ITAT Grants 50% Telescoping Relief as Earlier On-Money Income Was Accepted

Shalimar Corp Ltd Vs DCIT (ITAT Delhi)

Cash Deposit Addition Partly Deleted Because Prior On-Money Receipts Explained Source; No Separate Section 68 Addition Because Advances and Loans Formed Part of Business Turnover; Section 115BBE Inapplicable Because Transactions Occurred Before 1 April 2017; ₹40 Crore Addition Deleted Because Identity, Genuineness and Creditworthiness Were Established.

The case involved cross appeals filed by the assessee and the Revenue against the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2017-18. The assessee, engaged in the real estate development business, had earlier been subjected to a search and seizure operation on 18.06.2015, during which documents and evidence relating to receipt of on-money payments were found. Based on the search findings, assessments for earlier years were completed. In a consolidated order concerning those years, the Tribunal had directed that gross on-money receipts quantified by the Special Auditor at ₹197.82 crore be considered and that income be computed at 20% of such receipts or the profit already disclosed in the books, whichever was higher. Additions relating to share capital and loans were also directed to be treated as regular business turnover assessable at 20%.

For AY 2017-18, the assessee filed its return declaring income of ₹27.49 crore. During assessment proceedings, the Assessing Officer noted that cash deposits of ₹65.79 crore had been made into the assessee’s bank account during FY 2016-17. The assessee explained that the deposits were sourced from opening cash balances and cash receipts already recorded in its books. The Assessing Officer accepted the opening cash balance of ₹12.41 crore but rejected the explanation that the remaining deposits represented on-money received in earlier years. Consequently, ₹49.30 crore, comprising ₹41.38 crore reflected as cash receipts in April 2016 and ₹8 crore deposited in December 2016, was treated as unexplained cash deposits and added under Section 68.

The Assessing Officer also made further additions under Section 68, including ₹2.78 crore shown as advances from customers, ₹3.34 crore received as a loan from Saket Niketan Pvt. Ltd., ₹1.50 crore received from Prominence Impex Pvt. Ltd., and ₹40 crore received as an advance from Nihon Impex Pvt. Ltd.

On appeal, the CIT(A) confirmed the addition of ₹49.30 crore relating to cash deposits, confirmed the additions of ₹2.78 crore and ₹3.34 crore, and deleted the remaining additions. Both parties challenged the respective adverse findings before the Tribunal.

The principal issue in the assessee’s appeal concerned the claim of telescoping. The assessee argued that the Tribunal had already accepted that it had earned undisclosed income through on-money receipts in earlier years and that such funds should be considered available to explain the cash deposits made during FY 2016-17. The assessee submitted that the CIT(A) had wrongly denied telescoping by relying on the Supreme Court decision in Anantharam Veerasinghaiah & Co. It was contended that, unlike that case, there was concrete evidence of actual on-money receipts and not merely intangible additions. The assessee also pointed to a substantial increase in turnover during the relevant year, claiming that after the search the turnover was being fully recorded in the books. It further emphasized that the claim of telescoping had been raised from the assessment stage itself.

The Revenue opposed the claim, arguing that the cash deposits were made during the demonetisation period and that no physical cash had been found during the search proceedings. It was contended that there was no evidence showing the existence of such unaccounted cash after the search and therefore no justification for telescoping.

After considering the rival submissions, the Tribunal observed that it was undisputed that the assessee had earned undisclosed income from on-money receipts and that in earlier proceedings it had accepted the Special Auditor’s quantification of ₹197.82 crore, taxing 20% thereof as undisclosed income. The Tribunal noted that the Supreme Court decision relied upon by the CIT(A) required consideration of the facts and circumstances of each case. It found merit in the assessee’s claim because the existence of on-money receipts had already been accepted, the turnover had increased substantially after the search, and the claim of telescoping had been made from the assessment stage. However, the Tribunal also noted that the assessee had failed to satisfactorily explain the Revenue’s contention that no physical cash had been found during the search. Balancing these factors, the Tribunal granted telescoping benefit to the extent of 50% of the disputed cash deposits and directed deletion of 50% of the addition of ₹49.30 crore, amounting to ₹24.65 crore. The ground was partly allowed.

