SANGITA ASHOK BANTHIA,MUMBAI vs. DCIT CENTRAL CIRCLE -27, NEW DELHI

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ITSSA 5313/DEL/2025Status: DisposedITAT Delhi15 January 2026AY 2018-196 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee had requested the admission of an additional ground of appeal challenging the legality of the order passed under section 153A, arguing that no incriminating material was found during the search. The Tribunal observed that the CIT(A) had not adjudicated this additional ground. Consequently, the Tribunal held that the appellate order deserved to be remitted back to the CIT(A) for re-adjudication of the assessee's appeal, considering the legal ground raised through the additional ground. The CIT(A) was directed to re-adjudicate the matter in accordance with the law after giving the assessee an opportunity of being heard. The same decision was applied mutatis mutandis to the appeal for AY 2018-19. The Tribunal did not decide the merits of the additions made under section 68 or section 44AD, as the primary issue was the non-adjudication of the legality of the section 153A proceedings. The appeals were allowed for statistical purposes.

What were the facts?

The assessee, Sangita Ashok Banthia, filed appeals against orders dated 19.06.2025 passed by the CIT(A)-31, New Delhi. These orders arose from assessment orders dated 31.12.2019 passed under section 153A and 144 r.w.s. 142(1) of the Income Tax Act, 1961, for Assessment Years (AY) 2017-18 and 2018-19. A search action under section 132 was conducted upon the LARA Group, and a warrant of authorization was issued to the assessee. The Assessing Officer (AO) made additions concerning unsecured loans. For AY 2017-18, an addition of Rs. 17,40,000/- was made, which the CIT(A) partly confirmed at Rs. 13,38,000/-, granting relief of Rs. 4,02,000/-. For AY 2018-19, an addition of Rs. 1,17,540/- was made. The assessee did not appear before the Tribunal.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in not adjudicating the additional ground of appeal regarding the legality of the order passed under section 153A, where no incriminating material was found pursuant to the search action, and the reasons assigned were contrary to the Act and Rules. Assessee's contention: The order passed under section 153A is illegal and bad in law as no incriminating documents/papers/materials were found during the search action, and the reasons for passing the order are wrong and contrary to the Income Tax Act and Rules. Revenue's contention: Not recorded. 2. Whether, on the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in confirming the addition of Rs. 13,38,000/- (for AY 2017-18) and Rs. 1,17,540/- (for AY 2018-19) made to the returned income in respect of unsecured loans/business profit, treating them as unexplained cash credit under section 68 or as business profit under section 44AD, without assigning valid reasons. Assessee's contention: The addition in respect of unsecured loans is wrong and contrary to the provisions of the Income Tax Act and Rules. The addition in respect of business profit under section 44AD is also wrong as the AO ignored the loss incurred and considered 8% of gross receipts as profit without valid reasons. Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 153A,Section 144,Section 142(1),Section 132,Section 68,Section 44AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH, ‘E’: NEW DELHI

Before: SHRI SATBEER SINGH GODARA

For Respondent: Ms. Ankush Kalra, Sr. DR
Hearing: 15.01.2026Pronounced: 15.01.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘E’: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTNAT MEMBER

IT(SS)A Nos.5312 & 5313/DEL/2025 [Assessment Years: 2017-18 And 2018-19] Sangita Ashok Banthia, DCIT, 601, Giri Residency, J.B. Nagar, Central Cirlce-27, Andheri (East), Mumbai, Vs Jhandewalan Extn. Maharshtra-400059 Delhi-110055 PAN-AABPB9972F Assessee Revenue Assessee by None Revenue by Ms. Ankush Kalra, Sr. DR Date of Hearing 15.01.2026 Date of Pronouncement 15.01.2026

ORDER PER AMITABH SHUKLA, AM,

These two appeals filed by the assessee is against order both dated 19.06.2025 of the learned Commissioner of Income Tax (Appeals)-31, New Delhi, [hereinafter referred to as ‘ld. CIT(A)] arising out of assessment order both dated 31.12.2019 passed under section 153A and 144 r.w.s. 142(1) of the Income Tax Act, 1961 pertaining to Assessment Years 2017-18 and 2018-19. The word ‘Act’ herein this order would mean Income Tax Act, 1961.

ITA No.5312 & 5313/Del/2025

2.

Since, both the appeals pertain to the same assessee, they were heard together and are being adjudicated by this common order.

IT(SS)A No.5312/Del/2025 for AY 2017-18

3.

Grounds of appeal raised by the assessee for Assessment Year 2017-18 are as under:-

1.

