VIPUL CHANDAK,ALIGARH vs. ACIT CIRCLE-4(1)(1), ALIGARH

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ITA 303/AGR/2026Status: DisposedITAT Dehradun27 October 2026AY 2018-1912 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the additional evidence filed by the assessee in respect of sundry creditors, namely the ledger accounts for the immediate subsequent year, was admitted in the interest of justice due to a substantial cause for not filing it before the lower authorities. The Tribunal also noted that the assessee's submissions regarding the cost of construction for capital gains, supported by the balance sheet for FY 2006-07 (AY 2007-08), and the fact that the addition of Rs. 25,84,000/- on account of cash deposit was also made in the assessment order of the assessee's husband, were not adequately dealt with by the CIT(A). Furthermore, the factual verification required for the sundry creditors issue, for which additional evidence was admitted, necessitated a fresh examination. Consequently, in the interest of justice, the Tribunal set aside the order of the CIT(A) and restored the matter to the file of the AO for a fresh assessment in respect of the issues confirmed or partly confirmed by the CIT(A) that were under appeal. The AO was directed to admit the additional evidence during the fresh assessment proceedings. All grounds of appeal were allowed for statistical purposes.

What were the facts?

The assessee, Vipul Chandak, filed an appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Year 2016-17. The original assessment was completed under Section 144 of the Income Tax Act, 1961, at a total income of Rs. 4,25,60,840/-, significantly higher than the declared income. The CIT(A) had partly allowed the assessee's appeal, deleting some additions and reducing others. The additions confirmed or partly confirmed by the CIT(A) related to estimated net profit from export business, cash deposits in a savings bank account, long-term capital gains, and sundry creditors. The assessee challenged these confirmations and partial confirmations before the Income Tax Appellate Tribunal (ITAT). The ITAT admitted additional evidence filed by the assessee concerning sundry creditors and noted that certain aspects of the assessee's submissions regarding construction cost for capital gains and cash deposits in the husband's account were not adequately considered by the CIT(A).

What were the issues?

1. Whether the CIT(A) erred in partly confirming the addition on account of estimated net profit from export business, restricting it to 8% of gross turnover instead of the 4% declared by the assessee, especially when books of accounts were audited and no defects were pointed out by the Assessing Officer (AO)? (Section 145(3)) 2. Whether the CIT(A) erred in partly confirming the addition on account of long-term capital gains by not considering the improvement cost declared by the assessee with documentary evidence, including valuation reports and balance sheets from earlier years? (Section 48, Section 2(14)) 3. Whether the CIT(A) erred in confirming the addition on account of cash deposits in the assessee's savings bank account, particularly Rs. 10,45,000/- withdrawn from a partnership firm and Rs. 25,84,000/- deposited in her husband's account, which was also added in his assessment? (Section 69A) 4. Whether the CIT(A) erred in confirming the addition on account of sundry creditors, despite the assessee providing ledger accounts and PAN details during appellate proceedings? Assessee's Contentions: - The estimation of profit by the AO and CIT(A) was arbitrary and without comparable cases, as audited books of accounts were filed and accepted. - The CIT(A) failed to consider improvement costs and development expenses for long-term capital gains, supported by documentary evidence. - The cash deposit of Rs. 10,45,000/- was explained as withdrawal from a partnership firm, and the Rs. 25,84,000/- deposit in the husband's account was a double addition as it was already taxed in his hands. - Sundry creditors were genuine, with ledger accounts and PANs furnished. - The matter should be set aside to the AO for fresh assessment. Revenue's Contentions: - The learned Sr. DR supported the orders of the authorities below and opposed the filing of additional evidence at this stage.

Which sections of the Income-tax Act were involved?

