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Facts
The assessee, a salaried employee, purchased a flat and allegedly made a cash payment of Rs. 50,88,000/- towards the consideration. The Assessing Officer treated this as unexplained investment and made an addition. The CIT(A) upheld the addition.
Held
The Tribunal held that the addition was based on the statement of the developer's director and seized documents from the developer's premises. However, similar additions made in the developer's case were deleted by the Tribunal, and the assessee's case was on identical footing. Therefore, the addition was unsustainable.
Key Issues
Whether the addition of Rs. 50,88,000/- on account of alleged cash payment for a flat is sustainable when the foundation of such addition (developer's statement and documents) has been found to be unreliable in other similar cases.
Sections Cited
69A, 143(1), 132(4), 148, 69, 4
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Income Tax Appellate Tribunal, MUMBAI BENCH “B” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI NARENDER KUMAR CHOUDHRY
ORDER 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 upholding the addition made by Assessing Officer of thereby upholding the addition made by Assessing Officer of thereby upholding the addition made by Assessing Officer of Rs. 50,88,000/ Rs. 50,88,000/- u/s 69A of the Income Tax Act, 1961.
2. On the facts and in the circumstances of the case and in 2. On the facts and in the circumstances of the case and in 2. On the facts and in the circumstances of the case and in law the Learned Commissioner of Income Tax (Appeals) NFAC law the Learned Commissioner of Income Tax (Appeals) NFAC law the Learned Commissioner of Income Tax (Appeals) NFAC is not justified in opining that the assessee has failed to prove is not justified in opining that the assessee has failed to prove is not justified in opining that the assessee has failed to prove the source of cash paid to the builder the source of cash paid to the builder at the time of purchase at the time of purchase of immovable property. of immovable property.
3. On the facts and in the circumstances of the case and in 3. On the facts and in the circumstances of the case and in 3. On the facts and in the circumstances of the case and in law the Learned Commissioner of Income Tax (Appeals) NFAC law the Learned Commissioner of Income Tax (Appeals) NFAC law the Learned Commissioner of Income Tax (Appeals) NFAC has has has erroneously erroneously erroneously opined opined opined that that that the the the assessee's assessee's assessee's monthly monthly monthly instalment of the housing loan repayment instalment of the housing loan repayment is very high as is very high as compared to his total income. CIT(A) ignored the fact that the compared to his total income. CIT(A) ignored the fact that the compared to his total income. CIT(A) ignored the fact that the property was purchased by the assessee with his spouse and property was purchased by the assessee with his spouse and property was purchased by the assessee with his spouse and loan is being repaid by both of them. loan is being repaid by both of them.
On the facts and in the circumstances of the case and in 4. On the facts and in the circumstances of the case and in 4. On the facts and in the circumstances of the case and in law the Learned law the Learned Commissioner of Income Tax (Appeals) NFAC Commissioner of Income Tax (Appeals) NFAC is not justified in not accepting the request of the Assessee to is not justified in not accepting the request of the Assessee to is not justified in not accepting the request of the Assessee to cross verify the builder and his claim of receipt of cash of Rs. cross verify the builder and his claim of receipt of cash of Rs. cross verify the builder and his claim of receipt of cash of Rs. 50,88,000/- from the assessee to purchase the flat. Hence, it from the assessee to purchase the flat. Hence, it from the assessee to purchase the flat. Hence, it is against the interes is against the interest of natural justice and the whole of the t of natural justice and the whole of the reassessment proceedings shall be quashed. reassessment proceedings shall be quashed.
5. On the facts and in the circumstances of the case and in 5. On the facts and in the circumstances of the case and in 5. On the facts and in the circumstances of the case and in law the Learned Commissioner of Income Tax (Appeals) NFAC law the Learned Commissioner of Income Tax (Appeals) NFAC law the Learned Commissioner of Income Tax (Appeals) NFAC has ignore the gross errors identified by the assesse has ignore the gross errors identified by the assesse has ignore the gross errors identified by the assessee in the Re-Assessment Assessment Assessment Order Order Order through through through his his his submission, submission, submission, thereby thereby thereby showcasing the confusion of the Assessing Officer. Hence, showcasing the confusion of the Assessing Officer. Hence, showcasing the confusion of the Assessing Officer. Hence, whole of the reassessment proceedings are not valid and whole of the reassessment proceedings are not valid and whole of the reassessment proceedings are not valid and needs to be quashed.
Briefly stated, facts of the case are that the assessee a Briefly stated, facts of the case are that the assessee a Briefly stated, facts of the case are that the assessee a salaried employee filed return of income for the year under consideration on employee filed return of income for the year under consideration on employee filed return of income for the year under consideration on 26.08.2015 declaring total income of Rs.22,99,270/-. The return of 26.08.2015 declaring total income of Rs.22,99,270/ 26.08.2015 declaring total income of Rs.22,99,270/ income was processed u/s 143(1) of the Income income was processed u/s 143(1) of the Income-tax Act, 1961 (in tax Act, 1961 (in short ‘the Act’).
