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Facts
The Assessing Officer (AO) made a protective addition of Rs. 46,12,28,028/- to the assessee's income based on information received regarding substantial credits in another individual's bank account. The AO believed the assessee played a role in these transactions and failed to provide adequate explanation.
Held
The Tribunal observed that a substantive addition of the same amount was confirmed in the case of Shri Naveen Kumar Goel, and no appeal was filed against that order. Consequently, the Tribunal deleted the protective addition made in the assessee's hands, deeming it unsustainable as it would amount to double addition.
Key Issues
Sustainability of a protective addition when the substantive addition of the same amount has been confirmed in another's case and no appeal was filed against that confirmation.
Sections Cited
147, 144, 148, 142(1), 143(2), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, C: NEW DELHI
Before: SHRI VIKAS AWASTHY & SHRI BRAJESH KUMAR SINGH
Assessee by Shri Shaantanu Jain, Adv. & Ms. Jahanvi Khanna, Adv. Revenue by Ms. Richa Gaharwar, CIT(DR) Date of Hearing 10.02.2026 Date of Pronouncement 10.02.2026 ORDER
PER BRAJESH KUMAR SINGH, AM,
This appeal by the assessee is directed against the order dated 06.06.2025 of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘Ld. CIT(A)] order dated 06.06.2025 arising out of the order dated 29.12.2018 passed under section 147 r.w.s 144 of the Income Tax Act, 1961 (hereinafter referred ITA No.- 4816/Del/2025 Manoj Saboo to as the ‘the Act’) by the Income Tax Officer, Ward 58(2), New Delhi-110002 (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (AY) 2011-12.
Ground nos. 1 to 5 of the appeal are not pressed by the assessee and are, therefore, dismissed as not pressed.
Brief facts of the case: The AO had received information from the DDIT (Inv) Unit-4, Investigation Wing vide letter F.No. 03/DDIT (Inv) /Unit-4(1)/2017-18/190 dated 09.03.2018 that the following credits were made in the Bank account of Shri Amit Gupta (PAN AJTPG0879R). The details of the credits are as under: A/c No. Credits during the F.Y. 2010-11 629105045642 Rs., 40,58,33,164/- 031605001322 Rs. 4,10,14,664/- 031605001336 Rs. 1,43,80,200/- Total Rs. 46,12,28,028/- 3.1 On the basis of the said information, the assessment was re-opened vide notice u/s 148 of the Act, dated 30.03.2018. The AO issued notice u/s 142(1) of the Act as noted in para 2 of the assessment order which according to the AO were not complied. The AO noted that the assessee filed objections vide letter dated 17.12.2018, which were disposed of by the AO vide letter F.NO. ITO Ward 58(2)/148/2018-19/1647 dated 27.12.2018. The AO also noted that the assessee submitted ITR online on 24.12.2018 which was placed on record but no Notice u/s 143(2) of the IT Act, 1961 was issued, as the AO observed that the assessee had not e-verified the return till the time of passing of assessment order. According to the 2 ITA No.- 4816/Del/2025 Manoj Saboo AO since the assessee had not e-verified, its return of income hence the same could not be taken as valid return in response to notice u/s 148 of the IT Act, 1961. The AO discussed about the modus operandi of the assessee’s transactions and the explanation furnished by the assessee. Thereafter, the AO made a ‘protective addition’ of Rs. 46,12,28,028/- in the hands of the assessee, after noting that substantive addition of the aforesaid amount was made in the case of Shri Naveen Kumar Goel. The relevant extract of the findings of the AO in para 7.1 of the order is reproduced as under:
7.1 After considering the facts and circumstances as discussed above, alongwith statement of Shri Naveen Kumar Goel and Shri Manoj Saboo, Investigation report and DRI report, it can be concluded that Shri Naveen Kumar Goel was mastermind of the syndicate, but the role of Shri Manoj Saboo cannot be denied, as he was the one who used to bring money from various parties. Both have failed to provide details of name, address, PAN, Amount, genuineness of transactions for amount reflecting in banks of JMB International Prop. Amit Guta. It is clear both Shri Naveen Kumar Goel and Shri Manoj Saboo are hands in glove, but now they are not cooperating in assessment proceedings by submitting details as asked from them. Inspite of specific query, assessee has failed to substantiate the source of deposit, hence it is concluded that assessee has nothing to say in the matter. In absence of documentary evidences and justification and relying upon the show cause notice issued, addition of Rs 46,12,28,028/- is has been made in the hands of Shri Naveen Kumar Goel on Substentative basis and Rs. 46,12,28,028/- is being made in the hands of Shri Manoj Saboo on protective basis.” (emphasis supplied by us)