Section 145(3),Section 48,Section 2(14),Section 69A,Section 144,Section 250,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA (DB

Before: SHRI SUNIL KUMAR SINGH & SHRI BRAJESH KUMAR SINGH

For Appellant: Shri Pankaj Gargh, Advocate
For Respondent: Shri Anil Kumar, Sr. DR
Hearing: 01.09.2026Pronounced: 27.10.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (DB) BENCH, AGRA BEFORE: SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER

ITA No. 303/Agr/2026 Assessment Year: 2016-17 Vipul Chandak, Vs. ACIT, Circle 4(1)(1), Jaiganj, Aligarh (UP)-202001 Income Tax Office, Marris Road, Aligarh – 202001 PAN :AAMPC6596P (Appellant) (Respondent) Assessee by Shri Pankaj Gargh, Advocate Department by Shri Anil Kumar, Sr. DR Date of hearing 01.09.2026 Date of pronouncement 27.10.2026 ORDER PER : BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER: This appeal is directed against the impugned order dated 13.02.2026 passed in appeal No. CIT(A) Aligarh/10212/2018-19 by the ld. Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (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. 2016-17, wherein ld. CIT(A) has partly allowed the assessee’s appeal.

ITA No.303/Agr/2026

2.

Brief facts of the case: The return of income was filed on 08.10.2016 declaring total income of Rs.23,20,710/- and agricultural income of Rs.42,500/-. The case was picked up for scrutiny under CASS and the assessment was completed u/s. 144 of the Act vide order dated 10.12.2018 at a total income of Rs.4,25,60,840/-. The nature of additions made by the AO in the assessment order and the decision of the Ld. CIT(A) in respect of the said additions is tabulated as under: Sl. No. Description Amount Decision of the Ld. CIT(A) (i) Net profit estimated @ 11,06,200/- The Ld. CIT(A) reduced 10% of gross turnover the net profit estimated by (from export business) the AO @ 10% to 8% and of Rs. 1,96,21,505/- at directed the AO to Rs. 19,62,150/- less recompute the business already shown by the income accordingly. assessee Rs. 8,55,950/- i.e. net addition- Rs. 11,06,200/- (ii) Income from other 15,32,412/- Deleted by the Ld. CIT(A) sources as duty drawback (iii) Interest income 30,255/- Deleted by the Ld. CIT(A) (iv) Claim of exemption 1,50,00,000/- Deleted with the denied observation that the same has been considered while computing the long-term capital gains and it would amount to double taxation of the same receipt. (v) Cash deposit in Saving 36,29,000/- Confirmed by the Ld. Bank a/c of assessee CIT(A) (vi) Income from Long term 1,50,00,000/- Reduced to Rs. capital gain 83,30,752/- (vii) Income from house 2,00,000/- Deleted by the Ld. CIT(A) property (viii) Sundry creditors 37,42,265/- Confirmed by the Ld. CIT(A)

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3.

In respect of the above items confirmed/ partly confirmed by the learned CIT(A) at Sr. No(i) (v)(vi) and (viii) as above, the assessee has filed an appeal before us on the following grounds of appeal: “1. Because the Ld. CIT (A), NFAC, Delhi has wrongly, illegally and arbitrarily partly confirmed the order passed u/s 144/147 by the JAO, Aligarh. 2. Because the Ld. CIT (A) has wrongly, illegally and arbitrarily restricted net profit @ of 8% amounting to Rs.15,69,720/- on total turnover of Rs.1,96,21,505/- on estimate basis as against of 4% amounting to Rs.8,55,950/- already shown by the assessee. 3. Because the Ld. CIT (A) has erred both on facts and in law in ignoring that the books of accounts were audited and balance sheet, profit and loss accounts etc. were filed along with the return and were opened for verification. 4. Because the Ld. CIT (A) has erred both on facts and in law in not considering that neither the remand notice issued by the JAO, if any, served on the assessee nor remand report issued by the ld. CIT(A) for confrontation. 5. Because the Ld. CIT (A) has wrongly, illegally and arbitrarily restricted the capital gain Rs.83,30,752/- and not considered the improvement cost Rs.67,62,078/- declared by the assessee with documentary evidences. 6. Because the Ld. CIT(A) has erred both on facts and in law in not considering that the assessee has purchased the agriculture land with her husband long back in 2004 and thereafter land is developed year to year and expenses incurred on improvement Rs.32,46,548/- in FY.2006-07 (indexed cost Rs.67,62,078/- in AY 2016-17) and documentary evidences such as ITR and balance sheet for AY 2007-08 were filed during the course of appellate proceedings. 7. Because the Ld. CIT(A) has erred both on facts and in law in not considering the valuation report of the registered valuer filed during the course of appellate proceedings. 8. Because the Ld. CIT (A) has wrongly, illegally and arbitrarily confirmed cash deposits Rs.36,29,000/- in HDFC Banks, duly explained during the appellate proceedings with documentary evidences. 3 | P a g e

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9.

