SACHIN SHRIKANT NAIK,SANTACRUZ EAST, MUMBAI vs. DY. COMMISSIONER OF INCOME TAX - 42(3)(1), MUMBAI, MUMBAI

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated
27.01.2025 passed by the Ld. Commissioner of Income-tax
(Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld.
CIT(A)’] for assessment year 2015-16, raising following grounds :
1. On the facts and in the circumstances of the case and in law the Learned Commissioner of Income Tax (Appeals) NFAC has erred in dismissing the appeal filed by the assessee, thereby upho
Rs. 50,88,000
2. On the fac law the Learn is not justified the source of of immovable
3. On the fac law the Learn has erroneo instalment of compared to property was loan is being
4. On the fac law the Learn is not justified cross verify th
50,88,000/- f is against the reassessment
5. On the fac law the Learn has ignore th
Re-Assessme showcasing t whole of the needs to be 2. Briefly stated, fa employee filed return
26.08.2015 declaring income was processe short ‘the Act’).
2.1 Subsequently,
Officer from the of olding the addition made by Assessing O
0/- u/s 69A of the Income Tax Act, 1961. cts and in the circumstances of the case ned Commissioner of Income Tax (Appea d in opining that the assessee has failed f cash paid to the builder at the time of p property.
cts and in the circumstances of the case ned Commissioner of Income Tax (Appea ously opined that the assessee's f the housing loan repayment is very his total income. CIT(A) ignored the fact purchased by the assessee with his spo repaid by both of them.
cts and in the circumstances of the case ned Commissioner of Income Tax (Appea d in not accepting the request of the Ass he builder and his claim of receipt of cas from the assessee to purchase the flat. H e interest of natural justice and the who t proceedings shall be quashed.
cts and in the circumstances of the case ned Commissioner of Income Tax (Appea he gross errors identified by the assesse nt
Order through his submission, the confusion of the Assessing Officer e reassessment proceedings are not va quashed.
acts of the case are that the ass n of income for the year under c g total income of Rs.22,99,270/
ed u/s 143(1) of the Income-ta information was received by ffice of the Director General
Sachin Shrikant Naik
2
Officer of e and in ls) NFAC d to prove purchase e and in ls) NFAC monthly high as that the ouse and e and in ls) NFAC sessee to sh of Rs.
Hence, it ole of the e and in ls) NFAC ee in the thereby r. Hence, alid and sessee a salaried consideration on /-. The return of ax Act, 1961 (in the Assessing of Income-tax

(Investigation), Mumb carried out on 21st
Group. The said inve in the practice of rec as “on-money”, ov consideration in resp
“Runwal Green”. Ce evidencing such cash said proceedings, Sh
Group, in his statem admitted that the se recorded in the regul
2.2 The information herein had purchase project and was a ₹50,88,000/– as par information, the Asse income chargeable to issued notice under s
2.3 In response the 28th April, 2017 decl reassessment procee question was jointly consideration of ₹1,5

bai, that a search and survey a November, 2014 in the case estigation revealed that the grou eiving cash consideration, comm er and above the stated pect of flats sold in its real esta rtain incriminating documents h receipts were also seized. In th hri Subodh Runwal, Director ment recorded under section 13
eized data pertained to cash t ar books of account.
n so received further indicated th ed Flat No. T8-1604 in the said alleged to have made a cas rt of the consideration. On th essing Officer recorded reasons o tax had escaped assessment, section 148 of the Act on 29th M ereto, the assessee filed a retur laring total income of ₹24,45,53
edings, the assessee explained y purchased by him and his w
6,12,000/–, payable in stages c
Sachin Shrikant Naik
3
action had been of the Runwal up was engaged monly described value of sale ate project titled s and materials he course of the of the Runwal
32(4) of the Act, ransactions not hat the assessee d Runwal Green sh payment of he basis of this s to believe that and accordingly
March, 2017. rn of income on 30/–. During the that the flat in wife for a total corresponding to construction progres and service tax, wa stated that all paym cheques or by way whatsoever had been 2.4 The Assessing explanation, and in “credible rebuttal”,
₹50,88,000/– as un section 69 of the Ac assessee.
3. Upon appeal,
(Appeals) sustained
CIT(A), in essence, w obtained a housing certified copy of such CIT(A) further observ justify his capacity t and therefore the a unexplained.
Concl substantiate the sou upheld the action of CIT(A) is reproduced s. The total cost, inclusive of st as approximately ₹1.82 crores.
ments were made either through of bank loan, and that no c n paid.
Officer, however, was not sat the absence of what he cons proceeded to treat the al nexplained investment within t t, thereby adding it to the tota the learned Commissioner the addition. The reasoning was that although the assessee loan of ₹1.35 crores from H h bank documentation had been ved that the assessee’s declared to service a loan with such hi alleged cash payment of ₹50, luding that the assessee urce of such investment, the the Assessing Officer. The relev as under:
Sachin Shrikant Naik
4
tamp duty, VAT,
It was further h account payee cash component tisfied with the sidered to be a lleged sum of the meaning of al income of the of Income-tax of the learned claimed to have HDFC Bank, no n produced. The d income did not igh instalments,
88,000/– stood had failed to learned CIT(A) ant finding of ld

