MUQEEM KHAN,SAHARANPUR vs. ITO-WARD-3(3)(3), SAHARANPUR

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ITA 327/DEL/2026Status: DisposedITAT Delhi11 February 2026AY 2019-203 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal decided both issues in favor of the assessee, granting partial relief. Regarding the addition of Rs. 11,25,400/- under section 69A, the Tribunal acknowledged the assessee's admitted trading in agricultural produce. However, it noted the assessee's failure to fully satisfy the lower authorities regarding the actual carrying out of these activities in the relevant year. Considering the assessee's socio-economic status, the Tribunal deemed a lump sum addition of Rs. 1,25,400/- to be just and proper, thereby granting the assessee relief of Rs. 10,00,000/-. This decision was made with the rider that it should not be treated as a precedent. For the cost of improvement, the Tribunal found that the assessee had not proven the cost of construction. Nevertheless, it considered a lump sum disallowance of Rs. 2,14,985/- to be appropriate in the given facts, providing the assessee with relief of Rs. 4,00,000/-. This was also stated to not be a precedent. No other grounds were pressed.

What were the facts?

The assessee, Muqeem Khan, filed an appeal for Assessment Year 2019-20 against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. The appeal challenged proceedings under section 147 read with sections 144 and 144B of the Income-tax Act, 1961. The core of the dispute involved an addition of Rs. 11,25,400/- made under section 69A, which was upheld by the lower appellate authority. The assessee also sought relief regarding the cost of improvement amounting to Rs. 6,14,985/- in the computation of his capital gains.

What were the issues?

1. Whether the addition of Rs. 11,25,400/- made under section 69A of the Income-tax Act, 1961, is justified, considering the assessee's admitted trading in agricultural produce and the acceptance of similar computations in preceding/succeeding assessments? (Question of law and fact) Assessee's contention: The assessee argued that his trading in agricultural produce was a legitimate activity and that his computation of income in this regard had been accepted in other assessment years. The addition made was therefore unwarranted. Revenue's contention: The revenue contended that the assessee had not been able to plead and prove his impugned trading activities as actually carried out in the relevant previous year to the satisfaction of the lower authorities. 2. Whether the disallowance of Rs. 6,14,985/- claimed as cost of improvement in the computation of capital gains is justified, given the assessee's inability to prove the cost of construction? Assessee's contention: The assessee sought relief for the cost of improvement amounting to Rs. 6,14,985/- in his capital gains computation. Revenue's contention: The revenue argued that the assessee had not been able to plead and prove the impugned cost of construction in the lower proceedings.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 144,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI

For Respondent: DR (Through
Hearing: 11.02.2026Pronounced: 11.02.2026

ORDER This assesseee’s appeal for assessment year 2019-20, arises against the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order No. ITBA/NFAC/S/250/2025-26/1082889899(1), dated 21.11.2025 involving proceedings under section 147 r.w.s. 144 read with section 144B of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.

2.

It transpires that during the course of hearing that the assessee/appellant raises his sole of substantive ground inter alia challenging both the Learned lower authorities relevant assessment lower appellate findings making section 69A addition of Rs. 11,25,400/- in assessment as upheld in the lower appellate discussion.

3.

That being case, it is noticed that the assessee/appellant herein has seen admittedly assessed his trader in agricultural produces the learned counsel has placed reliance on the corresponding computation duly accepted in preceding succeeding assessments; as case may be. The fact however remains that the assessee has not be able to plead and prove his impugned trading activities as actually carried out in the relevant previous year to the entire satisfaction on both the learned lower authorities. It is thus appropriate going by also admitted factual position leading his said the assessee’s socio economic status that a lump sum addition of Rs. 1,25,400/- would be just and proper with a rider that the same shall not be treated as a precedent. The assessee got relief of Rs. 10,00,000/- in other words.

4.

Learned counsel next seeks the relief of the assessee cost of improvement amounting to Rs. 6,14,985/- in computation of his capital gains. He could hardly dispute that assessee has not been seen also to plead and proved the impugned cost of construction in both lower proceeding. Be that as it may, this tribunal deems it proper that a lump sum disallowance of Rs. 2,14,985/- only in the given facts would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs. 4,00,000/- in other words. No other ground or argument has been pressed.

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