Because the Ld. CIT (A) has erred both on facts and in law in ignoring that the cash withdrawn Rs.10,45,000/- from her capital account with M/S Chandak Brothers, wherein, she is partner and deposited in HDFC Bank Account No.00431530008011 and bank statement and capital account filed during the course of appellate proceedings, itself clinching evidence that Rs. 10,45,000/- were deposited from the known sources. 10. Because the Ld. CIT (A) has erred in confirming that cash deposit Rs.25,84,000/- in HDFC Bank Account No.1669130004004 was in the name of Shri Deepak Chandak, husband of the assessee and addition of Rs.25,84,000/- has already made in his case by the same AO and thus double addition made in the hands of the appellant. The appellant was joint holder therein and nothing to do with the cash deposited in the said account. 11. Because the Ld. CIT (A) has erred both on facts and in law in confirming the addition of Rs.37,42,265/- Sundry Creditors shown in the balance sheet and their ledgers accounts and PAN furnished during the course of appellate proceedings. 12. Because the Id. AO has erred in not considering that the assessee has business transactions with various parties and goods purchased and payments made to them duly reflected in their respective account and closing balance shown in the balance sheet outstanding. 13. Because the Ld. CIT (A) has erred both on facts and in law in ignoring the various court rulings were quoted in written submissions during the appellate proceedings in support of her contention. 14. Because considering the facts of the case and the legal position the additions made by the Assessing Officer should have been deleted. The Ld. CIT (A) has arbitrarily erred in confirming the same. 15. Because the appellant craves to add amend alter modify or delete any or all of the grounds of appeal before or at the time of hearing.”

4.

During the course of hearing, the assessee filed a synopsis (page No. 1 to 4 of the paper book) and an application under Rule 29 of the 4 | P a g e

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Income Tax Appellate Tribunal Rules, 1963 for admission of additional evidence (page No. 5 to 6 of the paper book). The synopsis and application under Rule 29 of the ITAT Rules, 1963 filed by the assessee are reproduced as under: “SYNOPSIS 1. Assessment order in the present case has been passed Ex- Parte. In the absence of the compliance to be made, the Assessing officer has made various additions, some of which has been confirmed by Ld. CIT (A) against which the present appeal is before Hon’ble ITAT. 2. Ground No 2, 3 & 4 (Estimation of profit) Kind reference is invited to Page 5 & 6 of Assessment Order. Since, the Assessment Order has been passed Ex-parte, the Assessing Officer has applied the provisions of section 145 (3) and have estimated profit by applying profit rate of 10 % on declared Turnover as against declared NP rate of 4.36% thereby making addition of Rs 11,06,200/- under the head business income. Ld. CIT(A). Kind reference is invited to page 8 & 9 of Appellate Order. Ld. CIT (A) has restrict the estimation of profit at 8 % as against 10% applied by AO. Submission: - The estimation of Ld. CIT (A) and of the AO is purely arbitrary and on the own presumption without citing any comparable case. The declared turnover has been accepted. Books of accounts were duly audited and Tax Audit Report along with Financial Statements were duly filed along with the ITR filed for the year. No defects or discrepancy has been pointed out in the Audited Financial Statements. Re:- Ground no. 5,6 & 7 (Addition under the head Long Term Capital Gain)