The Tribunal also dealt with the issue of taxation under Section 115BBE. Referring to a Madras High Court decision, it held that the provision would apply only to transactions undertaken on or after 01.04.2017. Accordingly, it directed that the additions be taxed under the normal provisions and not under Section 115BBE.

With regard to the addition of ₹2.78 crore on account of advances from customers and the addition of ₹3.34 crore relating to the loan from Saket Niketan Pvt. Ltd., the Tribunal followed its earlier decisions in the assessee’s own cases. It observed that no separate addition under Section 68 was warranted where such receipts formed part of the business turnover and on-money component. The Tribunal held that these receipts were covered by the estimated 50% of cash deposits explained through telescoping of on-money receipts and accordingly allowed the assessee’s grounds while dismissing the corresponding Revenue ground.

In the Revenue’s appeal, the principal dispute related to the deletion of a ₹40 crore addition made under Section 68 in respect of an advance received from Nihon Impex Pvt. Ltd. The assessee had explained that the amount represented an advance against property and had been classified as an advance from customers. TDS under Section 194IA had also been deducted. The Assessing Officer treated Nihon Impex Pvt. Ltd. as a shell company and an accommodation entry provider, largely because it had not complied with a notice issued under Section 133(6), and accordingly made the addition.

The Tribunal noted that the CIT(A) had examined the documents furnished by the assessee, including the agreement and Form 26AS, and had concluded that the source of the advance was the refund of an earlier advance made by Nihon Impex Pvt. Ltd. to another entity. The Tribunal further observed that the Investigation Wing had investigated Nihon Impex Pvt. Ltd., summoned its director, and recorded his statement without recording any adverse findings. It also noted that in the lender’s own assessment under Section 143(3), the advance of ₹40 crore to the assessee for purchase of land at Lucknow had been examined and no adverse inference had been drawn. Since the assessee had furnished all relevant documents and discharged its initial burden, and the Assessing Officer had not produced any adverse findings apart from non-compliance with the notice under Section 133(6), the Tribunal upheld the deletion of the addition.

Accordingly, the Tribunal partly allowed the assessee’s appeal by granting partial telescoping relief and deleting related additions, while dismissing the Revenue’s appeal and upholding deletion of the ₹40 crore addition relating to Nihon Impex Pvt. Ltd.

FULL TEXT OF THE ORDER OF ITAT DELHI

The above captioned two cross appeals by the assessee and the Revenue are preferred against the order of the ld. CIT(A) – 31, New Delhi dated 26.09.2022 pertaining to A.Y. 2017-18 respectively.

2. Since the underlying appeals were heard together and the facts in issues are identical, both these appeals are being disposed off by this common order for the sake of convenience and brevity.

ITA No. 2769/DEL/2022(Assessee’s appeal)

3. The assessee has raised the following grounds of appeal:

“1. For that the Ld. CIT(A) ought to have quashed the entire assessment proceedings passed u/s. 143(3) since the same was based on surmises and conjectures and against principles of natural justice.

2. For that on the facts and in the circumstances of the case, the Ld. CIT(A) grossly erred in confirming the addition of Rs.49,30,00,000/- made by the A.O. on account of cash deposits by invoking the provisions of sec. 68 of the Act.

3. For that on the facts and in the circumstances of the case, the Ld. CIT(A) grossly erred in confirming the addition to the extent of Rs. 1,37,29,000/- out of the total addition of Rs.2,78,00,000/-made by the A.O. on account of alleged receipt of cash by invoking the provisions of sec. 68 of the Act.

4. For that on the facts and in the circumstances of the case, the Ld. CIT(A) grossly erred in confirming the addition of Rs.3,34, 11,525/- made by the A.O. on account of loan received from Saket Niketan (P) Ltd. by wrongly treating the same as unexplained u/s 68.

5. The appellant craves leave to add further grounds of appeal or alter the grounds at the time of hearing.

4. Brief facts of the case are that the assessee company is engaged in the real estate development business. There was search and seizure action on the assessee group by the Income tax department on 18.06.2015 during which various documents/evidence were found regarding receipts of on-money payments in their real estate business. The Assessing Officer passed order u/s 153A of the Act for the preceding six years from the year of search and u/s 143(3) of the Act in regard to the year of search that is A.Y 2016-2017 making additions on account of computation of on-money on the basis of the special auditors’ report of Rs 197.82 crore plus Rs 101.02 crore as declared during the search; on account of loans taken, share capital raised and some miscellaneous issues.

