INCOME TAX OFFICER , NEW DELHI vs. UDAY KUMAR , DELHI

- 6. Aggrieved with the above order, assessee preferred an appeal before NFAC, Delhi and raised several grounds of appeals and filed the detailed submissions. The submissions of the assessee are reproduced at page 4 to 13 of the appellate order. - 7. After considering the submissions of the assessee Ld. CIT(A) observed that assessee was under employment with M/s Earth Infrastructures Ltd. (EIL) (the "holding company") during the year under consideration. Assessee was drawing salary from EIL. However, as per the information available with the department, in case of ABPL (the "subsidiary company") which was based on the report of Resolution Professional filed in NCLT that it has taken huge money from investors and the assessee was the Manager. - 8. It was submitted that due to recession in the real estate market, EIL has removed several staffs and also came up with scheme to release pending salary dues from EIL and other subsidiary companies in lieu, of offering some posts in other subsidiary companies, in turn got some documents signed from employees labeling that as an internal process, on 17.10.2016, assessee resigned from subsidiary company and informed to the Board of Directors for the reason that he has not received any salary from the subsidiary companies. However, he also resigned from the holding company vide letter dated 09.05.2017 and the same was

confirmed by the HRD Team on 10.05.2017. In the year 2019, assessee received summons from the office of Registrar of companies for mismanagement in subsidiary company in his capacity of Manager as per the Companies Act 2013, and it was submitted that he was not holding any position in the decision-making process.

- 9. Further, Ld. CIT(A) observed from the submissions of the assessee, that ABPL has received amount of Rs.59,18,00,000/- as per the assessment order and the period mentioned as assessment year 2015-16, at the time assessee was not an employee (he was appointed on 25th July 2016 that too in fiduciary capacity from Assessment year 2017-18). He observed that the main contention of the assessee that he never collected Rs.59,18,00,000/- from anyone. - 10. Further he observed from the submissions of the assessee that neither EIL nor ABPL has filed any FIR against the assessee till date and also not taken any steps to recover the amount alleged to have been collected from the investors, it shows that assessee has not collected the money from investors on behalf of the company. - 11. Further the assessee has submitted that Assessing Officer has never furnished details of 636 investors from whom assessee was alleged to have been collected the amount, not specified the date of collection and mode of collection and also not identified any Bank account in which

such amount was deposited by him. Ld. CIT(A) considered the following documents from the assessee, copy of resignation letter as Manager from ABPL, copy of letter from EIL confirming the resignation of the assessee, copy of Email sent to ROC, Delhi on 21-12-2018 in which assessee has informed that he has resigned from the post of Manager, Form No. DIR-12 filed before ROC, also copy of writ petition filed by the assessee.

- 12. After considering the above documents, a remand report was calledfrom Assessing Officer on 21.11.2023 forwarding documents filed by the assessee. The Assessing Officer has not submitted any report till the completion of the appellate proceedings. Ld. CIT(A) has reproduced the letter sent to the Assessing Officer in the impugned order. Since, the Assessing Officer has not brought on record, information collected during the assessment proceedings and enquiries conducted by him, Ld. CIT(A) also issued some letters to the assessee to furnish certain information, even the assessee had not filed the relevant information called for. - 13. After considering the information available on record, he observed that assessment order was very brief on facts, Assessing Officer failed to furnish remand report, clarification report called for from the assessee, even assessee failed to furnish information as called for, he further verified the information collected by the Assessing Officer during assessment proceedings and information submitted by the assessee.

Assessing Officer on account of unexplained money u/s 69A of the Act in the hands of the assessee cannot be sustained. Accordingly, he directed the Assessing Officer to delete the addition.

- 15. Ld. DR brought to our notice the above facts on record and he also brought on record the relevant grounds of appeal raised by the revenue:- - 1. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the addition of Rs.59,18,00,000/ u/s 69A of the Income Tax Act, 1961 ("the Act"), ignoring the facts that the assessee could not brought on record any cogent documents/proof to negate the information available with the assessing officer that the assessee had received unaccounted money for Rs. 59,18,00,000 in M/s Aurochem Buildprop Private Ltd from 636 investors. Moreover, the assessee had not submitted supporting evidence in respect of the same. - 2. On the facts and circumstances of the case & in law, the Ld CIT(A) is not justified in deleting the addition of Rs. 59,18,00,000/-, ignoring the fact that the assessee could not substantiate that he has not received the impugned unaccounted money for Rs. 59,18,00,000 in M/s Aurochem Buildprop Private Ltd from 636 investors, given the fact that during the year the assessee was working with the Group company i.e. M/s Earth Infrastructures Ltd. which was the holding company of M/s Aurochem Buildprop Private Ltd. - 3. On the facts and circumstances of the case & in law, the Ld CIT(A) is not justified in deleting the addition of Rs. 59,18,00,000/-, ignoring the fact that the assessee was associated with M/s Aurochem Buildprop Private Ltd and he only officially resigned from the company on 17.10.2016 i.e after the relevant Assessment Year. - 4. The appellant craves, leave OR reserve the right to amend, 4 modify, alter, add OR forego any ground(s) of appeal at any time before OR during the hearing of appeal.

- 16. After considering the above facts on record we observed that the funds received by the EIL or by ABPL or other entities of the group from the 636 investors, which was alleged to have been received by the assessee only on the basis of Resolution Professionals Report submitted before the NCLT where main allegation relied by the Assessing Officer, that the assessee was engaged as Manager at that point of time. - 17. We observed that assessee is only an employee of the group entity who was performed the duty of a Manager and he may have facilitated the funds received by the group entities. From the record we observed that assessee has resigned from the position on 10.05.2017 and the same was accepted by the EIL HRD team on 11.05.2017. - 18. Apart from that there is no evidence brought on record by the Assessing Officer to establish that assessee has received such huge amount from the investors and there is no report on which bank account, the above said amounts were received from 636 investors. Nothing was brought on record how the assessee has received such huge amount. Secondly there is no possibility that the investors will remit the amount to the individual account of the assessee when they invest such huge amount in the group entities. That being the case merely relying on the PR submissions before NCLT without establishing the involvement of the assessee for

misappropriation of funds, even the company had not taken any action

against the assessee.

to recover if at all misappropriation of funds made by the assessee. From

the assessment record Ld. CIT(A) has established that assessee has

submitted all relevant information which was also submitted before the

Assessing Officer and Ld. CIT(A) established that Assessing Officer has

not carried on any investigation before completing the assessment.

any reason to disturb the same in absence of any remand report from the

Assessing Officer. Therefore, we are inclined to dismiss the grounds

raised by the revenue.

2026.

Sd/- sd/-

(SATBEER SINGH GODARA) (S.RIFAUR RAHMAN)

JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated: 06 .02.2026

\*Mittali Sr. PS

Copy forwarded to:

ASSISTANT REGISTRAR ITAT, NEW DELHI