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Facts
During a search operation, an addition of Rs. 1.40 crore was made to the assessee's income under Section 69 for undisclosed investment, along with a disallowance of Rs. 19.50 lakhs. The CIT(A) deleted the disallowance and partially confirmed the addition to Rs. 57,97,400/-. The assessee appealed against the confirmed partial addition.
Held
The tribunal held that the seized document pertained to the assessee's son, Manoj Gupta, and there was no corroborative evidence or 'on money' addition in the seller's hands to support the alleged undisclosed investment. Therefore, the sustained addition was deleted.
Key Issues
The key legal issue was whether the addition for undisclosed investment under Section 69 was justified, given the assessee's claim that the seized document pertained to his son and the lack of corroborative evidence for 'on money' payment.
Sections Cited
Section 69, Section 132, Section 143(3)
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Income Tax Appellate Tribunal, DELHI
The present appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeals)-3, Noida [‘Ld. CIT(A)’ for short] dated 04/06/2025 pertaining to Assessment Year 2023-24.
Brief facts of the case are that, the Assessee filed return of income declaring total income at Rs. 3,23,52,660/- deriving income from house property, business and income from other sources. A search and seizure operation u/s 132 of the Income Tax Act, 1961 ('Act' for short) was carried out on 22/11/2023 in the group cases of Sh. Jitender Joshi and its relative entities, the Assessee being one of the related and connected person of the group cases, the case of the Assessee was covered during the search and seizure action. Assessment proceedings came to be initiated and an assessment order came to be passed u/s 143(3) of the Act on 30/03/2025 by disallowing expenses of Rs. 19,50,000/- claimed by the Assessee and also by making an addition of Rs. 1,40,00,000/- on account of undisclosed investment u/s 69 of the Act. Aggrieved by the assessment order dated 30/03/2025, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 04/06/2025, deleted the disallowance of Rs. 19.5 lakhs and confirmed the addition of Rs. 57,97,400/- out of the addition of Rs. 1,40,00,000/- made by the A.O. u/s 69 of the Act. Aggrieved by the order of the Ld. CIT(A) in confirming the partial addition, Assessee preferred the present Appeal.
The Ld. Counsel for the Assessee vehemently submitted that the seized document bearing Page No. 27 in LP-05 was a page of family settlement of the son of the Assessee Assessee and the name of the son of the Assessee Sh. Manoj Gupta is clearly mentioned on the top of the document itself and all the entries mentioned in the seized document are pertaining to the said Manoj Gupta and his family members. Further submitted that the affidavit of both the Assessee as well as son Manoj Gupta have been filed before the authoritiesbelowin support of the said claim of the Assessee and there is no ‘on money’ has been paid to purchase the Flat as there is no corroborative material to prove the same. The Ld. Assessee's Representative further submitted that no addition of ‘on money’ in the hands of seller i.e. M/s Pearl Hides was made. Thus, submitted that the addition sustained by the Ld. CIT(A)
requires to be deleted, thus, sought for allowing the appeal.
Per contra, the Ld. Department's Representative submitted that the seized document has been found to be genuine in view of various entries being corroborated with bank account transaction and the Ld.
CIT(A) has already deleted partial addition and sustained addition of Rs.
57,97,400/- as the Assessee failed to prove the genuineness and source of the amount mentioned in the seized documents. Thus, the Ld.
Department's Representative relying on the findings and the conclusion of the Ld. CIT(A), sought for dismissal of the appeal.
We have heard both the parties and perused the material available on record. It was the specific case of the Assessee that the seized documents bearing Page No. 27 in LP-05 is pertaining to his son Manoj Gupta whose name has been reflected on the top of the document itself and all the entries mentioned in the seized document are pertaining to the son of the Assessee Sh. Manoj Gupta and his family Members only.
To substantiate the said claim the affidavit of the Assessee as well as son of the Assessee Sh. Manoj Gupta have been placed before the A.O.
Admittedly, the circle rate of the Flat in the year under consideration was Rs. 78,12,000/- and Rs. 63,87,000/- respectively and the sale deeds have been executed more than the circle value. There is no any agreement or other corroborative evidence to suggest that the Assessee has paid alleged ‘on money’ for purchase of the Flat. Further, the Department has failed to bring any material on record to show regarding the addition made in the hands of the seller M/s Pearl Hides for alleged receipt of ‘on money’. Considering the nature of the seized document and also in the absence of any credible evidence to corroborate the version of the Revenue, we find no reason to upheld the order of the Ld.
CIT(A). Accordingly, the addition sustained by the Ld. CIT(A) is hereby deleted.
In the result, Appeal of the Assessee is allowed.
Order pronounced in the open court on 09th January, 2026
Sd/- Sd/- (S. RIFAUR RAHMAN) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 09 .01.2026 R.N, Sr.P.S*