On the facts and in the circumstances of the case and in law the Hon'ble CIT(A) erred in not adjudicating additional ground of appeal raised in respect of section 153A WHARE in no such incriminating material/paper/documents were found/seized pursuant to search action u/s 132 of the Act and the reason assigned for doing so are wrong and contrary to the provisions of Income Tax Act and Rules made there under. 2. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in confirming the addition of Rs. 13,38,000/- made to the returned income by the Ld AO in respect of unsecured loan availed from family members by treating it as unexplained cash credit u/s 68 of the IT Act 1961 without assigning valid reason and the reasons assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. 4. The assessee was called absent in this case. 5. The ld. Sr. DR, Ms. Ankush Kalra, took us through the brief factual matrix of the case. Order under section 153A of the Act for AY 2017-18 was passed by the Ld. AO on 31.12.2019. A search action under section 132 was conducted upon one LARA Group warrant of authorization was issued upon the assessee as well. The ld. AO had noted that the assessee had received unsecured loans of Rs.32,04,218/- from certain parties. The assessee did not furnish any confirmations qua the lending parties. As evident from para-4.4 of Page 2 of 7

ITA No.5312 & 5313/Del/2025

the assessment order, the ld. AO made addition of Rs.17,40,000/- holding as under:-

“….4.3 From the perusal of section 68 it is clear that the onus is on the assessee to offer explanation where any sum is found credited in the books of account and where the assessee fails to prove to the satisfaction of the Assessing Officer, the source and nature of the amount of cash credits, he is entitled to draw an inference that the credit entries represent income taxable in the hands of the assessee. It may also be mentioned that it is not the duty of the Assessing Officer to locate the exact source of the cash credits. The burden to identify the source lies upon the assessee and he is required to explain the genuineness of the credit entry. 4.4 In the instant case the assessee has failed to provide the confirmations in respect of the above mentioned entities. Hence, it is established beyond doubt that the liability shown by the assessee on account of unsecured loans received from Jhanweri Devi Banthia, Mehak Banthia, Seema Choudhary, Ashok Kumar Banthia HUF, Nimmy Jain and Sanjay Jain amounting to Rs. 17,40,000 /- is not genuine and it is unexplained credit in the books of the assessee, which is liable to be added in the income of assessee us 68 of the Income Tax Act, 1961, In view of the above discussion, addition amounting to Rs. 17,40,000/- is made in the income of the assessee u/s 68 of the Income Tax Act, 1961 being unexplained credit……” 6. The ld. Sr. DR, further informed that as the assessee failed to file requisite details, the ld. CIT(A) confirmed the addition to the extent of Rs.13,38,000/- and gave relief to the assessee of Rs.4,02,000/-.

7.

We have considered the facts of the case in the light of material available on records and arguments put forth by ld. Sr. DR. We have noted from para-8 on page-5 of the appellate order that the appellant had requested for admission of an additional ground of appeal challenging the legality of the order under

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ITA No.5312 & 5313/Del/2025

section 153A of the Act. The additional ground raised by the assessee is as under:-

8.

The appellant has requested for admission of additional ground on 04.03.2025 which is reproduced below:- "On the facts and in the circumstances of the case and in law the order passed u/s 153A of the Act by the Ld AO should be treated as illegal and bad in law as pursuant to search action u/s 132 of the Act no such incriminating documents/papers/materials were found and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under." 8. We have further noted from the order of the Ld. CIT(A) from pages 9 to 11 that the said additional ground has not been adjudicated by the ld. CIT(A). Accordingly, we are of the considered view that the appellate order deserves to be remitted back to the ld. AO for re-adjudication of assessee’s appeal considering the legal ground raised by it through the impugned additional ground. The order of the ld. CIT(A) is therefore set-aside with the directions to re-adjudicate the matter after considering the legal ground raised by assessee through the impugned additional ground. The ld. CIT(A) shall re-adjudicate the matter in accordance with law and after giving due opportunity of being heard to the assessee. It shall be bounden upon the assessee to comply with statutory notices issued by the ld. First Appellate Authority.

9.

In the result, the appeal of the assessee, vide ITA No.5312/Del/2025 for AY 2017-18 is allowed for statistical purposes.

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ITA No.5312 & 5313/Del/2025

ITA No.5313/Del/2025 for AY 2018-19

10.

Grounds of appeal raised by the assessee for Assessment Year 2018-19 are as under:-

1.

On the facts and in the circumstances of the case and in law the Hon'ble CIT(A) erred in not treating the order passed u/s 153A of the Act as illegal and bad in law as pursuant to search action u/s 132 of the Act no such incriminating documents/papers/materials were found and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. 2. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in confirming the addition of Rs.1,17,540/- made to the returned income by the Ld AO in respect of ignoring loss incurred and considering 8% of gross receipts being profit u/s 44AD of the Act as business profit without assigning valid reason and the reasons assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under. 11. We have noted again from para-8 on page-13 of the contested appellate order dated 19.06.2025 that the assessee had raised an additional ground qua illegal passing of order under section 153A. We have further noted from the appellate order that the additional ground of appeal remained unadjudicated. Consequently, the decision taken in ITA No.5312/Del/2025 for AY 2017-18 shall apply mutatis mutandis to this appeal also. The order of the ld. CIT(A) is therefore set-aside with the directions to re-adjudicate the matter after considering the legal ground raised by assessee through the impugned additional ground. The ld. CIT(A) shall re-adjudicate the matter in accordance with law and after giving due opportunity of being heard to the assessee. It Page 5 of 7

ITA No.5312 & 5313/Del/2025

shall be bounden upon the assessee to comply with statutory notices issued by the ld. First Appellate Authority,

12.

In the result, this appeal of the assessee for AY 2018-19 is allowed for statistical purposes.

13.

Finally, both the appeals of the assessee are allowed for statistical purposes.

Order pronounced in the open court on 15th January, 2026.

Sd/- Sd/- [SATBEER SINGH GODARA] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 19.01.2026 Shekhar Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi,

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