5. The proceedings for preceding years has culminated into the passing of a consolidated order in ITA 2360;2764-2768/Del/2022 dated 31.07.2025 by the Delhi Tribunal wherein the Tribunal directed the Assessing Officer to take gross receipt of on-money on the basis of the quantification done by the special auditor of Rs 197.82 crore only and compute the net income/GP thereon at the rate of 20% or that already declared in the assessee’s books, whichever is higher, in place of adoption of GP rate at the rate of 37.72% by the authorities below.

6. In so far as the additions related to addition u/s 68 of the Act on account of share Capital and loans which were confirmed by the ld CIT(A), the same were directed to be treated as regular business turnover assessable @ 20%.

7. The assessee, for the year under consideration of AY 2017-18, filed a return declaring an income of Rs 27,49,24,290/- on 30.10.2017. In the course of assessment proceedings, the AO found that the assessee had deposited an amount of Rs 65,79,60,000/-, in cash, in its bank account, during the FY 2016-17. From the explanation for the source of such deposit furnished by the assessee, the AO found that the assessee has shown a cash in hand of Rs 12,41,64,872/- as opening balance in its books as on 01.04.2016. The assessee further introduced a cash receipt of Rs 41,38,11,426/- in the cash book in the month of April 2016. The assessee carried the opening balance of Rs 12,41,64,872/- alongwith with the cash receipts Rs 41,38,11,426/- as cash-in-hand and other receipts/withdrawal in its book as on 08.11.2016, totaling to Rs 56,49,10,000/-, just before demonetization was declared. The AO found that just after the demonetization was declared, the assessee deposited the entire cash-in-hand of Rs 64,49,10,000/- in its bank account during the period 9th November 2016 to December 2016 as follows: Rs 56,49,10,000/- between 09.11.2016 to 30.11.2016 and Rs 8.0 crore in December 2016.

8. The AO, during the course of assessment proceedings, questioned the source of these cash deposits of Rs 64.49 crore. The AO accepted the assessee’s explanation for cash deposit of Rs 12.41 crore in April 2016, being opening balance from previous year. The AO however, rejected the assessee’s explanation for balance cash deposit that the said deposits represent ‘On money’ received in the year prior to FY 2016-17. The AO finally, held that the source of cash deposit of Rs 41.38 crore in April 2016 in cash book and cash deposit of Rs 8 crore in bank in the month of December 2016 totaling to Rs 49.30 crore, are unexplained and added them as unexplained cash deposits u/s 68 of the Act.

9. The AO further added the following amount u/s 68 of the Act:

10. On appeal, the ld CIT (A) confirmed the addition of Rs 49.30 crore of cash deposit. The CIT(A) also confirmed the addition on account of Advance from Customer of Rs 2.78 crore and Loan from Saket Niketan of Rs 3.34 crore. The CIT(A), however, deleted the balance addition. Both the assessee and the Revenue are in appeal against their respective addition/deletion.

11. We take up the assessee appeal first. Ground No. 1 is general in nature. Ground No. 2 relates to addition of Rs. 49.30 crore in respect of cash deposits in the bank accounts. The ld counsel of the assessee vehemently submitted that the CIT(A) accepted that the assessee earned unaccounted income from on-money receipts in preceding years. However, the CIT(A) denied the benefit of telescoping of cash generated prior to the period of search, for cash deposits of Rs 49.30 crore made in the F.Y. 2016-17 relevant to A.Y 2017-18, misconstruing the apex court decision in the case of Anantharam Veerasinghaiah & Co. versus CIT 123 ITR 457 (SC). The ld AR stated that in the said case, the Supreme Court has held that any availability of fund out of intangible additions in the preceding years cannot, in all cases, imply that the assessee has not earned further secret profits during the relevant assessment year and there should be overall consideration of peculiar facts and circumstances of the case.

12. The ld. counsel for the assessee further distinguished the facts in the case at hand with the facts of Anantharam Veerasinghaiah & Co submitting that there is no intangible addition in its case to the total income in preceding years but there was concrete evidence on record that the assessee has earned real income in the form of on money.