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Kind reference is invited to Page 8 Para 8 of the Assessment Order. Entire sale consideration of RS 1,50,00,000/- has been added without deducting Index cost of acquisition. Ld. CIT(A) Kind reference is invited to Page 14 para 5.7.2 of the Appellate Order. As per the working given in Appellate Order, the Ld. CIT (A) computed Long Term Capital Gain at Rs 83,30,752/- as against Rs 1,50,00,000/- added by the AO. Submission: - At the time of filing the original return the assessee was advised that the land sold is agricultural Land and is not a Capital Asset in terms of section 2(14) of I. T. Act and hence there is no liability of tax on the sale. During the course of Appellate proceedings, the counsel who prepared the appeal advised the assesse that on the impugned agricultural land sold, long term capital gain has to be paid and hence a revised computation of income was filed in which the Long Term Capital Gain was worked out at Rs 51,90,170/-. Kind reference is invited to the revised computation. A chart is attached giving the working of Long Term Capital Gain shown at Rs 51,90,170/-. Cost of Acquisition is proved from the working given in the chart. In support of the improvement cost claimed of FY 2006 – 07, copy of Balance Sheet of the Assesse as on 31.03.2007 is attached in which construction & development cost for FY 2006 – 07 is shown at Rs 32,46,548/-. The Balance Sheet and Profit & Loss Account was filed along with the return for AY 2007 – 08 as in that year the assesse was carrying on business as proprietor in the name of M/s Vipul Alloys. Re:- Ground No 8 , 9 & 10 (Addition of Rs 36,29,000/- being the amount of cash deposited in Saving Bank Account) Kind reference is invited to page 8 para 7 of Assessment Order. Ld. CIT (A) Ld. CIT (A) confirmed the same. Page 18 Para 5.8.3.

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Submission: - Kind reference is invited to written reply before Ld. CIT (A). The assesse only deposited Rs 10,45,000/- is his saving bank account during FY 2015 – 16. The source of the same was explained to be out of cash withdrawn from Partnership Firm M/s Chandak Brothers in which the assesse is partner. Copy of ledger account was also filed. As regards balance cash of Rs 25,84,000/- The same has been deposited in the bank account of her husband Mr. Deepak Chandak. In support of the same, copy of bank statement of Deepak Chandak with HDFC bank is attached. Moreover, the Assessment of Deepak Chandak was also completed u/s 143(3) by the Assessing Officer. Addition of Rs 25,84,000/- has been made in the case of Deepak Chandak. Ld. CIT (A) is pending. Re:- Ground no. 11 & 12 (Addition of Rs 37,42,265/- being the amount of sundry creditors appearing in the Balance Sheet) Kind reference is invited to Page 10 Para 10 of the Assessment Order. Entire sundry creditors appearing in the Audited Balance Sheet has been added. Ld. CIT (A) Kind reference is invited to Page 23 Para 5.10.3 of the Appellate Order. Ld. CIT (A) confirmed the same. Submission: - Kind reference is invited to written reply filed before Ld. CIT (A). The nature of business of assesse is export of hardware. For each and every sundry creditor the submission has been filed along with their respective ledger accounts, complete address and PAN is mentioned on the ledger account. To further prove the sundry creditors to be genuine, copy of ledger account of subsequent years are enclosed to show that outstanding balances has been re-paid in most of the cases or has been reduced.

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It is prayed that the present appeal be allowed and the addition confirmed by Ld. CIT (A) be deleted.” APPLICATION UNDER RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 FOR ADMISSION OF ADDITIONAL EVIDENCE Before, The Hon’ble Members Income Tax Appellate tribunal Agra Bench Re: - ITA No. 303/AGR/2026 for AY 2016 – 17 Vipul Chandak, Aligarh Sir’s, The Appellant most respectfully submits as under: 1. That the present appeal has been filed by the Appellant against the order passed by the Ld. CIT (A) dated 13.02.2026 for the Assessment Year 2016 – 17. 2. There are multiple issues in the present appeal. One of the issue is regarding addition of Rs 37,42,265/- being the amount of sundry creditors appearing in the Balance Sheet. 3. Before lower Authorities the assesse filed the ledger account of the sundry creditors for AY 2016 – 17. 4. Further to support the submission that the sundry creditors are regular and genuine business transaction, copy of ledger account of these sundry creditors for AY 2017 – 18 are attached in the paper-book for the first time before this Hon’ble Tribunal under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963. 5. Details of Additional Document: Ledger Accounts of Sundry creditors for AY 2017 – 18 6. That the aforesaid document is important and relevant for the proper adjudication of the issue involved in the present appeal and go to the root of the matter. 7. That the Appellant could not produce the said documents earlier due to substantial cause, for the reason that the appellant engaged the counsel for submission before ITAT who advised to file ledger account of sundry creditors of immediate subsequent year. 8. That the admission of this document is necessary in the interest of justice and for a just and fair decision of the case.

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9.

