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Judgment
This appeal by the assessee is directed against the order of Additional/Joint Commissioner of Income Tax (Appeals)-4, Mumbai [in short ‘the CIT(A)’] dated 24.03.2026, for Assessment Years 2016-17.
The solitary issue assailed by the assessee in present appeal is addition of Rs.25,66,735/- sustained by the CIT(A).
Shri Saurav Rohatgi, appearing on behalf of the assessee submits that during the period relevant to assessment year under appeal, the assessee had sold immovable property (shop bearing no.240, Azad Market, Delhi) for a total consideration of Rs.46,10,000/-. The assessee invested the sale consideration from shop in derivatives. The assessee suffered loss of Rs.25,66,735/- in trading of derivatives. The Assessing Officer (AO) questioned the source of funds utilised for meeting the share trading loss. The assessee explained the source of funds i.e. from the sale of immovable property. Admittedly, during assessment proceeding assessee could not place on record copy of agreement to sell. The AO in absence of any substantiating evidence made addition of Rs.25,66,735/- i.e. the loss suffered by the assessee in trading of derivatives. The assessee carried the issue in appeal before the CIT(A). In First Appellate proceedings, the assessee furnished additional evidences in the form of bank statements and sale deed. The ld. AR of the assessee contended that the CIT(A) without admitting additional evidences confirmed the addition made by AO, hence, the present appeal.
Per contra, Shri Nirmal Nangia representing the department relying on findings of CIT(A) and the AO, prayed for dismissing appeal of the assessee.
Both sides heard, orders of the lower authorities examined. The limited issue for consideration in the present appeal is, addition of Rs.25,66,735/- confirmed by the CIT(A). The addition was made by the AO for the solitary reason that the assessee was not able to substantiate source of investment in shares. The assessee had furnished additional evidences before the CIT(A) in the form of agreement to sell and bank statements. The CIT(A) rejected the same and held that the fundamental documents required to established link between the property sold and share trading was neither furnished before the AO nor the CIT(A). I find the aforesaid observations of the CIT(A) contrary to the documents available on record. The assessee has filed a paper book containing bank statement at pages 17 to 20 and agreement to sell dated 12.01.2016 at pages 21 to 30 of paper book. Without commenting on the documents filed before the CIT(A) as additional evidences, I deem it appropriate to restore this matter to the AO for passing the assessment order denovo, after considering the documents furnished by the assessee before the CIT(A) and affording reasonable opportunity of making submissions to the assessee, in accordance with law.
The ld. AR of the assessee has placed reliance on the decision of Tribunal in the case of Jag Mohan vs. DCIT in ITA No.7055/Del/2017 order dated 07.01.2026 to contend that since no section is mentioned by the AO or the CIT(A) while making the addition, the assessment order is bad in law. I find that reliance placed by the AR on the decision rendered in the case of Jag Mohan (supra) is misplaced, as the said decision was on different set of facts where the AO had made addition referring to definition section not the charging section. Hence, the said decision would not advance the cause of assessee.
In the result, impugned order is set aside and appeal of the assessee is allowed for statistical purpose, in the above said terms.