13. It is the further say of the ld. counsel for the assessee that in the present case, the overall facts and circumstances indicate that the assessee’s prayer for telescoping benefit to be granted is based on sound basis. The ld. counsel for the assessee pointed out to the chart of turnover submitted at serial number E of the book, where it can be seen that in the instant year, the sale turnover of the assessee has seen a quantum leap from the preceding year and compared to other years which were subject matter of search proceedings. In fact, the turnover as per the books in the instant year has doubled from the preceding year. Thus, it is apparent that after the search the entire turnover is being recorded in the books. This is a logical inference that can be drawn from the factum of quantum leap in turnover.

14. Further, in the case before the Hon’ble Supreme Court [supra], the fact was that cash deficit was unearthed by the Assessing Officer in the cash book in the course of assessment proceedings. As can be seen from para 1 of the Supreme Court decision that the assessee offered various ITA No. 2769/DEL/2022 ITA No. 3068/DEL/2022 Shalimar Corp [A.Y. 2017-18) alternative pleas to explain the cash deficit in the cash book, which were all rejected by the Assessing Officer and the plea of telescoping benefit was taken for the first time before the ITAT. In the instant case, the assessee is taking the plea of telescoping of cash received on account of on- money in earlier years against the cash deposits in banks, which are recorded in the regular books, since the stage of assessment. In fact, the assessee has claimed the said adjustments in the books.

15. The ld. counsel for the assessee concluded by saying that the CIT(A)’s contention that the cash was not found in the course of search is also not a reasonable one inasmuch as, it is not necessary that every item/asset will come to the notice of the first party at the time of search. The assessee also relied on the following decisions:

i) CIT vs. Nabadwip Chandra Dey, High Court of Gauhati, 190 ITR 133

ii) ACIT vs. Dharam Das Agarwal, High Court of Madhya Pradesh, 144 ITR 143

iii) CIT vs. Tyaryamal Balchand, High Court of Rajasthan, 165 ITR 453

iv) Vinod Bhandari vs. PCIT, Indore, ITAT Indore Bench, 116 com 264

16. On the other hand, the ld. DR stated that the cash deposits of Rs. 49.50 crore were made during the demonetization period and there was no evidence found during search with regard to any physical cash in the case of the assessee and its group. The ld. DR pointed out that the ITAT in assessee’s own case (supra), while holding 20% of the on-money calculated by the Special Auditor, as income of the assessee, had also included various unexplained loans taken by the assessee. It is the say of the ld. DR that after search, there is no evidence of unaccounted cash left with the assessee and therefore, benefit of telescoping the cash deposits in the instant year may not be granted on account of declaration made for the period of search.

17. We have heard the rival submissions and have perused the relevant material on record. We find that it is an admitted fact that the assessee company, engaged in the real estate development business, has earned undisclosed income from on-money which the Special Auditor calculated at Rs 197.82 crore during the preceding period of six years from the date of search and the year of search. The ITAT (supra) accepted the said calculation and considered 20% of the gross receipt of on-money as undisclosed income as against the rate of 37.72% adopted by the authorities below.

18. The issue of substantive contention of the assessee is with regard to claim of benefit of telescoping of undisclosed income earned as on-money prior to AY 2017-18, as explanation for deposit of cash of Rs 49.50 crore during AY 2017-18. We find that the CIT(A) denied the benefit of telescoping of cash generated during the period of search, for cash deposits of Rs 49.30 crore made in the F.Y. 2016-17 relevant to A.Y 2017­18, by relying on the apex court decision in the case of Anantharam Veerasinghaiah & Co. versus CIT 123 ITR 457 (SC).

19. We find that in the said case of Anantharam Veerasinghaiah & Co. versus CIT, the Supreme Court has held that any availability of fund out of intangible additions in the preceding years cannot, in all cases, imply that the assessee has not earned further secret profits during the relevant assessment year and there should be overall consideration of peculiar facts and circumstances of the case. In the instant case, the ITAT (supra) has accepted the factum of generation of income in the form of on-money in real estate business in the years prior to AY 2017-18, and has held the same as taxable as unaccounted income at the rate of 20% of total on-money received. In such a peculiar facts and circumstances, we are of the considered view that the claim of the assessee for telescoping benefit has some merit. It is also an uncontroverted fact that the assessee has shown a substantial increase in its sale turnover in the instant year compared to other years which were subject matter of search proceedings which do give some indication that after the search substantial turnover is being recorded in the books. Further, we find that as against the facts of the Anantharam Veerasinghaiah case where the assessee raised the issue of telescoping for the first time before the ITAT, in the instant case the assessee had claimed telescoping of cash received on account of on-money in earlier years, against the cash deposits in banks, since the stage of assessment itself.

