. 10,00,000, which was confirmed by the CIT(A). The assessee seeks deletion of this addition.

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 10,00,000 made by the Assessing Officer under Section 69A of the Income Tax Act, 1961, was not justified. The Tribunal noted that if the amount were to be considered income, it would fall under 'income from house property,' with potential deductions under Section 24. However, it could not be treated as unexplained money under Section 69A. The Tribunal found it an admitted fact that the lease agreement was terminated, and the deposits were refunded, as supported by the assessee's bank and ledger accounts, and an affidavit. There was no forfeiture of deposits. Furthermore, no incriminating material was found during the search on the Hari Om Laxmi Narayan Group indicating any payment to the assessee, and the assessment was completed under Section 143(3), not Section 153C. Since the assessee did not receive rent and the lease was terminated, the addition was deleted. The appeal of the assessee was allowed.

What were the issues?

1. Whether the addition of Rs. 10,00,000 as unexplained money under Section 69A of the Income Tax Act, 1961, is justified when the assessee claims non-receipt of rent due to termination of a lease agreement? Assessee's Contention: The assessee argued that the lease agreement was terminated due to a search operation on the lessee's group, and no rent was received or accrued. The deposit was refunded, as evidenced by the ledger and bank accounts, and an affidavit from the partner. The addition of Rs. 10,00,000 should be deleted. Revenue's Contention: The revenue contended that the assessee failed to prove the non-receipt of rent. Given the normal rent of Rs. 2,00,000 per month and the assessee being a company expected to follow the mercantile system of accounting, the rent should be assessed in the assessee's hands.

Which sections of the Income-tax Act were involved?

Section 69A,Section 24,Section 143(3),Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PATNA BENCH PATNA

Before: SHRI GEORGE MATHAN & SHRI LAXMI PRASAD SAHU

Hearing: 23/09/2026Pronounced: 23/09/2026

Per George Mathan, JM: This is an appeal filed by the assessee against the order of the CIT(A)-3, Patna [hereinafter referred to as the ‘CIT(A)’] in appeal no.CIT(A), Patna-3/10124/2022-23 dated 28.11.2025 for the assessment year 2023-24. 2. Shri Malav Goswami, Advocate appeared on behalf of the assessee and Shri Ravi Kant Chowdhary, Sr. D.R. represented on behalf of the revenue.

3.

It was submitted by the ld. AR that the assessee was an owner of a premise for running restaurant. It was the submission that the ass

The order continues below.

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