2.1 Subsequently, informatio Subsequently, information was received by the Assessing n was received by the Assessing Officer from the office of the Director General of Income-tax Officer from the office of the Director General of Income Officer from the office of the Director General of Income (Investigation), Mumbai, that a search and survey action had been (Investigation), Mumbai, that a search and survey action had been (Investigation), Mumbai, that a search and survey action had been carried out on 21st November, 2014 in the case of the Runwal carried out on 21st November, 2014 in the case of the carried out on 21st November, 2014 in the case of the Group. The said investigation revea . The said investigation revealed that the group was engaged led that the group was engaged in the practice of receiving cash consideration, commonly described in the practice of receiving cash consideration, commonly described in the practice of receiving cash consideration, commonly described as “on-money”, over and above the stated value of sale , over and above the stated value of sale , over and above the stated value of sale consideration in respect of flats sold in its real estate project titled consideration in respect of flats sold in its real estate project titled consideration in respect of flats sold in its real estate project titled “Runwal Green”. Certain incri . Certain incriminating documents and materials minating documents and materials evidencing such cash receipts were also seized. In the course of the evidencing such cash receipts were also seized. In the course of the evidencing such cash receipts were also seized. In the course of the said proceedings, Shri Subodh Runwal, Director of the Runwal said proceedings, Shri Subodh Runwal, Director of the Runwal said proceedings, Shri Subodh Runwal, Director of the Runwal Group, in his statement recorded under section 132(4) of the Act, Group, in his statement recorded under section 132(4) of the Act, Group, in his statement recorded under section 132(4) of the Act, admitted that the seized da admitted that the seized data pertained to cash transactions not ta pertained to cash transactions not recorded in the regular books of account. recorded in the regular books of account.
2.2 The information so received further indicated that the assessee The information so received further indicated that the assessee The information so received further indicated that the assessee herein had purchased Flat No. T8 herein had purchased Flat No. T8-1604 in the said 1604 in the said Runwal Green project and was alleged to have made a cash payment of project and was alleged to have made a cash p project and was alleged to have made a cash p ₹50,88,000/– as part of the consideration. On the basis of this as part of the consideration. On the basis of this as part of the consideration. On the basis of this information, the Assessing Officer recorded reasons to believe that information, the Assessing Officer recorded reasons to believe that information, the Assessing Officer recorded reasons to believe that income chargeable to tax had escaped assessment, and accordingly income chargeable to tax had escaped assessment, and accordingly income chargeable to tax had escaped assessment, and accordingly issued notice under section 148 of the Act on 29t issued notice under section 148 of the Act on 29th March, 2017. h March, 2017.
2.3 In response thereto, the assessee filed a return of income on In response thereto, the assessee filed a return of income on In response thereto, the assessee filed a return of income on 28th April, 2017 declaring total income of 28th April, 2017 declaring total income of ₹24,45,530/ 24,45,530/–. During the reassessment proceedings, the assessee explained that the flat in reassessment proceedings, the assessee explained that the flat in reassessment proceedings, the assessee explained that the flat in question was jointly purchased by him and question was jointly purchased by him and his wife for a total his wife for a total consideration of ₹1,56,12,000/ 1,56,12,000/–, payable in stages corresponding to , payable in stages corresponding to construction progress. The total cost, inclusive of stamp duty, VAT, construction progress. The total cost, inclusive of stamp duty, VAT, construction progress. The total cost, inclusive of stamp duty, VAT, and service tax, was approximately and service tax, was approximately ₹1.82 crores. It was further 1.82 crores. It was further stated that all payments were mad stated that all payments were made either through account payee e either through account payee cheques or by way of bank loan, and that no cash component cheques or by way of bank loan, and that no cash component cheques or by way of bank loan, and that no cash component whatsoever had been paid. whatsoever had been paid.
2.4 The Assessing Officer, however, was not satisfied with the The Assessing Officer, however, was not satisfied with the The Assessing Officer, however, was not satisfied with the explanation, and in the absence of what he considered to be a explanation, and in the absence of what he considered to be a explanation, and in the absence of what he considered to be a “credible rebuttal”, proceeded to treat the alleged sum of “credible rebuttal”, proceeded to treat the alleged sum of “credible rebuttal”, proceeded to treat the alleged sum of ₹50,88,000/– as unexplained investment within the meaning of as unexplained investment within the meaning of as unexplained investment within the meaning of section 69 of the Act, thereby adding it to the total income of the he Act, thereby adding it to the total income of the he Act, thereby adding it to the total income of the assessee.
