In Assistant Commissioner of Income Tax, Central Circle-25 v. Faridabad Presswell Pvt. Ltd. (ITAT Delhi, pronounced on 09 January 2026), the Delhi Bench of the Income Tax Appellate Tribunal dismissed the Revenue’s appeal challenging the deletion of an addition of ₹8 crore made on account of alleged unexplained cash investment under search proceedings.

The case arose from a search conducted on a third party and the JBM Group, during which certain electronic records were found indicating alleged cash payments in relation to land purchases. Based on the seized excel data, the Assessing Officer made an addition in Assessment Year 2015–16, treating the alleged cash component as unexplained investment of the assessee. The Commissioner of Income Tax (Appeals), after detailed examination, recorded a finding that both the cheque payments and the alleged cash payments related to Financial Year 2013–14 and, therefore, could not be assessed in AY 2015–16.

Before the Tribunal, the Revenue contended that the seized material constituted incriminating evidence and justified the addition. The assessee, while supporting the order of the CIT(A), also invoked Rule 27 of the ITAT Rules to raise jurisdictional objections relating to proceedings under Sections 153C and 153D. The Tribunal rejected the additional grounds raised under Rule 27, holding that such issues had neither been specifically raised nor decided against the assessee at the first appellate stage.

On merits, the Tribunal upheld the findings of the CIT(A), observing that although the seized material could not be treated as a dumb document and did indicate cash transactions, the factual determination clearly established that the transactions pertained to an earlier assessment year. Relying on settled principles and noting the Supreme Court’s decision in PCIT v. Abhisar Buildwell Pvt. Ltd., the Tribunal held that an addition cannot be sustained in an incorrect assessment year merely on the basis of search material.

Accordingly, the Tribunal affirmed the deletion of the addition and dismissed the Revenue’s appeal.

SOURCE LINK

https://itat.gov.in/public/files/upload/1768200466-VhfAWE-1-TO.pdf

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