20. We nevertheless also find that the assessee failed to give a convincing reply to the Revenue’s argument that no such physical cash was found during the course of search proceedings, available with the assessee, in its premises or elsewhere. In such a factual matrix of the instant case and considering the fact that there is no dispute that the assessee has earned undisclosed on-money from its real estate business, we are of the considered view that telescoping benefit of the on-money earned prior to the instant year under consideration, as an explanation to the extent of 50% of cash deposit in AY 2017-18, may be granted to the is directed to delete the 50% addition of Rs 24.65 crore. The ground 2 of the appeal is partly allowed in the aforesaid terms.

21. In so far as assessee’s levy of tax at a higher rate under section 115BBE of the Act is concerned, we find that the Madras High Court in the Writ petition in the case of M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) has held that the impugned statutory provision would come into effect on the transaction done on or after 01.04.2017 only. Accordingly, we direct the AO to tax the addition under normal provisions of tax and not under the provisions of 115BBE.

22. Ground No.2 of assessee’s appeal and Ground No. 6 of the Revenue’s appeal relate to the restriction of addition of Rs. 2,78,00,000/-to Rs 1,37,29,000/- made by the Assessing Officer on account of alleged receipt of cash from customers and other receipts by invoking provisions of section 68 of the Act r.w.s. 115BBE of the Act. The CIT(A), granted relief of Rs. 1,56,41,000/- being cash withdrawals from bank accounts of the assessee. Ground 3 of the assessee relates to addition u/s 68 of Rs 3,34,11,525/- received as loan from Saket Niketan P Ltd.

23. We find that that the ITAT in ITA Nos.2360/Del/2023; 2764 to 2768/Del/2022; ITA Nos.2502/Del/2023; 2853 & 2854/Del/2022 in assessee’s own case, has held that no separate additions on account of section 68 of the Act is called for and the same be treated as on-money component only liable to be assessed at the rate of 20% since forming part of the business turnover going by Indwell Construction Vs. CIT (1998) 232 ITR 776 (AP). Following the same logic, we hold that the receipts as advance from customer and loan from Saket Niketan are part of the estimated 50% of cash deposit explained by way of the benefit of telescoping of the on-money component. Ground 2 and 3 of assessee’s appeal is allowed and ground 6 of the Revenue is dismissed in the aforesaid terms.

ITA No. 3068/DEL/2022 (Revenue Appeal)

24. The Revenue has filed an application for condonation of delay of 20 days on the ground that the authorization to file appeal before the ITAT was received late. Having perused the application for condonation of delay, we find that there is sufficient cause for filing the appeal belatedly. We, therefore, condone the delay.

25. The Revenue has taken the following Grounds of Appeal:

1. ITA No. 2769/DEL/2022 ITA No. 3068/DEL/2022 Shalimar Corp [A.Y. 2017-18) 1.Whether on the facts and circumstances of the case and in law that the Ld. CIT(A) erred in deleting the addition of Rs. 40 Crores without appreciating the fact that the property advance given by the Nihon Impex Pvt. Ltd. to Gallantt Ispat Limited of Rs. 40 Crores was still outstanding as on 31.03.2017 as per Note 9 of the Balance sheet of Gallantt Ispat Limited and was hence not available to the Nihon Impex Pvt. Ltd. to advance to the Assessee.

2. Whether on the facts and circumstances of the case and in the law the Ld. CIT(A) erred in deleting the addition of Rs. 40 Crores without considering the observation of the Assessing Officer at para 11.12 of the assessment order wherein the AO proved that whole transaction is not a property transaction but colorable arrangement to bring unaccounted money into the books of the assessee company.

3. Whether in the facts and circumstances of the case and in the provisions of the law, the Ld. CIT(A) erred in deleting the addition of amount of Rs. 40 crore on the basis of assessee’s contention without asking for remand report from the AO, despite the fact neither the Nihon Impex Pvt. Ltd. nor the appellant provided Financial of the company i.e Nihon Impex Pvt. Ltd during the proceeding before assessing officer.