Upon appeal, the learned Commissioner of Income Upon appeal, the learned Commissioner of Income Upon appeal, the learned Commissioner of Income-tax (Appeals) sustained the addition. The reasoning of the learned (Appeals) sustained the addition. The reasoning of the learned (Appeals) sustained the addition. The reasoning of the learned CIT(A), in essence, was that although the assessee claimed to have CIT(A), in essence, was that although the assessee claimed to have CIT(A), in essence, was that although the assessee claimed to have obtained a housing loan of a housing loan of ₹1.35 crores from HDFC Bank, no 1.35 crores from HDFC Bank, no certified copy of such bank documentation had been produced. The certified copy of such bank documentation had been produced. The certified copy of such bank documentation had been produced. The CIT(A) further observed that the assessee’s declared income did not CIT(A) further observed that the assessee’s declared income did not CIT(A) further observed that the assessee’s declared income did not justify his capacity to service a loan with such high instalments, justify his capacity to service a loan with such high instalments, justify his capacity to service a loan with such high instalments, and therefore the alleged cash payment of herefore the alleged cash payment of ₹50,88,000/ 50,88,000/– stood unexplained. unexplained. unexplained. Concluding Concluding Concluding that that that the the the assessee assessee assessee had had had failed failed failed to to to substantiate the source of such investment, the learned CIT(A) substantiate the source of such investment, the learned CIT(A) substantiate the source of such investment, the learned CIT(A) upheld the action of the Assessing Officer. upheld the action of the Assessing Officer. The relevant finding of ld The relevant finding of ld CIT(A) is reproduced as reproduced as under:
4.3 I have gone through the assessment order and record available. 4.3 I have gone through the assessment order and record available. 4.3 I have gone through the assessment order and record available. In the instant case, I have carefully examined the assessment order In the instant case, I have carefully examined the assessment order In the instant case, I have carefully examined the assessment order and the record available in this case. During appeal, the assessee and the record available in this case. During appeal, the assessee and the record available in this case. During appeal, the assessee submitted that he had taken loa submitted that he had taken loan from HDFC bank of Rs. 135.67 lacs n from HDFC bank of Rs. 135.67 lacs however, the appellant has not submitted any bank certified copy of however, the appellant has not submitted any bank certified copy of however, the appellant has not submitted any bank certified copy of the same and the amount of Rs. 135455/ the same and the amount of Rs. 135455/- as monthly instalment of as monthly instalment of repayment of loan appears to be beyond financial capacity of the repayment of loan appears to be beyond financial capacity of the repayment of loan appears to be beyond financial capacity of the appellant as his retur appellant as his return of income for the assessment year 2015 n of income for the assessment year 2015-16 on 26.08.2015, declaring a total income of Rs. 24,45,530 only. 26.08.2015, declaring a total income of Rs. 24,45,530 only. 26.08.2015, declaring a total income of Rs. 24,45,530 only. Considering the significant discrepancy in the disclosed income and Considering the significant discrepancy in the disclosed income and Considering the significant discrepancy in the disclosed income and the unexplained cash payment. The assessee is unable to provide a the unexplained cash payment. The assessee is unable to provide a the unexplained cash payment. The assessee is unable to provide a valid explanati valid explanation or source for the cash payment, which led to further on or source for the cash payment, which led to further concerns regarding the financing of the transaction. As per AO, concerns regarding the financing of the transaction. As per AO, concerns regarding the financing of the transaction. As per AO, documents found during the search action confirmed that the actual documents found during the search action confirmed that the actual documents found during the search action confirmed that the actual value of the flat was higher than the declared agreement value, with value of the flat was higher than the declared agreement value, with value of the flat was higher than the declared agreement value, with a portion of the payment made in cash. a portion of the payment made in cash. Given that the assessee failed to substantiate the source of the cash Given that the assessee failed to substantiate the source of the cash Given that the assessee failed to substantiate the source of the cash payment, low disclosed income and very high house loans with high payment, low disclosed income and very high house loans with high payment, low disclosed income and very high house loans with high monthly instalments the Assessing Officer rightly added the monthly instalments the Assessing Officer rightly added the monthly instalments the Assessing Officer rightly added the unexplained investmen unexplained investment of Rs. 50,88,000 to the total income of the t of Rs. 50,88,000 to the total income of the assessee under section 69 of the Income Tax Act. The action taken by assessee under section 69 of the Income Tax Act. The action taken by assessee under section 69 of the Income Tax Act. The action taken by the Assessing Officer is justifiable, as the assessee's failure to the Assessing Officer is justifiable, as the assessee's failure to the Assessing Officer is justifiable, as the assessee's failure to provide adequate documentation or a credible explanation for the provide adequate documentation or a credible explanation for the provide adequate documentation or a credible explanation for the cash payment necessitated the addition under ent necessitated the addition under section section 69.
4. Aggrieved, the assessee is in appeal before the Tribunal by way Aggrieved, the assessee is in appeal before the Tribunal by way Aggrieved, the assessee is in appeal before the Tribunal by way of raising grounds as reproduced above. of raising grounds as reproduced above.
Before us, the Ld. counsel for the assessee has filed a Paper Before us, the Ld. counsel for the assessee has filed a Paper Before us, the Ld. counsel for the assessee has filed a Paper Book containing pages 1 to 147 Book containing pages 1 to 147 and drew our attention to a series and drew our attention to a series of orders passed by co of orders passed by co-ordinate Benches of this Tribunal in ordinate Benches of this Tribunal in analogous matters arising from the same analogous matters arising from the same Runwal Green Runwal Green project.
5.1. The learned counsel specifically relied upon the decision of the 5.1. The learned counsel specifically relied upon the decision of the 5.1. The learned counsel specifically relied upon the decision of the Tribunal in Shri ITO in Shrirang Shrirang Vij Vijay ay Rao Rao v. v. ITO 812/Mum/2022 dated 3rd August, 2022, and in Smt. Shreya 812/Mum/2022 dated 3rd August, 2022, and in 812/Mum/2022 dated 3rd August, 2022, and in Santosh Kadam v. ITO in dated 17th in ITA No. 227/Mum/2024 dated 17th Santosh Kadam v. ITO March, 2025. Both cases pertained to purchasers of flats in the very March, 2025. Both cases pertained to purchasers of flats in the very March, 2025. Both cases pertained to purchasers of flats in the very same project, wherein additions had been made on identical same project, wherein additions had been made on i same project, wherein additions had been made on i grounds—namely, the alleged admission of the Director of Runwal namely, the alleged admission of the Director of Runwal namely, the alleged admission of the Director of Runwal Group and the documents found during search. Group and the documents found during search.
5.2. Reliance was further placed upon the seminal order of this 5.2. Reliance was further placed upon the seminal order of this 5.2. Reliance was further placed upon the seminal order of this Tribunal in Runwal Homes Pvt. Ltd. v. DCIT Runwal Homes Pvt. Ltd. v. DCIT Runwal Homes Pvt. Ltd. v. DCIT in dated 5625/Mum/2017 dated 20th December, 2017, wherein the very 20th December, 2017, wherein the very basis of the alleged on basis of the alleged on-money addition in the case of the developer money addition in the case of the developer itself was examined threadbare and deleted. itself was examined threadbare and deleted.
