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Facts
The assessee filed her return of income for AY 2011-12. Information received by the AO suggested cash payments for a property purchased by the assessee. The AO reopened the case and made an addition of Rs. 70,00,000/- on a protective basis under section 69B, which was upheld by the CIT(A).
Held
The Tribunal held that the claim of the revenue regarding cash payment over and above the agreement value was not tenable, especially considering the stamp duty valuation of the property and the fact that the entire payment was made by cheque. The addition made by the AO was deleted.
Key Issues
Whether the addition of Rs. 70,00,000/- on account of alleged cash payment for property purchase, made on a protective basis, is justified when the entire payment was made by cheque and the property's stamp duty valuation is significantly lower.
Sections Cited
143(3), 147, 69B, 115BBE, 271(1)(c), 234A, 234B, 234C, 148, 250, 132
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Before: SHRI BEENA PILLAI & SMT.RENU JAUHRI
Date of Hearing 13.10.2025 Date of Pronouncement 31.10.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :-
This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 20.02.2023 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Year [A.Y.] 2011-12.
P a g e | 2 ITA NO. 272/mum/2025.
The grounds of appeal are as follows:
“1) In the facts and the circumstances of the case and in law, the learned A.O. erred in passing the reassessment order u/s 143(3) r.w.s147 which is bad in law a) merely on the basis of information received from the DDIT(Inv) Unit 1(4) of who has conducted search operation on Cosmos group and on the basis of borrowed satisfaction b) merely on the basis of suspicion, surmises and conjectures and without any material on record c) Relying on third party statements and without corroborating evidence d) without providing the statements recorded on the basis of which the additions are ame and without giving the appellant an opportunity of cross examination e) Without providing reasons recorded for reopening f) Without granting an opportunity of being heard 2) In the facts and the circumstances of the case and in law, the learned A.O. erred in making addition of Rs. 70,00,000/- u/s 69B r.wis 115BBE thereby wrongly holding that the Appellant has made cash payments towards the purchase of residential flat at Cosmos Regency, Flat No. 6D Astra Spring Bella, Cosmos Spring of Cosmos Group on the information received from Investigation unit Addl DIT(Inv) Unit-1, Mumbai. a) Without appreciating the fact that the said property mentioned in the notice is registered under the Appellant's name vide agreement dated 06-08- 2009 having an agreement value of Rs. 29,50,000/- which is paid through cheque and is already disclosed in her books of accounts b) Thereby disregarding the fact that the agreement value is Rs. 29,50,000/- and therefore the question of payment on money of Rs. 70,00,000/- does not arise. c) Even though the Appellant has denied any cash payments made towards the purchase of property vide her submission dated 28.12.2018. d) Thereby disregarding the fact that the same addition is already made in her spouse case on substantive basis and therefore leads to double addition e) Without giving the appellant any opportunity for cross-examination of the persons on the basis of whose statement addition is made. f) In common law parlance, an admission made by one party is evidence against the maker of the statement but not against any other party implicated by it. g) Addition made by the Ld AO is merely a borrowed satisfaction and not his own satisfaction.
P a g e | 3 ITA NO. 272/mum/2025. h) Without considering the various submissions made by the Appellant 3) In the facts and circumstances of the case and in law, the Assessing Officer erred in wrongly initiating penalty u/s 271(1)(c) and also wrongly charging interest u/s 234A, B & C. 4) In the facts and circumstances of the case and in law, the Commissioner of Income Tax[A] erred in dismissing all the grounds of appeal on merits by overlooking the fact and legal submissions made and also without granting an opportunity of personal hearing through video conferencing thereby violating principles of natural justice.”
3. At the outset, it is seen that the appeal is delayed by 380 days. The assessee has filed an affidavit and application for condonation of delay on the ground that her husband was unwell and had to undergo angioplasty in December 2023. Assessee could not pay attention to the tax matters during this period being pre-occupied with husband’s healthcare and recovery. Considering the submissions of the assessee, we condone the delay as the same appears to be for bonafide reasons.
The brief fact of the case are that the assessee filed her return of income for A.Y. 2011-12 on 03.12.2011 declaring total income of Rs. 11,50,550/-.
Subsequently, information was received by the AO from the Investigation Wing relating to payment of on money by buyers of flats in the Cosmos group of companies unearthed during the course of search conducted u/s. 132 on the Cosmos group. It was seen that the assessee is one such purchaser and has purchased a flat from the group company in Bella Spring II jointly with her husband Shri. Shreyas Talpade. Based on the information regarding payment of cash of Rs. 70,00,000/- during F.Y.
2010-11 and Rs. 1,00,000/- during F.Y. 2012-13 by the assessee for the purchase of flat, the case was reopened u/s. 148 of the Act. The assessee
P a g e | 4 ITA NO. 272/mum/2025. denied having made any cash payment for purchase of property i.e 6D, Astra, Spring Bella, Cosmos Regency. It was submitted that she had purchased the property for Rs. 29,50,000/- in her single name and the amount mentioned in the notice is also incorrect. She claimed that no addition was warranted in her hands as her name does not appear in any of the statements of the searched persons, relied upon by the AO.
However, ld. AO did not accept the assessee’s contentions and made an addition of Rs. 70,00,000/- in the hands of the assessee on protective basis u/s. 69B of the Act. Aggrieved, the assessee preferred an appeal before ld. CIT(A), who has also dismissed her contention with the following observations:
“I have carefully considered the facts of the case as well as submissions filed by the appellant. I find no force in the arguments taken by the appellant. The only defense of the appellant is that the addition has also been made in case of his husband. However, her name also appears in the ownership documents. Accordingly, the AO has made the addition on a protective basis. This addition is has rightly been made and if at all the same is confirmed in the hands of her husband, it would be automatically deleted in her hand. The ground of appeal no. 1 is dismissed.” Further aggrieved, the assessee is in appeal before us.
We have heard the rival submissions and perused the material placed on record. As has been discussed and held in the case of her husband, Shri Shreyas Talpade, the claim of the revenue that Rs. 70,00,000/- was paid in cash over and above the agreement value of Rs. 29,50,000/- is not tenable especially in view of the fact that the property measuring 710 sq ft. is located in Thane and its stamp duty valuation is merely Rs. 15,38,100/- as per copy of registration certificate filed by the assessee.
P a g e | 5 ITA NO. 272/mum/2025.
Further entire payment of Rs. 29,50,000/- has been made by cheque by taking bank loan and from own sources by the assessee. Accordingly, we hereby delete the addition of Rs. 70,00,000/- made u/s. 69B on protective basis in assessee’s hands. 6. In the result, the appeal of the assessee is allowed.
Order Pronounced in Open Court on 31.10.2025