"आयकर अपीलीय न्यायाधिकरण में, हैदराबाद “एस एम सी” बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ SMC ‘ Bench, Hyderabad श्री मंजूनाथ जी, माननीय लेखा सदस्य एवं श्री रवीश सूद, माननीय न्याययक सदस्य SHRI G. MANJUNATHA, HON’BLE ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER आयकरअपीलसं./I.T.A.No.1989/Hyd/2025 (निर्धारण वर्ा/ Assessment Year: 2020-21) Shri Deepak Kumar Goel, R/o. Hyderabad. PAN : ADFPK3395J The ACIT, Central Circle-2(3), Hyderabad. (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri R. Mohan Kumar, Advocate. राजस्व का प्रतततितित्व/ Department Represented by : Shri B. Laxmi Kanth, Sr. A.R. सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 17.06.2026 घोर्णध की तधरीख/Date of Pronouncement : 01.07.2026 O R D E R PER MANJUNATHA G., A.M : The present appeal filed by the assessee is directed against the order passed by the Principal Commissioner of Income Tax – 12, Hyderabad (for short “Pr. CIT”) dated 06.10.2025, pertaining to the assessment year 2020-21. Printed from counselvise.com 2 Deepak Kumar Goel ITA No. 1989/Hyd/2025 2. The assessee is an individual and proprietor of M/s. Suraj Ban and Company Jewellers. The assessee filed his return of income for A.Y. 2020-21 on 01.01.2021 declaring nil income. A search and seizure operation u/s 132 of the Income-tax Act, 1961, was carried out in the case of M/s. JP Exports and others on 11.07.2023. During the course of search, it was found that, the assessee had made bogus purchases from M/s. JP Exports and others during the financial year 2019-20. Based on the information received from the Investigation Wing, Rajkot, the assessment was reopened u/s 147 of the Act, and notice u/s 148 of the Act, dated 27.03.2024 was issued and served on the assessee. The case was selected for scrutiny and, during the course of assessment proceedings, the A.O., based on the information received from the Investigation Wing, Rajkot, observed that, the assessee had made purchases of Rs.7,58,920/- from M/s. JP Exports and others. Therefore, the A.O. called upon the assessee to furnish the relevant explanation along with evidences. Since there was no response from the assessee, the A.O. treated the purchases from M/s. JP Exports and others as Printed from counselvise.com 3 Deepak Kumar Goel ITA No. 1989/Hyd/2025 unexplained expenditure u/s 69C of the Act, and made an addition of Rs.7,58,920/-. 3. Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A). Before the learned CIT(A), the assessee submitted that, the A.O. made the addition on the basis of third-party information without providing the necessary details of the information received from the Investigation Wing, Rajkot, and also without providing any opportunity to the assessee to explain his case. It was submitted that, in the absence of any corroborative evidence, the addition made on the basis of third- party information cannot be sustained. Therefore, the assessee submitted that the addition made by the A.O. should be deleted. The learned CIT(A), after considering the relevant submissions of the assessee, observed that the data extracted from J Soft Software was duly examined by the Investigation Wing, Rajkot, and shared with the A.O. in the form of specific reports. The learned CIT(A) further observed that, the A.O. had clearly identified the assessee by name in the extracted records and quantified the unaccounted purchases with date, weight, rate and value. Since the assessee had not offered any explanation, the Printed from counselvise.com 4 Deepak Kumar Goel ITA No. 1989/Hyd/2025 A.O. had rightly treated the purchases to the tune of Rs.7,58,920/- as unexplained expenditure. Thus, the learned CIT(A) rejected the explanation of the assessee and sustained the addition made by the A.O. 4. Aggrieved by the order of the learned CIT(A), the assessee is now in appeal before the Tribunal. 5. The learned counsel for the assessee, Shri R. Mohan Kumar, Advocate, submitted that the learned CIT(A) erred in sustaining the addition without appreciating the fact that the A.O. had made the addition only on the basis of third-party information without sharing the said information with the assessee and also by denying the opportunity of cross-examination, even though the assessee had made a request for the information and for an opportunity of cross-examination. The learned counsel for the assessee further submitted that, the addition made by the A.O. is not based on any information from the assessee. The assessee is not aware of the information and, merely on the basis of a statement of a third party, it cannot be presumed that the purchases from the above party are unexplained. Therefore, he submitted that the addition made by the A.O. should be deleted. Printed from counselvise.com 5 Deepak Kumar Goel ITA No. 1989/Hyd/2025 In this regard, he relied upon the decision of ITAT, Hyderabad Bench in the case of M.R. Estates vs. DCIT in ITA Nos.283 and 284/Hyd/2026 dt.30.04.2026. 