We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant materials on record. the relevant materials on record. In the case, the dispute is e, the dispute is regarding the cash component of Rs.50,88,000/ regarding the cash component of Rs.50,88,000/- alleged to have paid by the assessee on the basis of the statement of the director of paid by the assessee on the basis of the statement of the director of paid by the assessee on the basis of the statement of the director of ‘Runwal Group’ of the companies ‘Runwal Group’ of the companies and documents found during and documents found during search of said group. Thus, the impugned addit search of said group. Thus, the impugned addition of ion of ₹50,88,000/– has its sole foundation in (i) the statement of the Director of the has its sole foundation in (i) the statement of the Director of the has its sole foundation in (i) the statement of the Director of the Runwal Group recorded under section 132(4), and (ii) documents Runwal Group recorded under section 132(4), and (ii) documents Runwal Group recorded under section 132(4), and (ii) documents seized from the premises of that group. It is not the Revenue’s case seized from the premises of that group. It is not the Revenue’s case seized from the premises of that group. It is not the Revenue’s case that any material or evidence was fo that any material or evidence was found during proceedings in the und during proceedings in the assessee’s possession or control to substantiate such cash assessee’s possession or control to substantiate such cash assessee’s possession or control to substantiate such cash payment. The co-ordinate Bench of this Tribunal, in ordinate Bench of this Tribunal, in ordinate Bench of this Tribunal, in Runwal Homes Pvt. Ltd. (supra), after an exhaustive analysis of the seized materials (supra), after an exhaustive analysis of the seized materials (supra), after an exhaustive analysis of the seized materials and the statement of Shri Subo and the statement of Shri Subodh Runwal, held that the Assessing dh Runwal, held that the Assessing Officer had grossly erred in extending the surrendered figure of on- Officer had grossly erred in extending the surrendered figure of on Officer had grossly erred in extending the surrendered figure of on money, pertaining to a few identified flats, to all units sold in the money, pertaining to a few identified flats, to all units sold in the money, pertaining to a few identified flats, to all units sold in the project merely on estimation. It was observed that the admission project merely on estimation. It was observed that the admission project merely on estimation. It was observed that the admission made by the Director was confined to certain specific transactions or was confined to certain specific transactions or was confined to certain specific transactions post-January 2014 and that no evidence of universal cash receipts January 2014 and that no evidence of universal cash receipts January 2014 and that no evidence of universal cash receipts existed. The Tribunal, therefore, deleted the additions made on existed. The Tribunal, therefore, deleted the additions made on existed. The Tribunal, therefore, deleted the additions made on mere presumptions and estimation. mere presumptions and estimation.
6.1. Following the aforesaid decision, the Bench in Shri Shrirang 6.1. Following the aforesaid decision, the Bench in 6.1. Following the aforesaid decision, the Bench in Vijay Rao (supra) and (supra) and Smt. Shreya Santosh Kadam Smt. Shreya Santosh Kadam (supra)—both purchasers of flats in the same Tower No. 8 purchasers of flats in the same Tower No. 8— —deleted similar additions of alleged cash components, holding that when the additions of alleged cash components, holding that when the additions of alleged cash components, holding that when the substantive addition in the hands of the developer itself had been ve addition in the hands of the developer itself had been ve addition in the hands of the developer itself had been deleted, no consequential or derivative addition could survive in the deleted, no consequential or derivative addition could survive in the deleted, no consequential or derivative addition could survive in the hands of the purchasers. hands of the purchasers. The relevant finding of the Tribunal in the The relevant finding of the Tribunal in the case of Shrirang Vijay Rao (supra) is reproduced as under: case of Shrirang Vijay Rao (supra) is reproduced as under: case of Shrirang Vijay Rao (supra) is reproduced as under:
“8. Heard both the parties and perused the material available on 8. Heard both the parties and perused the material available on 8. Heard both the parties and perused the material available on record. Without reiterating the fats as referred above, we had gone record. Without reiterating the fats as referred above, we had gone record. Without reiterating the fats as referred above, we had gone through the decision of ITAT as referred (supra) in the case of through the decision of ITAT as referred (supra) in the case of through the decision of ITAT as referred (supra) in the case of Runwal Homes Pvt. Ltd. wherein addition pertaining to the c Runwal Homes Pvt. Ltd. wherein addition pertaining to the c Runwal Homes Pvt. Ltd. wherein addition pertaining to the category of unit purchased by the assessee was deleted. The relevant of unit purchased by the assessee was deleted. The relevant of unit purchased by the assessee was deleted. The relevant operating para of the said decision of ITAT is reproduced as under: operating para of the said decision of ITAT is reproduced as under: operating para of the said decision of ITAT is reproduced as under: “8. Now coming to the other addition included in the sum of Rs.
Now coming to the other addition included in the sum of Rs.
