IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI BEFORE SHRI SUDHIR KUMAR, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 1017/DEL/2025 (Assessment Year : 2015-16)

JCIT (OSD), JHANDEWALAN, vs. NARENDRA AGGARWAL, DELHI H.NO. 467, SECTOR-21-A, FARDIDABAD, HARYANA (PAN: AAGPA1441D)

(APPELLANT) (RESPONDENT)

ASSESSEE BY : Dr.Rakesh Gupta, Adv., Sh. Somil Agarwal, Adv., Saksham Agarwal, CA & Deepesh Garg, Adv.

REVENUE BY : Ms. Amisha S. Gupt, CIT DR Date of Hearing : 04.11.2025 Date of Order : 19.12.2025

O R D E R

PER SUDHIR KUMAR, JM :

This appeal is preferred by the Revenue against the order of ld.

Commissioner of Income-tax (Appeals)-26, New Delhi (hereinafter referred to ‘Ld.

CIT (A)’) dated 28.11.2024 for AY 2015-16.

2. Heard and perused the grounds. The brief facts giving rise in this appeal are that the assessee is an individual and filed his return of income u/s. 139(1) of the Act for AY 2015-16 on 20.8.2015 at total income of Rs. 6,20,97,150/-. Pursuant to a Warrant Authorization issued by the Director of Income Tax (Inv.), Delhi a search operation u/s. 132 of the Act was carried out in Sh. Puneet Kulthia by the Investigation Wing, Delhi on 08.03.2017 and on subsequent dates at different business and residential premises of Sh. Puneet Kulthia. Various incriminating papers/ documents were found and seized during the course of search and seizure operation in the group cases. The AO passed the assessment order u/s. 143(3) of the Act on 27.12.2017 wherein the returned income was accepted at Rs. 6,20,97,150/-. Accordingly, the claim of short term capital gains on sale of shares of M/s KD Trend Wear Limited and M/s Parnav Sports Academy Limited was not disturbed. Thereafter, the PCIT initiated the proceedings under section 263 of the Act and set aside the assessment order passed by the AO u/s. 143(3) in terms of the provisions of section 263 of the Act and directed the AO to frame fresh assessment after considering the observations of PCIT in the order passed u/s. 263 of the Act on 31.3.2021 to reexamine the issue of short term capital gains involving penny stock. Subsequently, on appeal filed by the appellant before the ITAT against the order passed by the PCIT under section 263 of the Act, the ITAT, Delhi Bench vide its order in ITA No. 456/Del/2021 dated 04.04.2022 set aside the aforesaid order of PCIT passed under section 263 of the Act. Subsequently, the Department went in appeal before the Hon’ble Delhi High Court against the order passed by the ITAT and the Delhi High Court upheld the stand of the ITAT and decided the matter in appellant’s favour in its order dated 17.9.2024. In the meantime, another proceeding under section 153C of the Act was initiated on 09.10.2021 consequent to a search action conducted under section 132 of the Act in the case of Shri Puneet Kalthia on 08.03.2017. The basis of initiation of this proceedings would be understood if one refers to the satisfaction note of the AO of the appellant (non- searched person). The satisfaction of AO of the appellant was submitted during the course of appellate proceedings. The satisfaction note dated 17.09.2021 indicates a document in A-8 of panchanma dated 09.03.2017 which was found and seized from the premises of Puneet Kulthia containing certain communications through Apple phone between Puneet Kulthia and the appellant in respect of cash transactions. The digital data were put in a consolidated manner as per the satisfaction note. This indicates that the purported cash transactions are relating to a period from 07.12.2015 to 09.12.2015 pertaining to AY 2016-17. However, the assessment proceeding was completed under section 143(3) read with section 153C of the Act on 27.12.2022 wherein addition u/s. 143(3) of the Act was made on account of unexplained cash credit u/s. 68 of the Act in respect of involving penny stock involving sale of shares of M/s KD Trend Wear Limited and M/s Parnav Sports Academy Limited. In appeal, Ld. CIT(A), de