“4.3 I have go
In the instant and the recor submitted tha however, the the same and repayment of appellant as h
26.08.2015,
Considering t the unexplain valid explana concerns reg documents fo value of the f a portion of th
Given that the payment, low monthly inst unexplained assessee und the Assessin provide adeq cash paymen
4. Aggrieved, the a of raising grounds as 5. Before us, the L
Book containing pag of orders passed b analogous matters ar
5.1. The learned cou
Tribunal in Shri
812/Mum/2022 dat
Santosh Kadam v.

one through the assessment order and re t case, I have carefully examined the ass rd available in this case. During appea at he had taken loan from HDFC bank of R appellant has not submitted any bank c d the amount of Rs. 135455/- as monthl f loan appears to be beyond financial his return of income for the assessment y declaring a total income of Rs. 24
the significant discrepancy in the disclos ned cash payment. The assessee is unab ation or source for the cash payment, whic arding the financing of the transaction ound during the search action confirmed flat was higher than the declared agreem he payment made in cash.
e assessee failed to substantiate the sou w disclosed income and very high house l talments the Assessing Officer right investment of Rs. 50,88,000 to the tota der section 69 of the Income Tax Act. The ng Officer is justifiable, as the assess quate documentation or a credible expla nt necessitated the addition under section assessee is in appeal before the T s reproduced above.
Ld. counsel for the assessee ha es 1 to 147 and drew our atten by co-ordinate Benches of th rising from the same Runwal Gr nsel specifically relied upon the Shrirang
Vijay
Rao v.
ITO ted 3rd August, 2022, and i
ITO in ITA No. 227/Mum/20
Sachin Shrikant Naik
5
ecord available.
sessment order l, the assessee
Rs. 135.67 lacs certified copy of ly instalment of capacity of the year 2015-16 on 4,45,530 only.
sed income and ble to provide a ch led to further n. As per AO, that the actual ment value, with urce of the cash loans with high tly added the al income of the action taken by see's failure to anation for the n 69.”
Tribunal by way as filed a Paper ntion to a series his Tribunal in reen project.
e decision of the O in ITA No.
in Smt. Shreya
024 dated 17th

