Anil Rathee Vs ITO (ITAT Delhi)
The appeal filed by the Assessee was against order dated 20.03.2026 of Ld. Commissioner of Income Tax(Appeals)/NFAC, Delhi u/s 250 of the Income Tax Act, 1961, arising out of assessment order dated 16.12.2019 of Ld. Assessing Officer/Income Tax Officer, Ward-1, Room No. 5, Rohtak for Assessment Year 2012-13. As per AIR/CBI information, the assessee had deposited cash amounting to Rs. 54,00,500/- during the financial year 2011-12 relevant to A.Y. 2012-13. Since the assessee had not filed return of income u/s 139(1), a verification letter dated 13.02.2019 was issued to explain the source of the cash deposit, but remained un-complied. Proceedings u/s 147 were initiated and notice u/s 148 dated 28.03.2019 was issued, followed by various notices u/s 142(1) and u/s 143(2). The assessee did not file reply or information, and the AO made addition of Rs. 54,00,500/-. Before the Tribunal, the assessee submitted that he was a property dealer acting as an intermediary for Sh. Zile Singh and his family members, collecting cash from prospective property buyers, depositing it into his personal bank account and subsequently transferring the amounts to the seller to facilitate registration of various sale deeds. The assessee relied upon bank statements, three affidavits from sellers, eight sale deeds executed by the Zile Singh family and seven additional affidavits from property buyers confirming handing over of cash consideration for transfer to sellers. The Tribunal examined the record and found that the assessee, acting as an intermediary, had received cash from property buyers, deposited it in his bank account and subsequently transferred the same amounts to the seller of property, supported by affidavits of sellers and buyers. It held that passing of the impugned orders was not just fair and reasonable and set aside the order dated 16.12.2019 of the AO and order dated 20.03.2026 of the CIT(A). The grounds of appeal were accepted and the appeal filed by the assessee was allowed.
Cases Discussed
- Shri Balwant Rai Wadhwa Vs. ITO, I.T.A. No. 4806/Del/10.
- ACIT & Anr. Vs. Hotel Blue Moon: (2010) 321 ITR 362(SC).
- S. Venkat Reddy, Hydrabad vs. ITO [TS-6716-ITAT-2016(HYDERABAD)-O].
- ITO Vs. Kamal Kumar Mishra, ITA No. 398/LKW/2012.
- Shri Inderjeet, Sohna Gurgaon, ITAT Delhi, Dt. 3.12.2018.
- Dy CIT, Range 2, Lucknow Vs. Pawan Aggarwal, ITA No. 374/LKW/2013 A.Yr. 2009-10.
- ITO Vs. Deepali Sehgal.
- Sri Shankar Khandasari Sugar Vs. CIT, 193 ITR 669.
- Bir Bahadur Singh Sijwali Vs ITO, Ward 1, Haldwani Appeal No. 3814(Delhi) of 2011.
FULL TEXT OF THE ORDER OF ITAT DELHI
The appeal filed by the Assessee is against order dated 20.03.2026 of Ld. Commissioner of Income Tax(Appeals)/ NFAC, Delhi (hereinafter referred to as ‘the CIT(A)’) u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of assessment order dated 16.12.2019 of Ld. Assessing Officer / Income Tax Officer, Ward -1, Room No. 5, Rohtak (hereinafter referred to as ‘the AO’) for Assessment Year 2012-13.
2. Brief facts of the case are that as per AIR / CBI information, the assessee deposited cash in bank account amounting to Rs. 54,00,500/- during the financial year 2011-12 relevant to A.Y. 2012-13. Since the assessee had not filed return of income u/s 139(1) of the Act, verification letter 13.02.2019 was issued to explain the source of cash deposited but the same remained un-complied. Proceedings u/s 147 of the Act were initiated. Notice u/s 148 of the Act dated 28.03.2019 was issued. Notices u/s 142(1) of the Act along with questionnaire dated 03.05.2019, 02.07.2019 and 29.07.2019 were issued. Notices u/s 143(2) and u/s 142(1) of the Act along with questionnaire dated 05.10.2019 and notices u/s 142(1) of the Act dated 28.10.2019 and 09.12.2019 were issued. The assessee did not file reply or information. On completion of proceedings, ld. AO vide order dated 16.12.2019 made addition of Rs. 54,00,500/-.
3. Against order dated 16.12.2019, the appellant/assessee filed appeal before the Ld. CIT(A) which was dismissed vide order dated 30.03.2026.
4. Being aggrieved the appellant/assessee preferred the present appeal on following grounds:
“1. That the order of the ld. CIT(A) is bad in law and on facts.
2. That the ld. CIT(A) erred in confirming the reopening u/s 147/148, which is illegal, without jurisdiction and based solely on AIR/CIB information without independent application of mind.
3. That the ld. CIT(A) erred in confirming addition of Rs. 54,00,500/- on account of cash deposits, which is arbitrary and unjustified.
4. That the ld. CIT(A) failed to appreciate that the appellant was acting as a property dealer/intermediary and the deposits were business-related pass-through transactions.
5. That the ld. CIT(A) erred in ignoring evidences such as affidavits and sale deeds filed by the appellant.
6. That without prejudice, the addition is excessive, and at most, addition should be restricted to peak credit.
7. That the appellant craves leave to add, amend OR withdraw any ground at the time of hearing.”
5. Ld. Authorized Representative for appellant/assessee submitted that the appellant/assessee is a property dealer. The assessee acting as an intermediary for Sh. Zile Singh and his family members, collected cash from prospective property buyers, deposited it into his personal bank account, and subsequently transferred the amounts to the seller to facilitate the registration of various sale deeds. Detailed reply dated 29.11.2019 along with bank statements, three affidavits from the sellers, and eight sale deeds executed by the Zile Singh family and seven additional affidavits were provided by the property buyers themselves confirming handing over of cash consideration to the assessee for the express purpose of transferring the same to the sellers were submitted. Copies of documents were submitted before Ld. CIT(A) and ld. AO.
6. Ld. Departmental Representative relied on impugned orders.
7. From examination of record in light of aforesaid rival contention, it is crystal clear that the appellant/assessee acting as an intermediary had received cash from property buyers, deposited same in his bank account and subsequently transferred the amounts to seller to facilitate registration of various sale deeds, copy of bank statement of assessee is on page No. 1 to 2, Affidavit sellers is on page No. 3-5, Reconciliation statement is on page No. 6-7, Sales Deed Affidavit Buyers is on page No. 8-38, reply to AO before AO is at page No. 39-41 and submissions before Ld. CIT(A) are at page No. 42-43 of paper book.
8. In view of above material facts of receipt of money from purchasers, deposit of same in bank account of assessee and subsequent transfer of same amounts to the seller of property supported by affidavits of sellers and buyers, passing of impugned orders is not just fair and reasonable. Therefore, impugned orders dated 16.12.2019 of Ld. AO and dated 20.03.2026 of ld. CIT(A) are set aside. The grounds of appeal are accepted.
9. In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 30.07.2026