That no prejudice will be caused to the Respondent if the additional evidence is admitted, as the Respondent will have full opportunity to examine and rebut the same. 10. That this Hon’ble Tribunal has the power to admit additional evidence under Rule 29 where it is necessary for deciding the appeal or for any other substantial cause. PRAYER In view of the above facts and circumstances, it is most humbly prayed that this Hon’ble Tribunal may kindly: a) Admit the additional document as listed above; b) Pass such other order(s) as this Hon’ble Tribunal may deem fit in the interest of justice.” 4.1 The learned AR submitted that the additional evidences filed may kindly be admitted and also submitted that the learned CIT(A) has not appreciated the submissions and the evidences filed before him and therefore, requested that the matter may be set aside to the file of the AO for fresh assessment. 5. On the other hand, learned Sr. DR supported the orders of the authorities below and opposed the filing of the additional evidences at this stage. 6. We have heard both the parties and perused the material on record. Regarding the additional evidences in respect of addition of Rs.37,42,265/- under the head ‘sundry creditors’, the assessee submits that under the advice of the present counsel engaged for arguing the case before this Tribunal, the assessee has filed the ledger account of sundry creditors for immediate subsequent year in support of his claim of 9 | P a g e

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the genuineness of the sundry creditors. We are satisfied that in the interest of justice the same needs to be admitted and due to the earlier counsel, the said documents were not produced before the lower authorities, which constitutes sufficient cause for not filing the same before the lower authorities. Therefore, we admit the same.

6.1 Regarding other additions confirmed by the learned CIT(A), the Ld. AR submitted that in respect of estimated addition the books of accounts of the assessee were audited and no defect was pointed out by the AO in them and therefore, the rejection of the books of accounts and estimation of profit was not justified by the AO. In respect of addition under the head long term capital gains, the Ld. AR submitted that the claim of cost of construction and development cost amounting to Rs.32,46,548/- in respect of the land sold was shown in the balance sheet of the assessee for F.Y. 2006-07 relevant to A.Y. 2007-08 (placed at page no. 53 of the paper book), which was not considered by the learned CIT(A). Further, regarding the cash deposit, it was submitted that the assessee deposited only Rs.10,45,000/- in her savings bank account and the source of the same was explained to be out of cash withdrawn from the partnership firm, M/s. Chandak Brothers, in which the assessee is a partner and copy of ledger account was also filed which was not considered by the Ld. 10 | P a g e

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CIT(A). Regarding the balance cash of Rs.25,84,000/-, it was submitted that the same was deposited in bank account of her husband Mr. Deepak Chandak and further, it was submitted that in the assessment order of Shri Deepak Chandak u/s. 143(3) of the Act, the addition of Rs.25,84,000/- was also made.

6.2 The above submissions made by the assessee before us has been carefully considered by us. The assessee in support of cost of construction amounting to Rs.32,46,548/- in respect of the asset sold has filed the balance sheet for F.Y. 2006-07 relevant to A.Y. 2007-08 (placed at page no. 53 of the paper book) which appears to have not dealt by the Ld. CIT(A) while rejecting the said claim. Further, the new fact that in the assessment order of Shri Deepak Chandak u/s. 143(3) of the Act, the addition of Rs.25,84,000/- on account of cash deposit has also been made which has not been considered by the Ld. CIT(A). Further,in respect of the addition in respect of sundry creditors, we have already admitted the additional evidences filed by the assessee which requires factual verification. Therefore, in view of the above facts, the submissions made by the assessee in respect of the issues raised by the assessee in this appeal requires a fresh examination. Therefore, in the interest of justice, we deem it fit that the assessee may be provided one more 11 | P a g e

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opportunity to explain his case before the AO, since the issues require factual verification. We, therefore, set aside the order of the learned CIT(A) and restore the matter to the file of the AO for fresh assessment in respect of the issues confirmed/partly confirmed by the learned CIT(A) for which the assessee is in appeal before us, after giving reasonable opportunity of being heard to the assessee and in accordance with law. As stated above, the additional evidences filed by the assessee are admitted and the AO is directed to admit the same during the fresh assessment proceedings. All the grounds of appeal are allowed for statistical purposes. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 27/ 10/2026.

Sd/- Sd/- (SUNIL KUMAR SINGH) (BRAJESH KUMAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 27/10/2026 *aks/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra

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