ACIT, CIRCLE - 34(1), DELHI vs. PANKAJ KALRA, DELHI

ITA 855/DEL/2025Status: DisposedITAT Delhi31 December 2025Bench: SHRI M. BALAGANESH (Accountant Member), MS MADHUMITA ROY (Judicial Member)10 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the deletion of the disallowance for purchases, finding no evidence of excessive payment and noting the AO failed to provide comparable instances. The Tribunal also upheld the deletion of additions for cash deposits, allowing for cash sales and a portion of gifts, and allowed deduction for cost of improvement based on banking channel payments and supporting documents.

What were the facts?

The assessee purchased goods from a related concern at supply rates, and the Assessing Officer (AO) disallowed the entire purchase amount under Section 40A(2)(b) for being excessive. The assessee also deposited cash during demonetization, which the AO added as unexplained. Additionally, the AO denied deduction for cost of improvement on a property sale.

What were the issues?

Whether purchases from a related concern were excessive under Section 40A(2)(b), and whether cash deposits and cost of improvement were adequately explained.

Which sections of the Income-tax Act were involved?

Section 40A(2)(b),Section 69A

AI-generated summary — verify with the full judgment below

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

Before: SHRI M. BALAGANESH

For Appellant: Shri Gaurav Jain, Adv, Shri Tarun Chanana, Adv
For Respondent: Shri Om Prakash, Sr. DR
Hearing: 12/11/2025Pronounced: 31/12/2025

PER M. BALAGANESH, A. M.:

1.

The appeal in ITA No.855/Del/2025 for AY 2017-18, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 16.12.2024 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 30.12.2019 by the Assessing Officer, ACIT, Circle-34(1), New Delhi (hereinafter referred to as ‘ld. AO’).

2.

The first issue to be decided in this appeal is as to whether the Learned CITA was justified in deleting the disallowance under section 40A(2)(b) of the Act in the sum of Rs 6,94,83,088/- in the facts and circumstances of the case. Pankaj Kalra

2.1.

We have heard the rival submissions and perused the materials av

The order continues below.

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