8. Now coming to the other addition included in the sum of Rs. 63,39,52,372/ 63,39,52,372/-. The following additions were made by th . The following additions were made by the Assessing Officer Assessing Officer - 1 Project namely Runwal Greens Towers 1 Project namely Runwal Greens Towers -1,2 & 3 and Commercial Rs. 31, 14,02,412/ 3 and Commercial Rs. 31, 14,02,412/- 2 Project namely Runwal 2 Project namely Runwal Greens Towers 4, 5, 6, 7 & 8 Rs. 31,52,99,960/ Greens Towers 4, 5, 6, 7 & 8 Rs. 31,52,99,960/ Greens Towers 4, 5, 6, 7 & 8 Rs. 31,52,99,960/- Total Rs. 63,39,52,372/ 63,39,52,372/- It is not disputed that the on-money on the basis of money on the basis of the seized material received by the assessee comes to Rs. e seized material received by the assessee comes to Rs. e seized material received by the assessee comes to Rs. 19,94,78,821/ 19,94,78,821/-out of which the addition of Rs.72,50,000/ out of which the addition of Rs.72,50,000/- has already been confirmed by us and has been duly taken in to already been confirmed by us and has been duly taken in to already been confirmed by us and has been duly taken in to account by the assessee in the revised computation of income account by the assessee in the revised computation of income account by the assessee in the revised computation of income submitted by the a submitted by the assessee during the course of hearing before the ssessee during the course of hearing before the Assessing Officer and on which the assessee has duly paid the tax. Assessing Officer and on which the assessee has duly paid the tax. Assessing Officer and on which the assessee has duly paid the tax. Now the question before us remains to the disputed addition Now the question before us remains to the disputed addition Now the question before us remains to the disputed addition amounting to Rs.62,67,02,372/ amounting to Rs.62,67,02,372/- The total on money on the basis of The total on money on the basis of the seized mate the seized material found during the course of search relate to the rial found during the course of search relate to the period of the booking done from March 2014 to November 2014. The period of the booking done from March 2014 to November 2014. The period of the booking done from March 2014 to November 2014. The amount so worked out comes to` 19,94,78,821/ amount so worked out comes to` 19,94,78,821/- as detailed under: as detailed under:- On-money of flats as per seized material money of flats as per seized material - Rs. 13,44,68,725/ Rs. 13,44,68,725/- On-money of shops as per seized material of shops as per seized material - Rs.6,50,10,096/ Rs.6,50,10,096/- Out of the said sum 72,50,000/ Out of the said sum 72,50,000/- has already been confirmed by us has already been confirmed by us in the preceding paragraph, therefore, on in the preceding paragraph, therefore, on-money on flats as per money on flats as per seized material remains at `19,22,28,821/ seized material remains at `19,22,28,821/-. We noted that the . We noted that the Assessing Offi Assessing Officer on the basis of seized material found during the cer on the basis of seized material found during the course of search relating to the period of March 2014 to November course of search relating to the period of March 2014 to November course of search relating to the period of March 2014 to November 2014 took the view that the assessee might have received on 2014 took the view that the assessee might have received on 2014 took the view that the assessee might have received on- money in all the bookings and therefore, he estimated cash portion money in all the bookings and therefore, he estimated cash portion money in all the bookings and therefore, he estimated cash portion on other units sold by taking the highest rate of sale of other units units sold by taking the highest rate of sale of other units units sold by taking the highest rate of sale of other units although no on although no on-money evidence were found during the course of money evidence were found during the course of search. The Assessing Officer while confirming the addition relied search. The Assessing Officer while confirming the addition relied search. The Assessing Officer while confirming the addition relied on the statements of the staff of the assessee as well as the on the statements of the staff of the assessee as well as the on the statements of the staff of the assessee as well as the statement of the Director Shri Subodh Runwal, mainly in reply to ement of the Director Shri Subodh Runwal, mainly in reply to ement of the Director Shri Subodh Runwal, mainly in reply to question nos. 16, 17 and 18, which are reproduced as under: question nos. 16, 17 and 18, which are reproduced as under: question nos. 16, 17 and 18, which are reproduced as under: "Ans to Q.16 "Sir as I have answered in earlier question I again "Ans to Q.16 "Sir as I have answered in earlier question I again "Ans to Q.16 "Sir as I have answered in earlier question I again reiterate that this project was a joint venture with HDFC Limited reiterate that this project was a joint venture with HDFC Limited reiterate that this project was a joint venture with HDFC Limited right from the inception till they exited. Subsequently to that the t from the inception till they exited. Subsequently to that the t from the inception till they exited. Subsequently to that the market has become very competitive and due to opening of a forest market has become very competitive and due to opening of a forest market has become very competitive and due to opening of a forest land we had to sell aggressively to achieve the numbers from the land we had to sell aggressively to achieve the numbers from the land we had to sell aggressively to achieve the numbers from the calendar year 2014, I accommodated a few customers who wanted calendar year 2014, I accommodated a few customers who wanted calendar year 2014, I accommodated a few customers who wanted to pay part consideration in cash. The difference in the above chart to pay part consideration in cash. The difference in the above chart to pay part consideration in cash. The difference in the above chart is specifically related to these customers who have been is specifically related to these customers who have been is specifically related to these customers who have been accommodated. I offer this difference as my income. I hereby farther accommodated. I offer this difference as my income. I hereby farther accommodated. I offer this difference as my income. I hereby farther reiterate and state that prior to this we have never accepte reiterate and state that prior to this we have never accepte reiterate and state that prior to this we have never accepted in cash for any of the units sold in that project." for any of the units sold in that project." Thus the assessee has acknowledged the discrepancy and has Thus the assessee has acknowledged the discrepancy and has Thus the assessee has acknowledged the discrepancy and has accepted that "on accepted that "on-money" has been taken in all the above instances. money" has been taken in all the above instances. Further the assessee was asked to state the other instances where Further the assessee was asked to state the other instances where Further the assessee was asked to state the other instances where unaccounted cash has boon taken in lieu of sale of residential / ed cash has boon taken in lieu of sale of residential / ed cash has boon taken in lieu of sale of residential / commercial units in their projects. Following Is the except of the commercial units in their projects. Following Is the except of the commercial units in their projects. Following Is the except of the relevant portion of his statement relevant portion of his statement "Q.17 Please provide the details as to other fiats in which similar "Q.17 Please provide the details as to other fiats in which similar "Q.17 Please provide the details as to other fiats in which similar practice is followed. practice is followed.
