Rakesh Kumar Vohra Vs DCIT (ITAT Chandigarh)
The ITAT, Chandigarh Bench held that telescoping benefit cannot be denied merely because firm’s disclosure is profit-estimated and not cash-flow specific, when the assessee is a substantial partner and the unaccounted income must manifest as cash or assets.
In this case, cash of ₹5.50 lakh found during search was added u/s 69A in the hands of the assessee. The assessee explained that the cash belonged to the partnership firm, which had suo-moto disclosed substantial additional income during search proceedings. The lower authorities rejected telescoping for want of a direct one-to-one cash nexus.
The Tribunal rejected this hyper-technical approach, holding that unaccounted profits accrue over time and exact tracing is not always possible. Given the assessee’s 50% partnership interest, the surrendered income of the firm was sufficient to explain the cash found. Accordingly, telescoping was allowed and the addition deleted. The appeal was partly allowed
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
1. Aforesaid appeal by assessee for Assessment Year (AY) 2019-20 arises out of an order of learned Commissioner of Income Tax (Appeals)-3, Gurgaon [CIT(A)] dated 29-07-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143(3) of the Act on 17-06-2021. The sole grievance of the assessee is confirmation of addition of Rs.5.50 Lacs u/s 69A which represent cash found during search on the assessee. The Ld. AR sought telescoping benefit out of surrender made by the partnership firm in which the assessee acted as partner to the extent of 50%. The Ld. CIT-DR stated that in the absence of proven nexus, the benefit as pleaded by Ld. AR could not be granted to the assessee. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under.