March, 2025. Both ca same project, wher grounds—namely, th
Group and the docum
5.2. Reliance was fu
Tribunal in Runwa
5625/Mum/2017 da basis of the alleged o itself was examined t
6. We have heard the relevant materi regarding the cash c paid by the assessee
‘Runwal Group’ of t search of said group has its sole foundati
Runwal Group recor seized from the prem that any material or assessee’s possessio payment. The co-ordi
Pvt. Ltd. (supra), afte and the statement of Officer had grossly er ases pertained to purchasers of rein additions had been mad he alleged admission of the Dire ments found during search.
urther placed upon the semina al Homes Pvt. Ltd. v. DCI ated 20th December, 2017, wh on-money addition in the case o threadbare and deleted.
rival submissions of the parti als on record. In the case, component of Rs.50,88,000/- on the basis of the statement o the companies and documents
. Thus, the impugned addition ion in (i) the statement of the rded under section 132(4), and mises of that group. It is not the evidence was found during pro on or control to substantia inate Bench of this Tribunal, in r an exhaustive analysis of the f Shri Subodh Runwal, held tha rred in extending the surrender
Sachin Shrikant Naik
6
flats in the very de on identical ector of Runwal al order of this IT in ITA No.
herein the very of the developer ies and perused the dispute is alleged to have of the director of s found during of ₹50,88,000/–
Director of the d (ii) documents e Revenue’s case oceedings in the ate such cash n Runwal Homes seized materials at the Assessing red figure of on- money, pertaining to project merely on es made by the Directo post-January 2014 a existed. The Tribuna mere presumptions a 6.1. Following the a Vijay Rao (supra) an purchasers of flats additions of alleged substantive addition deleted, no conseque hands of the purchas case of Shrirang Vijay
“8. Heard bo record. Witho through the Runwal Home of unit purch operating par
“8. Now com
63,39,52,372
Assessing Off
3 and Comm
Greens Towe
63,39,52,372
the seized m
19,94,78,821
already been account by t submitted by o a few identified flats, to all u stimation. It was observed that r was confined to certain speci and that no evidence of univers al, therefore, deleted the addi and estimation.
aforesaid decision, the Bench i nd Smt. Shreya Santosh Kadam in the same Tower No. 8—
d cash components, holding in the hands of the developer ential or derivative addition coul sers. The relevant finding of the y Rao (supra) is reproduced as u oth the parties and perused the materia ut reiterating the fats as referred above, decision of ITAT as referred (supra) in es Pvt. Ltd. wherein addition pertaining t hased by the assessee was deleted.
ra of the said decision of ITAT is reproduc ming to the other addition included in th
2/-. The following additions were m fficer - 1 Project namely Runwal Greens T mercial Rs. 31, 14,02,412/- 2 Project na ers 4, 5, 6, 7 & 8 Rs. 31,52,99,960
2/- It is not disputed that the on-money o material received by the assessee c
/-out of which the addition of Rs.72, n confirmed by us and has been duly the assessee in the revised computati the assessee during the course of hear
Sachin Shrikant Naik
7
units sold in the t the admission ific transactions al cash receipts itions made on in Shri Shrirang m (supra)—both
—deleted similar that when the itself had been ld survive in the e Tribunal in the under:
al available on we had gone n the case of to the category
The relevant ced as under:
he sum of Rs.
made by the Towers -1,2 &
amely Runwal
0/- Total Rs.
on the basis of comes to Rs.
50,000/- has y taken in to ion of income ring before the Assessing Off
Now the que amounting to the seized ma period of the b amount so wo
On-money of f
On-money of s
Out of the sai in the preced seized mater
Assessing Off course of sea
2014 took th money in all on other units although no search. The A on the statem statement of question nos.
"Ans to Q.16
reiterate that right from th market has b land we had calendar year to pay part co is specificall accommodate reiterate and for any of the Thus the ass accepted that Further the as unaccounted commercial u relevant portio
"Q.17 Please practice is foll fficer and on which the assessee has duly estion before us remains to the dispu
Rs.62,67,02,372/- The total on money o aterial found during the course of search booking done from March 2014 to Novem orked out comes to` 19,94,78,821/- as de flats as per seized material - Rs. 13,44,68
shops as per seized material - Rs.6,50,10
id sum 72,50,000/- has already been co ding paragraph, therefore, on-money on rial remains at `19,22,28,821/-. We n fficer on the basis of seized material fou arch relating to the period of March 2014
he view that the assessee might have the bookings and therefore, he estimated s sold by taking the highest rate of sale on-money evidence were found during
Assessing Officer while confirming the a ments of the staff of the assessee as the Director Shri Subodh Runwal, main
16, 17 and 18, which are reproduced as 6 "Sir as I have answered in earlier que t this project was a joint venture with H e inception till they exited. Subsequent become very competitive and due to open to sell aggressively to achieve the num r 2014, I accommodated a few customers onsideration in cash. The difference in th ly related to these customers who ed. I offer this difference as my income. I h state that prior to this we have never acc units sold in that project."
sessee has acknowledged the discrepa t "on-money" has been taken in all the abo ssessee was asked to state the other ins cash has boon taken in lieu of sale of units in their projects. Following Is the on of his statement provide the details as to other fiats in lowed.
Sachin Shrikant Naik
8
y paid the tax.
uted addition on the basis of h relate to the mber 2014. The etailed under:-
8,725/-
0,096/- nfirmed by us n flats as per oted that the und during the 4 to November e received on- d cash portion of other units the course of addition relied s well as the nly in reply to under:
estion I again
HDFC Limited tly to that the ning of a forest mbers from the s who wanted he above chart o have been hereby farther cepted in cash ancy and has ove instances.
stances where f residential /
except of the which similar