Ans: Although in the other cases, I do not agree that in all the cases ough in the other cases, I do not agree that in all the cases ough in the other cases, I do not agree that in all the cases cash has been accepted by me over and above the agreement value. cash has been accepted by me over and above the agreement value. cash has been accepted by me over and above the agreement value. But to avoid protracted litigations with the department and to buy But to avoid protracted litigations with the department and to buy But to avoid protracted litigations with the department and to buy peace I accept the difference appearing in the chart beginning peace I accept the difference appearing in the chart beginning peace I accept the difference appearing in the chart beginning from 1st January 2014 till date as my additional income over and above 1st January 2014 till date as my additional income over and above 1st January 2014 till date as my additional income over and above the regular income for the respective years as on the regular income for the respective years as on- money (Cash received over and above the agreement value), I am submitting the received over and above the agreement value), I am submitting the received over and above the agreement value), I am submitting the working marked as Annexure~1 to this statement which ha working marked as Annexure~1 to this statement which ha working marked as Annexure~1 to this statement which has two pages. Q.18 As per the working submitted as part of annexure to answer to Q.18 As per the working submitted as part of annexure to answer to Q.18 As per the working submitted as part of annexure to answer to question number 16, the amount of on money accepted in the project question number 16, the amount of on money accepted in the project question number 16, the amount of on money accepted in the project namely Runwal Greens (M/s Runwal Homes Private Limited), is namely Runwal Greens (M/s Runwal Homes Private Limited), is namely Runwal Greens (M/s Runwal Homes Private Limited), is Rs.63,39,52,372/ Rs.63,39,52,372/- Please confirm ? Ans; Sir, due to reasons mention above I confirm the amount of Rs. to reasons mention above I confirm the amount of Rs. 63,39,52.372A (which as per Annexure 63,39,52.372A (which as per Annexure-1), as the on money 1), as the on money accepted in the projects Runwal Green (M/s. Runwal Homes Private accepted in the projects Runwal Green (M/s. Runwal Homes Private accepted in the projects Runwal Green (M/s. Runwal Homes Private Limited), and the same has been offered as additional income over Limited), and the same has been offered as additional income over Limited), and the same has been offered as additional income over and above the and above the income declared in the M/s. Runwal Homes Private income declared in the M/s. Runwal Homes Private Limited. Here / want to state that Olive project is under the Limited. Here / want to state that Olive project is under the Limited. Here / want to state that Olive project is under the proprietorship of Mr. Subhash Runwal." proprietorship of Mr. Subhash Runwal." We have gone through the answer to question nos. 16, 17 and 18. We have gone through the answer to question nos. 16, 17 and 18. We have gone through the answer to question nos. 16, 17 and 18. We noted that in reply to question no.16, We noted that in reply to question no.16, Director of the assessee Director of the assessee company stated that initially the project was joint venture with company stated that initially the project was joint venture with company stated that initially the project was joint venture with HDFC Limited. Subsequently, when the market has become more HDFC Limited. Subsequently, when the market has become more HDFC Limited. Subsequently, when the market has become more competitive and due to the opening of the forest land they had to competitive and due to the opening of the forest land they had to competitive and due to the opening of the forest land they had to sell aggressively, in order to achieve t sell aggressively, in order to achieve the numbers from the calendar he numbers from the calendar year 2014 and, therefore, in order to accommodate few customers year 2014 and, therefore, in order to accommodate few customers year 2014 and, therefore, in order to accommodate few customers who wanted to pay part consideration in cash, they accepted cash who wanted to pay part consideration in cash, they accepted cash who wanted to pay part consideration in cash, they accepted cash for few units. He has categorically stated that prior to that date they for few units. He has categorically stated that prior to that date they for few units. He has categorically stated that prior to that date they have never accepted any ca have never accepted any cash. In reply to question no.17, he has sh. In reply to question no.17, he has categorically stated that he did not agree that in all cases cash bas categorically stated that he did not agree that in all cases cash bas categorically stated that he did not agree that in all cases cash bas been accepted over and above the agreement value but he agreed to been accepted over and above the agreement value but he agreed to been accepted over and above the agreement value but he agreed to surrender the difference as its additional income over and above the surrender the difference as its additional income over and above the surrender the difference as its additional income over and above the regular income for the respective years as on me for the respective years as on-money to avoid money to avoid protracted litigations with the department and buy peace. On that protracted litigations with the department and buy peace. On that protracted litigations with the department and buy peace. On that basis basis the the total total on on-money money received received was was worked worked out out at at Rs.63,39,52,372/ Rs.63,39,52,372/- and added to the income of the assessee. It is and added to the income of the assessee. It is undisputed fact that on undisputed fact that on the basis of the documents and evidence the basis of the documents and evidence produced before us, the copy of which are available at pages 436 to produced before us, the copy of which are available at pages 436 to produced before us, the copy of which are available at pages 436 to 441 of the paper 441 of the paper-book, the on money received, on the basis of the book, the on money received, on the basis of the seized documents, by the assessee in respect of flats comes to seized documents, by the assessee in respect of flats comes to seized documents, by the assessee in respect of flats comes to 13,44,68,725/ 13,44,68,725/-and in respect of shops comes to ` 6,50,10,096/ n respect of shops comes to ` 6,50,10,096/-. For the rest of the addition in respect of which no