Aggrieved with the said order, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal of the assessee. The relevant extract of the order in para no. 6.7 of is reproduced as under:
ITA No.- 4816/Del/2025 Manoj Saboo “6.7 The protective addition made by the AO in the case of appellant of Rs.46,12,28,028/- was on the basis of facts gathered during the DRI search proceedings and investigation by the Investigation Wing of the Income-tax Department where conclusive finding has been made that the appellant and Shri Naveenkumar Goyal played an active role in depositing the cash in the bank accounts maintained in the name of Shri Amit Gupta. However, the said individuals failed to provide any details like name, address, PAN, amount and genuineness of the transaction for an amount reflecting in bank accounts of M/s. JMB International. Thereby Shri Naveenkumar Goel and Manoj Saboo has acted as hands in glove and not co-operating during the proceedings before AO in identifying the unaccounted cash deposits which were made by them in the bank accounts of Shri Amit Gupta, Prop. of JMB International. Hence, the appellant and Shri Naveenkumar Goel failed to prove the source and genuineness of the transactions which they have made in the bank accounts of Shri Amit Gupta, Prop. of JMB International. In view of that the addition made by the AO on protective basis in the hands of the appellant of Rs.46,12,28,028/- is hereby sustained. Ground of appeal nos. 7 to 14 and 16 to 19 are therefore, dismissed.” (emphasis supplied by us)
5. Aggrievd with the said order, the assessee is in appeal before us on the ground nos. 6,7, and 8, which are reproduced as under: “6. Because the action is being challenged on facts and law in not appreciating our submission and confirmed protective addition of Rs. 46,12,28,028 on the basis of the report of investigation wing who has never provided an opportunity to the appellant before taking action against him. The said addition has been made on the basis of conjectures and surmises without considering the submission made. Hence the addition of Rs. 46,12,28,028 is bad in law and liable to be deleted.
ITA No.- 4816/Del/2025 Manoj Saboo 7. Because the action is being challenged on facts and law for making Protective addition of Rs. 46,12,28,028 on the basis of show cause notice issued by DRI and the statement recorded by DRI which was subsequently retracted by the assessee and the cross examination of statement of the few persons is also pending before Hon'ble Commissioner Customs Adjudication.
Because the action is being challenged on facts and in not providing the copy of statement recorded of Mr. Naveen Kumar Goyal/Anuj Gupta whose statements Deptt. is relying without providing an opportunity to cross examine him and made a protective addition as well as substantive addition based on their statements.”
At the time of hearing before us, the Ld. AR submitted that the addition of Rs. 46,12,28,028/- which was added on substantive basis in the case of Shri Manoj Saboo (PAN -AMAPK1410A) has already been confirmed in the case of Shri Naveen Kumar Goel, by an order dated 21.08.2023 by the Ld. CIT(A)/ NFAC vide DIN & order no. ITBA/NFAC/S/250/2023-24/1055288928(1) against which no appeal has been filed and thus the said order has become final as on date. In the light of these facts, it was submitted that the addition of Rs. 46,12,28,028/- made on a ‘protective basis’ in the hands of the assessee be deleted, as it amounts to double addition. 6.1 In this regard, a report was called for from the Department regarding the status of the appeal in the case of Sh. Naveen Kumar Goel, in view of the above facts as ITA No.- 4816/Del/2025 Manoj Saboo submitted by the assessee. The report of the AO (ITO), Ward 61, New Delhi, in response to the e-mail dated 05.02.2026 of the CIT(DR) is reproduced as under:
We have heard both the parties and perused the material available on record. In the present case, it is seen that, as on date, the Ld. CIT(A) has confirmed the addition of Rs. 46,21,28,028/- in the case of Sh. Naveen Kumar Goel, where the said amount was added on a ‘substantive basis’. Therefore, in the given facts of the case, since the aforesaid amount has been added and confirmed on a ‘substantive basis’ in 6 ITA No.- 4816/Del/2025 Manoj Saboo the case of Shri Naveen Kumar Goel, against which no appeal has been filed by Sri Naveen Kumar Goel, the protective addition of Rs. 46,12,28,028/- made in the hands of the assessee, i.e., Shri Manoj Sahook, cannot be sustained. Accordingly, we delete the addition of Rs. 46,12,28,028/-.
