SWATI AGRAWAL,GAUTAM BUDDH NAGAR vs. INCOME TAX OFFICER, RADHIKA VIHAR

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ITA 128/AGR/2026Status: DisposedITAT Dehradun28 September 2026AY 2020-216 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 2,50,000/- as unaccounted cash was unsustainable. The Tribunal noted that the addition was made based on an excel sheet found during a search on a third party, and the assessee had categorically denied making any cash payment. There was no corroborating evidence to prove the genuineness of the excel sheet's contents. Crucially, the assessee was not provided an opportunity to cross-examine any persons whose statements allegedly formed the basis of the addition. The Tribunal reiterated the settled legal principle that documents found in the possession of a third party are not admissible as evidence unless the assessee is given an opportunity to rebut their contents or to cross-examine the relevant persons. The Tribunal also noted that no cash was found in the possession of the assessee. While the investigation report might have been sufficient to trigger reopening, the addition could not be made solely on generalized, uncorroborated information from a third-party survey, which lacks evidentiary value. Therefore, the issue was decided in favour of the assessee, and the appeal was allowed.

What were the facts?

The assessee, Swati Agrawal, is challenging an order dated 20.01.2026 passed by the CIT(A), NFAC (Delhi), which confirmed an addition of Rs. 2,50,000/-. This addition was made by the Assessing Officer under Section 69A read with Section 115BBE of the Income Tax Act, 1961, via an assessment order dated 01.03.2025 passed under Section 147. The addition was based on information obtained during a search and seizure action on Bhutani Infra Group and Associates on 04.01.2024, which allegedly revealed a cash payment of Rs. 2,50,000/- made by the assessee through unaccounted sources. The assessee's case was reopened under Section 147. The assessee denied making any such payment and stated she had no business activity. The CIT(A) dismissed the assessee's appeal.

What were the issues?

1. Whether the learned CIT(A) erred in confirming the addition of Rs. 2,50,000/- made by the Assessing Officer on account of unaccounted cash, based solely on book transactions found in the electronic records of a third party (M/s Bhutani Infra Group and Associates)? (Question of law and fact, turning on Sections 69A, 115BBE, 147, 148, 143(2), 142(1) of the Income Tax Act, 1961). Assessee's contentions: The addition is based on third-party information without supporting material evidence. The assessee was not provided with a copy of the electronic record nor given an opportunity to cross-examine the employees of Bhutani Infra Group and Associates. The assessee had booked a flat for Rs. 15,80,128/- and paid Rs. 4,32,789/- electronically, but the booking was cancelled and the transaction never matured. The amount in the excel sheet (Rs. 12,76,752/-) differs from the total consideration, suggesting the excel sheet figure is fabricated. The assessee relied on the principle that additions cannot be made without concrete material merely on the ground of entries in a third party's books and that no opportunity to rebut evidence or cross-examine was provided. Revenue's contentions: The addition was rightly made based on the statements of Bhutani Infra Group employees and information in the excel sheet. The revenue relied on the impugned order.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 147,Section 148,Section 143(2),Section 142(1),Section 250,Section 132

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA (SMC & DB

Before: SUNIL KUMAR SINGH & BRAJESH KUMAR SINGH

For Appellant: Shri Harsh Vardhan Mangal, Adv. &, Ms. Harshima Mangal, Adv
For Respondent: Shri Anil Kumar, Sr (DR)
Hearing: 08.07.2026Pronounced: 28.09.2026

Heard together (2 matters)

ITA No. 128/Agr/2026
SA 3/Agr/2026

Read from the judgment's own cause title. This page is filed under one of them.

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (SMC & DB) BENCH, AGRA BEFORE: SUNIL KUMAR SINGH, JUDICIAL MEMBER AND BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No. 128/Agr/2026 & SA 3/Agr/2026 Assessment Year: 2020-21 Swati Agrawal, Vs. ITO, Ward 1(3)(1), D 402 Steller Jeevan Jalalpur Mathura-281004 Bisrakh, Gautam Budh Nagar-201306 PAN : BHEPA4436N (Appellant) (Respondent) Assessee by Shri Harsh Vardhan Mangal, Adv. & Ms. Harshima Mangal, Adv. Department by Shri Anil Kumar, Sr (DR) Date of hearing 08.07.2026 Date of pronouncement 28.09.2026 ORDER PER: SUNIL KUMAR SINGH, J.M.

The aforestated stay application is related to the captioned appeal, therefore, both the matters are being disposed of by this common order. First we take up ITA No. 128/Agr/2026:- ITA No. 128/Agr/2026 2. This appeal is directed against the impugned order dated 20.01.2026 passed in appeal No NFAC/2019-20/10458750 by the ld. Commissioner of Income Tax, NFAC(Delhi) [(hereinafter referred to as the “CIT(A)] u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y. 2020-21, wherein ld CIT(A) has dismissed assessee’s appeal and

