SHRI DAYAL AGARWAL,SILIGURI vs. D.C.I.T., CC - 4(4),, KOLKATA

ITSSA 85/KOL/2025Status: DisposedITAT Hyderabad19 November 2025AY 2015-201611 pages
AI SummaryAllowed

What were the facts?

The assessee, Shri Dayal Agarwal, filed an appeal before the Income Tax Appellate Tribunal (ITAT) against the order of the Commissioner of Income-tax (Appeals) for Assessment Year 2015-16. The appeal challenged additions made by the Assessing Officer (AO) and confirmed by the CIT(A) on account of unexplained investment under Section 69 of the Income-tax Act, 1961, amounting to ₹62,60,212. A search action under Section 132 was conducted on the assessee. The AO noted the purchase of two plots of land for ₹62,60,212, which was not reported in the assessee's return. The assessee claimed the investment was funded by his father, Shri Roshan Lal Agarwal, from his bank account. The AO treated it as unexplained investment, a view upheld by the CIT(A). The assessee also raised an issue regarding an addition of ₹38,25,073 under Section 56(2)(viib) concerning agricultural land, which was dismissed by the lower authorities. A legal issue regarding assessment under Section 153A based on material found during the search of another person without recourse to Section 153C was also raised.

What did the Tribunal hold?

The Tribunal held that the addition of ₹62,60,212 as unexplained investment under Section 69 was uncalled for. The Tribunal observed that the payments for the two plots of land were made from the bank account of the assessee's father, Shri Roshan Lal Agarwal, and were duly reflected in his balance sheet. Copies of the bank account and the father's balance sheet were available before the AO and CIT(A). The Tribunal found that both lower authorities failed to take correct cognizance of this evidence, which fully explained the investment. Therefore, the addition was deleted, and the appeal on this issue was allowed. Regarding the addition of ₹38,25,073 under Section 56(2)(viib), the Tribunal noted that the asset in question was agricultural land located outside 8 km of municipal limits. Following coordinate bench decisions in 'Mubark Gafur Korabu v. ITO' and 'Prem Chand Jain v. ACIT', the Tribunal held that agricultural land not qualifying as a capital asset falls outside the purview of Section 56(2)(viib). Thus, the addition was deleted, and the appeal on this issue was allowed. The legal issue concerning Section 153A assessment without invoking Section 153C was admitted but not adjudicated as the appeal was allowed on merits.

What were the issues?

1. Whether the addition of ₹62,60,212 as unexplained investment under Section 69 of the Income-tax Act, 1961, is justified when the assessee claims the funds were provided by his father from his bank account, and these investments were reflected in the father's balance sheet. - Assessee's contention: The investment was made from funds provided by his father, Shri Roshan Lal Agarwal, from his bank account, and these investments were reflected in the father's balance sheet. The addition is wrong and should be deleted. - Revenue's contention: Relied on the orders of the authorities below. 2. Whether the addition of ₹38,25,073 under Section 56(2)(viib) of the Act is sustainable when the asset in question is agricultural land not falling within the definition of a capital asset. - Assessee's contention: Agricultural land purchased by the assessee is not a capital asset, and therefore, Section 56(2)(viib) cannot be invoked. The addition should be deleted. - Revenue's contention: Relied on the orders of the authorities below. 3. Whether the addition made by the AO under Section 69 and Section 56(2)(vii)(b) of the Act, in an assessment framed under Section 153A, is bad in law and without jurisdiction for not taking recourse to Section 153C of the Act when the material was found during the search of another person. - Assessee's contention: The assessment under Section 153A based on material found during another person's search, without invoking Section 153C, is bad in law and without jurisdiction. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 69,Section 153A,Section 142(1),Section 139(1),Section 132,Section 271F,Section 276CC,Section 56(2)(vii)(b),Section 56(2)(viib),Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM

For Appellant: Shri Soumitra Choudhury, AR
For Respondent: Shri Raja Sengupta, DR
Hearing: 16.10.2025Pronounced: 19.11.2025

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Kolkata-27, (hereinafter referred to as the “Ld. CIT(A)”] dated 12.06.2025 for the AY 2015-16. 2. The issue raised in ground number 2, 3, 5 and 7, are against the order of ld. CIT (A) confirming the addition of ₹62,60,212/- as made by the ld. AO. on account of unexplained investment u/s 69 of the Income- tax Act, 1961 (the Act).

2.1.

The facts in brief are that search action was conducted on the assessee u/s 132 of the Act on 12-08-2015 and subsequent dates. Pertaining to state that assessee did not file any return of

The order continues below.

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