6. The learned Senior A.R. for the Revenue, Shri B. Laxmi Kantha, on the other hand, submitted that the addition made by the A.O. is not only on the basis of third-party information, but also based on corroborative evidence in the form of the existence of transactions between the assessee and M/s. JP Exports and others. Further, the evidence found during the course of search in the form of J Soft Software clearly shows that the assessee had made unexplained purchases from the above company. The assessee has not explained the transactions by filing the relevant details. Therefore, the A.O. has rightly made an addition towards unaccounted purchases of Rs.7,58,920 u/s 69C of the Act. The learned CIT(A), after considering the relevant facts, has rightly sustained the addition made by the A.O. Therefore, he submitted that the order of the learned CIT(A) should be upheld. 7. We have heard both parties, perused the material available on record and had gone through the orders of the authorities below. There is no dispute with regard to the fact that the A.O. made an Printed from counselvise.com 6 Deepak Kumar Goel ITA No. 1989/Hyd/2025 addition of Rs.7,58,920/- u/s 69C of the Act, towards alleged unaccounted purchases from M/s. JP Exports and others. The A.O. has come to the above conclusion on the basis of information received from the Investigation Wing, Rajkot, where a search u/s 132 of the Act, was conducted in the case of M/s. JP Exports and others. During the course of search, it was found that, M/s. JP Exports and others was using two different softwares and, on perusal of the J Soft Software, it was found that, the assessee had made bogus purchases to the tune of Rs.7,58,920/-. Except this, there is no corroborative evidence with the A.O. to allege that the assessee had made purchases from M/s. JP Exports and others which were not recorded in the regular books of account. Since the A.O. does not have any corroborative evidence to support the statement of a third party and the information received from the Investigation Wing, Rajkot, in our considered view, the addition made by the A.O. solely on the basis of third-party information cannot be sustained unless the A.O. shares the information with the assessee and also provides an opportunity to rebut the information and an opportunity to cross-examine the person, who gave statement against the assessee. In our considered view, the Printed from counselvise.com 7 Deepak Kumar Goel ITA No. 1989/Hyd/2025 addition made on the basis of third-party information without any corroborative evidence cannot be sustained, because the presumption available u/s 132(4A) r.w.s. 292C of the Act, is not applicable to the assessee. Further, the assessee is not required to explain the transactions unless the assessee has the said information. This principle is supported by the decision of ITAT Hyderabad in the case of M.R. Estates vs. DCIT (supra), wherein it has been clearly held that, the rebuttable presumption u/s 132(4A) r.w.s. 292C of the Act, is not applicable when the A.O. relies upon third-party information for the purpose of assessment. Since the A.O. made the addition only on the basis of third-party information without providing the said information to the assessee, in our considered view, the addition made by the A.O. suffers from violation of the principles of natural justice, as held by the Hon'ble Supreme Court in the case of Andaman Timber Industries Vs. Commissioner of Central Excise, reported in (2015) 62 taxmann.com 3 (SC). Therefore, the addition made by the A.O. cannot be sustained. The learned CIT(A), without appreciating the relevant facts, simply sustained the addition made by the A.O. Thus, we set aside the order of the learned CIT(A) and delete the Printed from counselvise.com 8 Deepak Kumar Goel ITA No. 1989/Hyd/2025 addition made by the A.O. towards alleged unexplained purchases of Rs.7,58,920/- u/s 69C of the Act. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the Open Court on 1st July, 2026. Sd/- (श्री रवीश सूद) (RAVISH SOOD) न्याययक सदस्य/JUDICIAL MEMBER Sd/- (मंजूनाथ जी) (MANJUNATHA G.) लेखा सदस्य/ACCOUNTANT MEMBER Sd/- Hyderabad, dated 01.07.2026. TYNM/sps आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : Deepak Kumar Goel, No.5-9-279, Shop No. B-4, Mayur Kushal Complex, Gunfoundry Abids, Hyderabad – 500001. 2. रधजस्व/ The Revenue : The ACIT, Central Circle – 2(3), Hyderabad. 3. The Principal Commissioner of Income Tax, (Central) Hyderabad. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Hyderabad Printed from counselvise.com TIRUPATI YAMINI NAGA MALLESWARI Digitally signed by TIRUPATI YAMINI NAGA MALLESWARI Date: 2026.07.06 10:09:07 +05'30' "