Rahul Tandon vs ACIT, CC-2, Delhi

PER KRINWANT SAHAY AM

Appeal in this case has been filed by the assessee against the order dated 27.11.2025 passed by the Ld. CIT(A)/NFAC-23, Delhi for the A.Y. 2022-23. Grounds of appeal are as under :-

That on the facts and circumstances of the case, the Ld. CIT(A), has erred in sustaining the addition of Rs. 9,00,000/- made by the Ld. AO, which is erroneous and not in accordance with the law, hence the same is liable to be deleted.

That on the facts and circumstances of the case, the Ld. CIT(A) has erred in sustaining the addition on the basis of presumption, conjecture, and surmises without appreciating the documentary evidence submitted by the Appellant during the assessment proceedings, rendering the entire addition bad in law.

That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts by sustaining the additions made by the Ld. AO by disregarding the fact that the Appellant had proved the source of cash, rendering the invocation of section 69A of the Act unwarranted,

That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts by sustaining the addition, merely relying on the self-serving part of the statements recorded u/s 131(1A) and 132(4) of the Income Tax Act, 1961, rendering the impugned order invalid.

Brief facts of the case are that on 05.07.2021, the Air Intelligence Unit, Delhi reported that the assessee Sh. Rahul Tandon and Sh. Nand Kishore were travelling to Goa carrying Rs.18,00,000/- in cash. On interrogation they admitted that Rs.9,00,000/- belong to each one of them. As they failed to provide a credible source for the cash, a search warrant u/s.132 of the Act was executed, and the cash was seized as unexplained money.

Later on during the assessment proceedings, the assessee claimed the cash was meant for stamp duty payment related to a Goa property transaction, through M/s. Seaview Infratech LLP. He stated that funds were withdrawn from the capital account of his proprietorship firm ‘1114/s Catering Care’ for this purpose. Ledger accounts were submitted, showing cash withdrawal but no vouchers or supporting documents were provided. The explanation was deemed unsatisfactory and accordingly half of the total seized amount i.e. Rs.9,00,000/- was added in the assessee’s income u/s.69A of the Act. The same documents were produced before the ld. CIT(A) by the Ld. CIT(A) also rejected the claim of the assessee and sustained the addition made by the AO.

During proceedings before us the Ld. Counsel for the assessee filed the entire bank account and ledger account showing capital account of Rahul Tandon in the M/s. Catering Care proprietorship concern of the assessee. From the Rahul Tandon Capital account and ledger, it is seen that the assessee had withdrawn cash from proprietorship concerns from 28.06.2021 to 02.07.2021 in the range of Rs.1,00,000/- to Rs.2,00,000/-. Thus, within a week the assessee had withdrawn of Rs.9 lacs from its capital account. Thus, Rs.9 lacs was withdrawn by the assessee within a week starting from 28.06.2021 to 02.07.2021. On 05.07.2021 the money was attached by the department. The ld. Counsel for the assessee showing all these withdrawals argued that all these facts were brought before the AO and the ld. CIT(A) but both of them did not accept the facts brought before them by the assessee. In the proceedings before us by producing evidences once again he argued that the entire Rs.9,00,000/- amount was withdrawn by the assessee just within a week when it was attached by the IT department.

Per contra the Ld. DR relied on the findings brought on record by the authorities below.

We have considered the findings given by the authorities below on this issue and the arguments advanced by both the parties during proceedings before us. We find that the entire amount of Rs. 9 lacs was withdrawn by the assessee just within a week prior to the search on assessee from the capital account of the assessee in its proprietorship business, therefore, we do not find any infirmity in the statement and evidences brought on record by the Ld. Counsel for the assessee. Therefore, we are inclined to accept the evidences brought on record by the assessee. Accordingly, assessee’s appeal on this issue is allowed.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in open Court on 15th July, 2026.