8. Ground Nos. 6, 7 and 8 are allowed to this extent and other issues raised in the said grounds become academic and are left open in this case.
The AO in the assessment order noted that Shri Naveen Kumar Goel admitted that Shri Amit Gupta was his employee and his bank account was used by Sri Naveen Kumar Goel and Shri Manoj Saboo. The AO further noted that in the DRI Report Shri Manoj Saboo had admitted that he got commission of Rs. 0.35 per US $ to remit the same of foreign accounts and that he started collecting money from Shri Ashish Jain and gave the same to Shri Naveen Kumar Goel; that they used to receive commission of Rs 0.35 per dollar out of which he used to give Rs 0.20 per US $ out to Shri Naveen Kumar Goel. Further, the AO noted that it was clear by this that Shri Manoj Saboo used to retain Rs 0.15 per US $ with him. Therefore, vide show cause letter dated 24.12.2018 the AO asked the assessee to explain why addition Rs. 15,00,000/- i.e. 0.15 paisa of total US$ remitted abroad should not be added as commission income in the hands of the assessee. The AO noted that total US$ remitted are one crore (approx) Rs. 46.12/dollar approx. The relevant extract of the order of the AO is reproduced as under:
ITA No.- 4816/Del/2025 Manoj Saboo “ 9.1 During the year under consideration, assessee has remitted Rs. 46,12,28,028/- from the bank account of Shri Amit Gupta Prop of JMB International which are approx. US$ 1 crore by applying average rate of US$ at Rs 46.12 per dollar. Total commission was Rs 0.35 per US$ for remitting amount outside India, in DRI both Shri Naveen Kumar Goel agrees at Re 0.20 per dollar was meant for him, and Re 0.15 per US$ for meant for Shri Manoj Saboo. It is clear that Shri Manoj Saboo has failed to disclose a sum of Rs 15,00,000/- (0.15 X 1,00,00,000US$) in his return of income. He has admitted this in DRI and income tax also. Hence after relying upon the show cause notice and facts and circumstances of this case, I have left with no other alternative but to make add Rs 15,00,000/- to the income of the assessee.”
Aggrieved with the said order, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal by observing in para 6.8 of the order, which is reproduced as under: “6.8 In ground of appeal no.15 appellant is agitated against the addition made by the AO of Rs. 15,00,000/- on the basis of show cause notice issued by DRI and statement recorded by DRI without appreciating appellant's reply to show cause notice. The appellant's main contention was that statements recorded by the DRI were retracted by the appellant and his associates and there is no basis for the averments made in those statements. Further appellant also contended that the show cause notice issued by DRI was pending before Hon'ble Commissioner of Customs, Adjudication, New Delhi, hence the addition of Rs.15 lakhs based on the findings of show cause notice is bad in law and liable to be deleted. However, on perusal of the assessment order, not only before DRI proceedings the appellant and his associates stated the same facts before Investigation Wing of the Income-tax Department as well as AO during the assessment proceedings. During these proceedings, the crucial facts of commission charged by Shri Naveenkumar Goel was Rs.0.20 per US dollar and by Shri Manoj Saboo was at Rs.0.15 per US dollar has been arrived. Accordingly, AO has calculated the commission income earned by the appellant and made addition of RS.15 lakhs and I didn't find any error by AO in this regard. The contention of the appellant considering the above facts is hereby rejected. The ground of appeal of the appellant no. 15 is hereby dismissed.
Aggrieved with the said order, the assessee is in appeal before us on the following ground of appeal:
ITA No.- 4816/Del/2025 Manoj Saboo “9. Because the action is being challenged on facts and law for making addition of Rs. 15,00,000 on the basis of show cause notice issued by DRI and the statement recorded by DRI which was subsequently retracted by the assessee and the cross examination of statement of the few persons is also pending before Hon'ble Commissioner Customs Adjudication.
However, at the time of hearing before us, the Ld. AR did not make any submissions in respect of Ground No. 9.
On the other hand, the Ld. CIT(DR) supported the orders of the authorities below.
We have heard the rival submissions and perused the material available on record. In view of the facts brought on record by the AO and affirmed by the Ld. CIT(A), which have not been contested by the Ld. AR, we find no reason to interfere with the order of the Ld. CIT(A). Accordingly, the order of the Ld. CIT(A) sustaining the addition of Rs. 15 lakhs is upheld, and Ground No. 9 of the appeal is dismissed.
In the result, appeal of the assessee is partly allowed. Order pronounced in the open court on 10th February, 2026.