Ans: Although cash has been But to avoid p peace I accep
1st January 2
the regular in received over working mark pages.
Q.18 As per th question num namely Runw
Rs.63,39,52,3
Ans; Sir, due
63,39,52.372
accepted in th
Limited), and and above th
Limited. Here proprietorship
We have gone
We noted tha company sta
HDFC Limited competitive a sell aggressiv year 2014 an who wanted for few units.
have never a categorically s been accepted surrender the regular incom protracted liti basis the Rs.63,39,52,3
undisputed fa produced befo
441 of the pa seized docum
13,44,68,725
For the rest material was h in the other cases, I do not agree that in n accepted by me over and above the agr protracted litigations with the departmen pt the difference appearing in the chart b
2014 till date as my additional income ov ncome for the respective years as on- r and above the agreement value), I am s ked as Annexure~1 to this statement w he working submitted as part of annexur mber 16, the amount of on money accepted wal Greens (M/s Runwal Homes Privat
372/- Please confirm ?
to reasons mention above I confirm the 2A (which as per Annexure-1), as th he projects Runwal Green (M/s. Runwal H the same has been offered as additiona he income declared in the M/s. Runwal H e / want to state that Olive project p of Mr. Subhash Runwal."
e through the answer to question nos. 1
at in reply to question no.16, Director of ated that initially the project was joint d. Subsequently, when the market has and due to the opening of the forest land vely, in order to achieve the numbers from nd, therefore, in order to accommodate f to pay part consideration in cash, they a He has categorically stated that prior to accepted any cash. In reply to question stated that he did not agree that in all ca d over and above the agreement value bu e difference as its additional income over a me for the respective years as on-mo igations with the department and buy p total on-money received was wor
372/- and added to the income of the a act that on the basis of the documents ore us, the copy of which are available at aper-book, the on money received, on th ments, by the assessee in respect of f
5/-and in respect of shops comes to ` 6
of the addition in respect of which no found, we noted from pages 439 to 441
Sachin Shrikant Naik
9
n all the cases reement value.
nt and to buy beginning from ver and above money (Cash submitting the which has two re to answer to d in the project te Limited), is amount of Rs.
he on money
Homes Private al income over
Homes Private is under the 6, 17 and 18. f the assessee venture with become more d they had to m the calendar few customers accepted cash that date they no.17, he has ases cash bas ut he agreed to and above the oney to avoid peace. On that rked out at assessee. It is and evidence t pages 436 to he basis of the flats comes to 6,50,10,096/-.
incriminating
1 of the paper book, the Ass
@15,750/- pe shops @26,00
Officer was fa found but had per sq. ft. for completed u/s Assessing Off in the docume is on the Rev the considera stated in the the assessee knowledge by on the order o
Director of th received cons per sq. ft. for of the assess much more t evidence is fo addition can the statute. T which no mat with the dep income; the o accrued to th a search in t earned such that either the account or ha tax is leviable not accrued o burdened for record, it is a booking amo would have r the assessee shops @2600
evident that d different rates as found du discount on t
We noted tha been mention around Rs. 41
including the sessing Officer just estimated the on-mon er sq. ft totaling to Rs.33,47,33,101/- an 00/- totaling to Rs. 9,97,40,450/-, But fair enough to state that no incriminating d estimate @15750/- per sq. ft for flats a r shops. This is a case where assessm s. 143(3), therefore, the addition has been ficer as if the assessee has received wha ents executed by the assessee. In our opi venue to prove that the assessee has act ation much more than what has been documents executed between the intend
. No cogent material or evidence was b y the learned DR even though he has veh of the Assessing Officer as well as the sta he company, which may prove that the sideration @15750/- per sq. ft for flats a shops. There has been search and seizu see. If the assessee would have received than what is stated in the documents, found during the course of search, in ou be sustained. There cannot be any agree
The assessee agreed for declaration of t terial was found merely to avoid protrac partment and buy peace. The assessee onus is on the Revenue to prove that th e assessee. Even otherwise also since th the case of the assessee, if the assesse income there must have been some ev e assessee has made investment outside as spend this income in one way or the e u/s. 4 of the I.T Act on the real income.
or received by the assessee, the assess income tax liability. From the documents apparent that the Assessing Officer has unt and on that basis assumed that received the on-money. He made the pres has sold all the flats @15750/- per s
