ATUL SHARMA,GWALIOR vs. DCIT/ACIT-CIRCLE-1(1), GWALIOR

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (SMC) BENCH, AGRA BEFORE: SUNIL KUMAR SINGH, JUDICIAL MEMBER BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No. 617/Agr/2026 Assessment Year: 2020-21 Atul Sharma, Vs. DCIT/ACI-Circle-1(1) 14/154, Meat Road, Aayakar Bhawan, City Jawahar Ganj, Dabra-475110 Centre, Gwalior-474002 PAN: BIDPS9631M (Appellant) (Respondent) Assessee by Shri S.K. Jain, CA Department by Shri Anil Kumar, Sr (DR) Date of hearing 28.09.2026 Date of pronouncement 29.09.2026 ORDER PER:SUNIL KUMAR SINGH, J.M.

This appeal is directed against the impugned order dated 02.01.2026 passed in appeal No NFAC/2019-20/10491123 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, confirming the addition of Rs. 17,62,500/- as unexplained cash investment added u/s 69 r.w.s

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115BBE of the Act, made vide assessment order dated 31.03.2025 passed u/s 147 of the Act. 2. At the very outset, we notice that, according to registry’s report, the assessee filed this second appeal on 10.08.2026 against the impugned order dated 02.01.2026 by a delay of about 132 days. The reasons mentioned in the application for condonation of delay are that, assessee did not receive the appellate order. On a random login to the IT portal, the appellant learned about the appellate order and thus the appeal was filed belatedly. The appellant prayed that the delay is neither intentional nor deliberate and may be condoned. In the interest of justice, we treat the aforesaid cause as sufficient and condone the said delay caused in filing this appeal. The appeal is admitted for hearing. 3(i). The brief facts state that the assessee filed his regular return of income for A.Y. 2020-21, declaring total income of Rs. 21,86,630/-. A search and seizure action was carried out in the case of Paras Jain Group u/s 132 of the Act on 20.03.2023. During search proceedings, at the office premises of one assessee namely M/s Narayanan Builders & developers Pvt. Ltd. situated at Ground Floor, Orchid Tower, Maharana Pratap Nagar, Lashkar, Gwalior, M.P., incriminating documents in the

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form of excel sheets, PDFs and word format were found in Seagate external hard disk, pointing towards receipt of cash. The statements of Shri Paras Jain (Director of Narayanan Builders & developers Pvt. Ltd.), Shri Ajay Bhadouriya (Accountant) and Shri Niket Jain were recorded u/s 132(4) of the Act, who accepted cash over and above the amount on which the sale deeds of flats of Orchid Tower-A had been registered. As per the information received, assessee had purchased Flat No. 408 in Orchid Tower-A where total consideration was Rs. 55,12,500/-, however, the sale consideration in the registered deed was shown as Rs. 37,50,000/- and on money paid to the builder was shown as Rs. 17,62,500/-. (ii) The reassessment proceedings u/s 147 of the Act were initiated after obtaining the approval of competent authority u/s 151 of the Act. Notice u/s 148 of the Act was issued on 06.03.2024. Assessee filed return in response thereof on 22.03.2024, declaring same income as in original return. Statutory notices u/s 143(2) and 142(1) of the Act were issued and served upon the assessee, seeking his detailed reply. Assessee submitted the he purchased the said flat in Orchid Tower for the consideration of Rs. 37,50,000/- and the said amount was paid by cheque to the builder. Assessee denied to have paid the impugned

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amount of Rs. 17,62,500/- in cash as on money to Narayanan Builders & Developers Pvt. Ltd. The details of properties purchased, sale/purchase deed, bank account statements, source of funds and the confirmation letter obtained from the builder etc. were filed by the appellant before the assessing officer. The assessing officer could not be convinced and observed that as assessee has made transaction with the said party during the relevant F.Y., hence the possibility of unaccounted payments of cash may not be ruled out, hence added impugned addition of Rs. 17,62,500/- as unexplained cash investment u/s 69 r.w.s. 115BBE of the Act in the total income of the assessee. 4. Aggrieved, assessee preferred an appeal before ld CIT(A), who dismissed assessee’s appeal, confirming the impugned addition made by the assessing officer. 5. Assessee has preferred this second appeal on the following grounds: “1. The order of the CIT(A) is bad in law and on facts. 2. The addition of Rs. 17,62,500/- under section 69 read with section 115BBE ought to be deleted, no actual investment by the Appellant having been established. 3. The Addition, being based on a generalised cash-component formula and not on transaction-specific evidence, is unsustainable. 4. The complete LPS-01 material and the statements relied upon were not supplied to or confronted with the Appellant.

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furnishing the copy of said material to assessee and without affording an opportunity to assessee to cross-examine the persons on the basis of whose statements, the impugned addition has been made. Ld AR, further submits that the assessee specifically denied to have paid any cash to the builder and also provided the confirmation letter from the builder before the revenue authorities. The said addition has been made merely on the basis of conjectures. Ld AR thus prays to delete the impugned addition. 9. Ld Sr DR has submitted that on the basis of analysis of search and seizure report dated 20.03.2023 conducted in the premises of M/s Narayanan Builders and Developers Pvt. Ltd., the assessee was found to have purchased the said Flat No. 408 in Orchid Tower-A for a total consideration of Rs. 55,12,500/-, whereas registry was shown as only Rs. 37,50,000/- and the remaining payment of Rs. 17,62,500/- was paid in cash to the builder. Ld Sr DR has stated that the said cash payment has been rightly confirmed by the impugned order. Ld Sr DR prays to dismiss assessee’s appeal. 10. We find that the revenue has not disputed that an amount of Rs. 37,50,000/- has been mentioned in the registered sale deed (purchase deed), it is also not disputed that this amount was paid by the assessee

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to the builder through electronic medium by cheque. We also notice that assessee categorically denied to have made the impugned cash payment to the builder in addition to the actual sale consideration mentioned in the sale deed. 11. The assessing officer appears to have made addition of the impugned amount by observing that as the assessee has made transaction with the builder for the purchase of said flat, hence the possibility of unaccounted payments of cash may not be ruled out. Similarly, ld CIT(A) has also made observation that the reflection of consideration of Rs. 37,50,000/- in the sale deed is for registration purpose and it does not, by itself, rule out the possibility of unaccounted consideration. We note that the confirmation letter was also filed by the assessee, wherein the builder confirmed that only the sale consideration of Rs. 37,50,000/- was paid through cheque by the assessee to the builder, however ld CIT(A) has brushed aside assessee’s evidence and gave preference to the seized digital evidence. 12. We do not agree with this conclusion of ld CIT(A) simply because the assessee was neither provided with the material seized during the search nor was provided the opportunity to cross-examine Mr. Niket

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Jain etc., whose statements were said to be recorded and on the basis of which the impugned addition was confirmed. Accordingly, we delete the addition of Rs. 17,62,500/-. The aforesaid point is thus determined in positive in favour of the appellant assessee and against the respondent revenue. 13. In the result, the appeal of the assessee is allowed.

Order pronounced in the Open Court on- 29.09.2026 Sd/- Sd/- (BRAJESH KUMAR SINGH) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 29.09.2026

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

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