Additions regarding unexplained investments based on seized documents are unsustainable if the assessee demonstrates the entries belong to third parties, are double additions of previously declared income, or represent correctly calculated peak investments rather than total loan amounts.

O R D E R

Per Rajesh Kumar, AM:

This is an appeal preferred by the Revenue against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 22.01.2025 for the AY 2001-02.

2. At the outset, we note that the appeal of the assessee is barred by limitation by 150 days. At the time of hearing the counsel of the assessee explained the reasons for delay in filing the appeal. The Ld. D.R did not raise any objection in condoning the delay. After hearing the rival contentions and perusing the materials available on record, we find that the delay is for bonafide and genuine reasons and , hence, we condone the delay and adjudicate the appeal.

3. The issue raised in ground no.1 is against the order of ld. CIT (A) deleting the addition of ₹38.00 lacs as made by the ld. AO in respect of cash loan provided to different parties based on the seized document IDPSA/1, when the assessee failed to provide the peak credit.

3.1. The facts in brief are that during the course of assessment proceedings, the ld. AO noted that the assessee was not maintaining any books of account. The AO observed on the basis of incriminating document, PSA/1, page no. 24 and 25, that the assessee has invested on advancing loans to different parties aggregating to ₹38.00 lacs which was not disclosed by the assessee. The ld. AO noted that since the assessee has not provided peak, therefore it could not be ascertained whether the said loans were refunded. Consequently, the entire amount of cash loans was added as undisclosed investment out undisclosed income to the income of the assessee.

3.2. In the appellate proceedings, the ld. CIT (A) deleted the addition by observing and holding as under:-

“Thus, it has already been held that the entries in the name of MAA belongs to mother of the assessee and cannot be added in the hands of the assessee. I further found that the Ld. ITAT has deleted the addition of Rs. 15,50,000/- for FY 2001-02, Rs. 16,00,000/- for FY 2000-01 and 50,00,000/- for FY 1996-97 on account of investments which also stood in the name of mother. I find that in the process the Ld. ITAT has also made observations with regard to seized paper PSA/1 page 25 in which it is clearly stated that the said paper also belonged to the mother of the assessee. I further find that in the details of investment in PSA/1 page 25, there are names of P K Kothari, Jhawar Trading, Eastern Confectionery Bharati Eng co. which names also appeared in another seized paper HR/28 at page 3 to 7 for which additions have been separately made. The said addition is disputed by the assessee vide ground no. 5. In the said details of investment also the name of mother KDA is clearly found by the AO himself. Thus, there cannot be any dispute that the said investment belonged to mother of the assessee Smt K D Agarwal. I also find that the investment of Rs. 38 lakhs in the name of mother were appearing in FY 2001-02 whereas higher peak investment ofRs.50 lakhs by way of loan was made in FY 199697 by the mother which was deleted by the Ld. Tribunal as belonging to the mother. Further It appears from noting in the seized papers that Rukka are generally for 1 month or maximum 7 months as appears in HR/28 page 4. Therefore, earlier amount of Rs. 50,00,000/- taking into account the peak was also available with the mother for advancing loan in FY 2000-01. Thus, the addition made by the Ld. AO is deleted.”

3.3. After hearing the rival contentions and perusing the materials available on record, we fi