00/- per sq. ft. From the documents in the different flats and different shops have b s by the assessee. From page 443 of th uring the course of search, the assess the bookings at different rates to differe at in respect of two shops although the ed @21,000 per sq. ft, the assessee has g
150 per sq. ft. and booked the shops @17
club charges of Rs.750/-. Similarly, in Sachin Shrikant Naik
10
ney of the flat nd that of the the Assessing material was and @26000/- ment has been n made by the tever is stated inion, the onus tually received agreed to or ded buyer and brought to our emently relied atement of the assessee has and @26000/- ure in the case consideration for which no ur opinion, no ement against the income for cted litigations e has earned he income has here has been ee would have vidence found e the books of other. Income
If income has see cannot be s available on estimated the the assessee sumption as if sq. ft and the e booking, it is een booked at he paper-book, see has given ent customers.
base rate has given discount
7500 per sq. ft respect of flat also we noted sq. ft and aft total rate cam given discou
@13,350 per the flats whi
13225/- per
Assessing Of assumption a @15750 per s
In view of th made on the the flats @15
presumption a As per the de deleted the p
'on money' on as elaborated form the fact
No.8 in the p basis, therefo addition of Rs residential un following the Homes Pvt. Lt impugned ad assessee are 6.1 In the case of Sh followed the decision present case stands assessee is located in evidencing payment brought on record. I making addition in t the documents found statement of the Dire d that the base rate has been mentioned @
fter adding floor rise, club charges, infra me to Rs.14375 per sq. ft. and the asses unt of Rs. 1000/- and ultimately boo sq. ft. Even on the same very page had ich had been booked @ 14550/-, 143
r sq. ft. Therefore, the conclusion dr fficer while making the addition is b as if the assessee the assessee has sol sq. ft.
his fact, we delete the addition of Rs. 3
basis of estimating the sale consideration
5750/- per sq. ft. and Rs. 9,97,40,450/- as having being booked shops @26000/-.
ecision of the ITAT (supra), it is clear that part of the addition which was based on n flats where no incriminating document d in the finding of ITAT. It is categoricall ts reported (supra) that addition in resp project viz. "Runwal Green" were made fore the decision of the Id. CIT(A) in s s.31,28,000 in the case of the assessee f nit No.T8-1604 in Tower 8 is not justif e decision of ITAT, Mumbai in the cas td. (supra), we direct the Assessing Office ddition. Accordingly, the Ground Nos. 2
e allowed.”
hreya Santosh Kadam (supra) a n in the case of Shrirang Vijay R on identical footing. The flat pu n Tower No. 8 of the same proje of cash by the assessee has n view of the above precedents the case of the assessee of Rs.5
d at the premises of the Runwa ector of the said company. Since
Sachin Shrikant Naik
11
@12,000/- per a charges etc., ssee has also oked the flat the details of 00/- and Rs.
rawn by the based just on d all the flats
3,47,33,101/- n in respect of based on the ."
t the ITAT has n estimation of ts were found ly established pect of Tower on estimation sustaining the for purchasing ified therefore se of Runwal er to delete the 2 to 4 of the also the Tribunal
Rao (supra). The urchased by the ect. No material been found or s, only basis for 50,88,000/- was al Green and the e addition in the said company itself deleted by the Co-o foundation of the Tribunal’s earlier dec cannot, in law or on f
6.2 We also deem it learned CIT(A) regard a bank loan are wh matter under appeal assessee’s creditwort duly disbursed throu the existence or oth observations, therefo appellate record.
6.3 In view of the f the binding preceden the cases cited (supr made under section 6
is accordingly directe assessee are allowed.
7. In the result, th f for on-money payment rece ordinate Bench of the Tribun
Revenue’s case being demo cisions, the impugned addition fact, be sustained.
t appropriate to observe that the ding the assessee’s financial cap holly extraneous to the issue l pertains to an alleged cash thiness to avail of a sanctioned ugh banking channels, bears herwise of such unrecorded ore, are directed to be expu foregoing discussion and respe nt of the co-ordinate Benches of ra), we hold that the addition o
69 of the Act is unsustainable in ed to be deleted. The grounds
.
he appeal of the assessee is allow
Sachin Shrikant Naik
12
eived has been al. The entire olished by the of ₹50,88,000/–

e remarks of the pacity to service before us. The investment; the d housing loan, no relevance to payment. Such unged from the ctfully following this Tribunal in of ₹50,88,000/–
n law. The same of appeal of the wed.

Order pronoun (NARENDER KUMA
JUDICIAL M
Mumbai;
Dated: 27/10/2025
Rahul Sharma, Sr. P.S.

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

////

ced in the open Court on 27/
d/-
AR CHOUDHRY)
(OM PRAK
MEMBER
ACCOUNTA ded to :

BY ORDER

(Assistant Re

ITAT, Mu

Sachin Shrikant Naik
13
10/2025. KASH KANT)
ANT MEMBER
R, gistrar) umbai