incriminating For the rest of the addition in respect of which no incriminating For the rest of the addition in respect of which no incriminating material was found, we noted from pages 439 to 441 of the paper material was found, we noted from pages 439 to 441 of the paper material was found, we noted from pages 439 to 441 of the paper book, the Assessing Officer just estimated the on book, the Assessing Officer just estimated the on-money of the flat money of the flat @15,750/- per per sq. ft totaling to Rs.33,47,33,101/- and that of the and that of the shops @26,000/ shops @26,000/- totaling to Rs. 9,97,40,450/-, But the Assessing , But the Assessing Officer was fair enough to state that no incriminating material was Officer was fair enough to state that no incriminating material was Officer was fair enough to state that no incriminating material was found but had estimate @15750/ found but had estimate @15750/- per sq. ft for flats and @26000/ per sq. ft for flats and @26000/- per sq. ft. for shops. This is a case where assessment has been sq. ft. for shops. This is a case where assessment has been sq. ft. for shops. This is a case where assessment has been completed u/s. 143(3), therefore, the addition has been made by the completed u/s. 143(3), therefore, the addition has been made by the completed u/s. 143(3), therefore, the addition has been made by the Assessing Officer as if the assessee has received whatever is stated Assessing Officer as if the assessee has received whatever is stated Assessing Officer as if the assessee has received whatever is stated in the documents executed by the assessee. In our opinion, in the documents executed by the assessee. In our opinion, in the documents executed by the assessee. In our opinion, the onus is on the Revenue to prove that the assessee has actually received is on the Revenue to prove that the assessee has actually received is on the Revenue to prove that the assessee has actually received the consideration much more than what has been agreed to or the consideration much more than what has been agreed to or the consideration much more than what has been agreed to or stated in the documents executed between the intended buyer and stated in the documents executed between the intended buyer and stated in the documents executed between the intended buyer and the assessee. No cogent material or evidence was brough the assessee. No cogent material or evidence was brough the assessee. No cogent material or evidence was brought to our knowledge by the learned DR even though he has vehemently relied knowledge by the learned DR even though he has vehemently relied knowledge by the learned DR even though he has vehemently relied on the order of the Assessing Officer as well as the statement of the on the order of the Assessing Officer as well as the statement of the on the order of the Assessing Officer as well as the statement of the Director of the company, which may prove that the assessee has Director of the company, which may prove that the assessee has Director of the company, which may prove that the assessee has received consideration @15750/ received consideration @15750/- per sq. ft for flats and @26000/ ats and @26000/- per sq. ft. for shops. There has been search and seizure in the case per sq. ft. for shops. There has been search and seizure in the case per sq. ft. for shops. There has been search and seizure in the case of the assessee. If the assessee would have received consideration of the assessee. If the assessee would have received consideration of the assessee. If the assessee would have received consideration much more than what is stated in the documents, for which no much more than what is stated in the documents, for which no much more than what is stated in the documents, for which no evidence is found during the course of sea evidence is found during the course of search, in our opinion, no rch, in our opinion, no addition can be sustained. There cannot be any agreement against addition can be sustained. There cannot be any agreement against addition can be sustained. There cannot be any agreement against the statute. The assessee agreed for declaration of the income for the statute. The assessee agreed for declaration of the income for the statute. The assessee agreed for declaration of the income for which no material was found merely to avoid protracted litigations which no material was found merely to avoid protracted litigations which no material was found merely to avoid protracted litigations with the department and buy peace with the department and buy peace. The assessee has earned . The assessee has earned income; the onus is on the Revenue to prove that the income has income; the onus is on the Revenue to prove that the income has income; the onus is on the Revenue to prove that the income has accrued to the assessee. Even otherwise also since there has been accrued to the assessee. Even otherwise also since there has been accrued to the assessee. Even otherwise also since there has been a search in the case of the assessee, if the assessee would have a search in the case of the assessee, if the assessee would have a search in the case of the assessee, if the assessee would have earned such income there must have earned such income there must have been some evidence found been some evidence found that either the assessee has made investment outside the books of that either the assessee has made investment outside the books of that either the assessee has made investment outside the books of account or has spend this income in one way or the other. Income account or has spend this income in one way or the other. Income account or has spend this income in one way or the other. Income tax is leviable u/s. 4 of the I.T Act on the real income. If income has tax is leviable u/s. 4 of the I.T Act on the real income. If income has tax is leviable u/s. 4 of the I.T Act on the real income. If income has not accrued or received by t not accrued or received by the assessee, the assessee cannot be he assessee, the assessee cannot be burdened for income tax liability. From the documents available on burdened for income tax liability. From the documents available on burdened for income tax liability. From the documents available on record, it is apparent that the Assessing Officer has estimated the record, it is apparent that the Assessing Officer has estimated the record, it is apparent that the Assessing Officer has estimated the booking amount and on that basis assumed that the assessee booking amount and on that basis assumed that the assessee booking amount and on that basis assumed that the assessee would have received the on would have received the on-money. He made the presumption as if money. He made the presumption as if the assessee has sold all the flats @15750/ the assessee