ITA No.128/Agr/2026 & SA No. 03/Agr/2026

confirmed the addition of Rs. 2,50,000/- as unexplained cash u/s 69A r.w.s. 115BBE of the Act, made vide, assessment order dated 01.03.2025 passed u/s 147 of the Act. 3. The brief facts state that the assessee e-filed her return of income for A.Y. 2020-21 on 02.01.2021, declaring her net income of Rs. 5,00,000/- received from salary and other sources. The return was processed and accepted vide intimation dated 05.01.2021. A search and seizure action u/s 132 of the Act was conducted on Bhutani Infra Group and Associates on 04.01.2024 by the investigation wing of the department. After analyzing all the seized material, various incriminating evidences including data of excel sheet in the pen drive were found during the search proceedings. Various statements of the employees of the Bhutani Infra Group and Associates were also recorded on oath. It was found that a cash payment of Rs. 2,50,000/- was made by the assessee to Bhutani Infra Group and Associates through unaccounted sources during the year under consideration. The assessee’s case was reopened u/s 147 of the Act by issuance of notice u/ s148 of the Act dated 30.03.2024. Assessee filed return in response thereof on 12.06.2024, declaring the same income of Rs. 5,00,000/- as was declared in the original return. Statutory notices u/s 143(2) and 142(1) of the Act and show cause notices were also issued to the assessee, seeking her to explain the source of the cash of Rs. 2,50,000/-. Assessee submitted copy of ITR, copy of bank statement, 2 | P a g e

ITA No.128/Agr/2026 & SA No. 03/Agr/2026

details of bank accounts with respect to the query raised with respect to the transactions with M/s Bhutani Infra Group and Associates. Assessee further submitted that she is a salaried employee and had income only from salary and from other sources. Assessee further submitted that she had no business activity during the year under consideration and denied to have ever paid the impugned cash to M/s Bhutani Infra Group and Associates. However, the assessing officer was not satisfied and made the aforesaid addition vide, assessment order dated 01.03.2025 passed u/s 147 of the Act. 4. The appellant assessee preferred an appeal before ld CIT(A), who dismissed assessee’s appeal and confirmed the additions made by the assessing officer. 5. Aggrieved, assessee preferred this second appeal on the following grounds: “1. Because addition cannot be made without any concrete material merely on the ground of entry found in books of the third party. 2. Because no opportunity of rebutting the evidence OR documents found at the time of survey of third party has been made available to the assessee. 3. Because learned appellate authority has passed a template based order without considering the submissions of the assessee. 4. Because learned appellate authority has not considered the citations of Honorable High Courts and ITATs submitted by the assessee. 5. Because the whole order is wrong in fact and bad in law.” 6. Perused the records. Heard ld representative for the parties.

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ITA No.128/Agr/2026 & SA No. 03/Agr/2026

7.

The main point for determination under appeal on the basis of aforesaid grounds, is as to whether ld CIT(A) has erred in confirming the addition of Rs. 2,50,000/- made by the assessing officer on account of unaccounted cash merely on the ground of entry book transactions, found in the electronic record of third party (M/s Bhutani Infra Group and Associates)? 8. Ld AR has submitted that the addition in the present case is based on the third party information without any supporting material evidence. The assessee was neither given the copy of said electronic record nor was afforded any opportunity to cross-examine the employees of the Bhutani Infra Group and Associates or any other persons on whose generalized statements, the said addition has been made. Ld AR has further submitted that the appellant assessee booked a flat with the builder for a total cost of Rs. 15,80,128/- and paid booking amount of Rs. 4,32,789/- paid through electronic mode towards the proposed purchase of a residential flat. The said booking was subsequently cancelled and the proposed transaction never matured into a purchase of flat. Ld AR submits that the amount reflected in the said recovered excel sheet from the premises of the third party is shown to be Rs. 12,76,752/- which is different from the total consideration of the proposed flat. Ld AR thus submits that the excel sheet is merely a fabricated figure of cash payment which was never made by the assessee to the said builder. Prayed to allow appeal. 4 | P a g e

ITA No.128/Agr/2026 & SA No. 03/Agr/2026

9.

Ld Sr DR for the respondent revenue has stated that the addition has rightly been made on the basis of statements of the Bhutani Infra Group employees and on the basis of the information available in the excel sheet. Ld Sr DR relies on the impugned order, praying to dismiss assessee’s appeal. 10. We notice that an addition of Rs. 2,50,000/- as an unaccounted cash has been made in the hands of assessee on the basis of the information gathered from the excel sheet found in the pen drive during the search and seizure action on Bhutani Infra Group and Associates conducted on 04.01.2024. During the assessment proceedings, assessee has categorically denied to have made any cash payment to the said builder. There is no corroborating evidence to prove the genuineness of the contents of the said excel sheet. Admittedly, the assessee has also not been provided an opportunity to cross-examining any persons on the basis of whose statements, the said addition has been made in the hands of the assessee. It is settled legal principle that document found in the possession of a third party are not admissible in evidence unless an opportunity to rebut the contents of the same or an opportunity for cross-examination is provided to the assessee. It is not the case of the revenue that any cash was found in the possession of the assessee. The investigation report was no doubt sufficient to trigger the reopening, however, the said addition could not be made merely and solely on investigation based generalized 5 | P a g e

ITA No.128/Agr/2026 & SA No. 03/Agr/2026

information received from third party survey. Such generalized uncorroborated information lacks evidentiary value. The impugned addition is thus unsustainable. The aforesaid point is accordingly determined in positive in favour of the appellant assessee and against the respondent revenue. The appeal is thus liable to be allowed. SA No. 03/Agr/2026 11. This stay application relates to ITA No. 128/Agr/2026 which has already been allowed in favour of the assessee, hence, the stay application is liable to be dismissed as infructuous. 12. In the result, ITA No. 128/Agr/2026 is allowed and SA No. 03/Agr/2026 is dismissed as infructuous.

Order pronounced in the Open Court on - 28.09.2026

Sd/- Sd/- (BRAJESH KUMAR SINGH) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated:28.09.2026 *Aamir, PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra

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