VIJAY AGARWAL,ALIGARH vs. DCIT, CENTRAL CIRCLE, ALIGARH, ALIGARH

ITA 72/AGR/2026Status: DisposedITAT Agra05 October 2026AY 2022-2312 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal partly allowed the appeal. Regarding the excess stock addition of Rs. 54,85,429, the Tribunal deleted the additions of Rs. 27,30,000 (amanat gold ornaments belonging to Shri Shiv Kumar Agarwal and Smt. Urmila Agarwal, supported by an affidavit), Rs. 5,19,437 (difference in value due to lesser deduction for 22K gold ornaments, as the DVO's deduction was arbitrary compared to the deduction in the sister concern's case), and Rs. 20,22,325 (difference in value due to lesser margin deduction for 18K gold ornaments, for similar reasons). However, the remaining difference of Rs. 1,13,667 was confirmed as unexplained. Regarding the Rs. 20,00,000 cash addition, the Tribunal confirmed it, noting the inconsistent explanation from the assessee and the fact that the cash was not contemporaneously entered in M/s Soni Jeweller's cash book, only post-search. The Tribunal found no honest effort to explain the urgency of the meeting. The judgment also noted that for ITA No. 86/Agr/2026 (M/s Soni Jewellers), certain issues regarding jewellery disclosed under IDS-2016 and differences in gross/net weight calculations needed verification by the AO, leading to a remand for that appeal.

What were the facts?

The appeals concern Assessment Year 2022-23 and arise from a search and seizure action under Section 132(1) of the Income Tax Act, 1961, conducted on February 6, 2022. The assessee, Vijay Agarwal, a proprietor dealing in gold and diamond jewellery and silver items, declared a total income of Rs. 25,33,670. During the search, a significant difference was found between the stock valuation in the assessee's books (Rs. 2,78,75,647) and the departmental valuer's report (Rs. 6,14,65,533). The Assessing Officer (AO) added Rs. 54,85,459 as excess stock and Rs. 20,00,000 as unexplained cash. The Commissioner of Income Tax (Appeals) [CIT(A)] dismissed the assessee's appeal, confirming these additions. The assessee is challenging the CIT(A)'s order dated January 14, 2026.

What were the issues?

1. Whether the CIT(A) erred in confirming the addition of Rs. 54,85,429 (stated as Rs. 53,85,429 in the show cause notice) as undisclosed business income on account of alleged excess stock of jewellery found during the search, contrary to the assessee's submissions, reconciliation statements, and supporting affidavits, and whether there was a mistake in the addition amount? (Section 143(3) of the Act) 2. Whether the CIT(A) erred in confirming the addition of Rs. 20,00,000 as unexplained cash found at the business premises, despite the assessee's explanation regarding its source and the circumstances of its discovery? (Section 143(3) of the Act) Assessee's Contentions: - The addition of Rs. 54,85,429 is erroneous, with a Rs. 1,00,000 mistake in the amount. The CIT(A) wrongly rejected the affidavit of Shri Shiv Kumar Agarwal regarding jewellery kept for security, and the reconciliation statements. The CIT(A) also erred by not considering the valuer's inconsistent deductions for 22K and 18K gold ornaments compared to the sister concern's case (M/s Soni Jewellers). - The addition of Rs. 20,00,000 is also wrongly confirmed, as the cash was received from M/s Soni Jewellers for bank deposit and was left at the premises due to an urgent meeting. The CIT(A) arbitrarily rejected the submitted explanations and documents. Revenue's Contentions: - The revenue's contentions are not explicitly recorded in the provided text, but their stance is reflected in the AO's assessment order and the CIT(A)'s order confirming the additions.

Which sections of the Income-tax Act were involved?

Section 132(1),Section 250,Section 143(3),Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA (DB

Before: SUNIL KUMAR SINGH & BRAJESH KUMAR SINGH

For Appellant: Shri Pankaj Gargh, Adv
For Respondent: Ms. Sangeeta Yadav, CIT (DR)
Hearing: 07.07.2026Pronounced: 05.10.2026

Heard together (2 matters)

ITA No. 72 /Agr/2026
ITA No. 86 /Agr/2026

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

PER: SUNIL KUMAR SINGH, JM. The facts and issues involved in both these appeals are almost identical, hence, for the sake of convenience and brevity, these appeals are being decided by this common order. The facts of ITA No. 72/Agr/2026 are only being narrated as under.

ITA No.513&514/Agr/2026

2.

This appeal has been preferred against the impugned order dated 14.01.2026 passed in Appeal No CIT(Appeals)-IV/KNP/10028/2021-22 by the ld Commissioner of Income Tax(Appeals), Kanpur [hereinafter referred to as the “CIT(A)] u/s. 250 of the Income Tax

The order continues below.

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