4. Whether on the facts and circumstances of the case and in law that the Ld. CIT(A) erred in deciding the issue on the basis of assessment proceeding of M/s Nihon Impex Pvt Ltd, failing to appreciate that any findings in that assessment cannot be used to ignore facts on record.

5. Whether on the facts and circumstances of the case, the Ld. CIT(A) erred in holding that the notice u/s 133(6) was issued to the lender i.e. M/s Nihon Impex Pvt Ltd at the Fag end is factually wrong as the notice was sent on 31.10.2019 i.e. before 2 months of assessment order passed.

6.Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the part addition of Rs. 1,37,29,000/- out of Rs. 2,78,00,000/- totally relying on the submission of the assessee which was not supported with any documentary evidences.

26. Grounds Nos. 1 to 5 relate to common issue of deletion of addition of Rs. 40 crore made by the Assessing Officer u/s 68 on account of property advance received from Nihon Impex Pvt Ltd. The assessee explained before the AO the amount of Rs. 40 crore related to advance received from the said party against property and was classified in its books as advance from customers. Accordingly, TDS as per the provision of section 194IA of the Act was also deducted by them. The Assessing Officer, however, held non-compliance of notice u/s 133(6) of the Act by Nihon Impex Pvt Ltd against the assessee, and held Nihon Impex as a shell company from whom the assessee had taken accommodation entry, and added the same u/s 68.

27. When the assessee went in appeal before the ld. CIT(A), the ld. CIT(A) took cognizance of the documents submitted before the Assessing Officer which, inter alia, included agreement dated 01.09.2017 submitted before the Assessing Officer alongwith form 26AS, (copies of which are placed in the paper book at SI. No. ‘B). The ld. CIT(A) came to a conclusion that the source of advance of Rs. 40 crore made by M/s Nihon Impex (P) Ltd was the refund of earlier advance it had made to M/s Gallant Udyog Ltd and thereafter deleted the addition. Aggrieved, the revenue is in appeal before us.

28. The ld. DR relied upon the orders of the Assessing Officer.

Per contra, the ld. counsel for the assessee vehemently stated that the CIT(A), from the finding of the Investigation Wing which had summoned a director of Nihon Impex and recorded his statement, drew positive conclusion regarding establishment of identity and genuineness of transaction. It is the say of the Ld AR that with respect to creditworthiness, the CIT(A) has further noted that the assessment of the said creditor for A.Y. 2017-2018 was completed u/s 143(3) vide order dated 23.10.2019, copy placed at Sl. No. ‘B (d)’ of paper book, wherein at para 4, the factum of giving of advance of Rs. 40 crore to the assessee company during the year for purchasing a land at Lucknow has been recorded and cognizance of agreement for sale and confirmation letter was taken and finally no adverse comment/inference was drawn in their assessment.

29. The ld AR stated that the ld. CIT(A) held that the Assessing Officer held Nihon Impex as shell company, without marshalling evidences whereas the assessee has furnished all necessary documents to discharge the initial onus. It is submitted that Hon’ble Delhi High Court’s decision in the case of Dwarkashish Investment Pvt Ltd (supra) squarely applies.

30. We have heard the rival submissions and have perused the relevant material on record. We find that the Investigation Wing had investigated M/s Nihon Impex Pvt Ltd; summoned its director and recorded his statement and did not give any adverse findings. The assessee furnished to the AO, all the requisite documents explaining the said advance, discharging its initial onus. Again, the AO did not give any adverse findings in the explanation furnished by the assessee except that M/s Nihon Impex Pvt Ltd did not comply with the notice u/s 133(6). The CIT(A) further examined the assessment order u/s 143(3) of the said M/s Nihon Impex Pvt Ltd wherein the issue of advance of Rs 40 crore, given to the assessee for purchase of land at Lucknow, was examined by its AO, without giving any adverse findings. Upon cumulative consideration of the facts, the CIT(A) deleted the said addition made u/s 68. In such factual matrix, we are of the considered view that there is no reason to interfere with the decision of the CIT(A) on this issue. The grounds are accordingly dismissed in the said terms.

31. In the result, the appeal of the assessee in ITA No. 2769/DEL/2022 is partly allowed whereas appeal of the Revenue in ITA No. 3068/DEL/2022 is dismissed.

The order is pronounced in the open court on 09.04.2026.