has sold all the flats @15750/- per sq. ft and the per sq. ft and the shops @26000/ shops @26000/- per sq. ft. From the documents in the booking, it is per sq. ft. From the documents in the booking, it is evident that different flats and different shops have been booked at evident that different flats and different shops have been booked at evident that different flats and different shops have been booked at different rates b different rates by the assessee. From page 443 of the paper y the assessee. From page 443 of the paper-book, as found during the course of search, the assessee has given as found during the course of search, the assessee has given as found during the course of search, the assessee has given discount on the bookings at different rates to different customers. discount on the bookings at different rates to different customers. discount on the bookings at different rates to different customers. We noted that in respect of two shops although the base rate has We noted that in respect of two shops although the base rate has We noted that in respect of two shops although the base rate has been mentione been mentioned @21,000 per sq. ft, the assessee has given discount d @21,000 per sq. ft, the assessee has given discount around Rs. 4150 per sq. ft. and booked the shops @17500 per sq. ft around Rs. 4150 per sq. ft. and booked the shops @17500 per sq. ft around Rs. 4150 per sq. ft. and booked the shops @17500 per sq. ft including the club charges of Rs.750/ including the club charges of Rs.750/-. Similarly, in respect of flat . Similarly, in respect of flat also we noted that the base rate has been mentioned @12,000/ also we noted that the base rate has been mentioned @12,000/ also we noted that the base rate has been mentioned @12,000/- per sq. ft and after adding floor rise, club charges, infra charges etc., sq. ft and after adding floor rise, club charges, infra charges etc., sq. ft and after adding floor rise, club charges, infra charges etc., total rate came to Rs.14375 per sq. ft. and the assessee has also total rate came to Rs.14375 per sq. ft. and the assessee has also total rate came to Rs.14375 per sq. ft. and the assessee has also given discount of Rs. 1000/ given discount of Rs. 1000/- and ultimately booked the flat and ultimately booked the flat @13,350 per sq. ft. Even on the same very page had the deta @13,350 per sq. ft. Even on the same very page had the deta @13,350 per sq. ft. Even on the same very page had the details of the flats which had been booked @ 14550/ the flats which had been booked @ 14550/-, 14300/ , 14300/- and Rs. 13225/- per sq. ft. Therefore, the conclusion drawn by the per sq. ft. Therefore, the conclusion drawn by the per sq. ft. Therefore, the conclusion drawn by the Assessing Officer while making the addition is based just on Assessing Officer while making the addition is based just on Assessing Officer while making the addition is based just on assumption as if the assessee the assessee has sold all the flats assumption as if the assessee the assessee has sold all the flats assumption as if the assessee the assessee has sold all the flats @15750 per sq. ft. 50 per sq. ft. In view of this fact, we delete the addition of Rs. 33,47,33,101/ In view of this fact, we delete the addition of Rs. 33,47,33,101/ In view of this fact, we delete the addition of Rs. 33,47,33,101/- made on the basis of estimating the sale consideration in respect of made on the basis of estimating the sale consideration in respect of made on the basis of estimating the sale consideration in respect of the flats @15750/ the flats @15750/- per sq. ft. and Rs. 9,97,40,450/- based on the presumption as having being booked shop presumption as having being booked shops @26000/-." ." As per the decision of the ITAT (supra), it is clear that the ITAT has As per the decision of the ITAT (supra), it is clear that the ITAT has As per the decision of the ITAT (supra), it is clear that the ITAT has deleted the part of the addition which was based on estimation of deleted the part of the addition which was based on estimation of deleted the part of the addition which was based on estimation of 'on money' on flats where no incriminating documents were found 'on money' on flats where no incriminating documents were found 'on money' on flats where no incriminating documents were found as elaborated in the finding of ITAT. It i as elaborated in the finding of ITAT. It is categorically established s categorically established form the facts reported (supra) that addition in respect of Tower form the facts reported (supra) that addition in respect of Tower form the facts reported (supra) that addition in respect of Tower No.8 in the project viz. "Runwal Green" were made on estimation No.8 in the project viz. "Runwal Green" were made on estimation No.8 in the project viz. "Runwal Green" were made on estimation basis, therefore the decision of the Id. CIT(A) in sustaining the basis, therefore the decision of the Id. CIT(A) in sustaining the basis, therefore the decision of the Id. CIT(A) in sustaining the addition of Rs.31,28,000 in the addition of Rs.31,28,000 in the case of the assessee for purchasing case of the assessee for purchasing residential unit No.T8 residential unit No.T8-1604 in Tower 8 is not justified therefore 1604 in Tower 8 is not justified therefore following the decision of ITAT, Mumbai in the case of Runwal following the decision of ITAT, Mumbai in the case of Runwal following the decision of ITAT, Mumbai in the case of Runwal Homes Pvt. Ltd. (supra), we direct the Assessing Officer to delete the Homes Pvt. Ltd. (supra), we direct the Assessing Officer to delete the Homes Pvt. Ltd. (supra), we direct the Assessing Officer to delete the impugned addition. Acc impugned addition. Accordingly, the Ground Nos. 2 to 4 of the ordingly, the Ground Nos. 2 to 4 of the assessee are are allowed.” 6.1 In the case of Shreya Santosh Kadam (supra) also the Tribunal In the case of Shreya Santosh Kadam (supra) also the Tribunal In the case of Shreya Santosh Kadam (supra) also the Tribunal followed the decision in the case of Shrirang Vijay Rao (supra). The followed the decision in the case of Shrirang Vijay Rao (supra). followed the decision in the case of Shrirang Vijay Rao (supra). present case stands on identical footing. The flat purchased by the present case stands on identical footing. The flat purchased by the present case stands on identical footing. The flat purchased by the assessee is located in Tower No. 8 of the same project. No material assessee is located in Tower No. 8 of the same project. No material assessee is located in Tower No. 8 of the same project. No material evidencing payment of cash by the assessee has been found or evidencing payment of cash by the assessee has been found or evidencing payment of cash by the assessee has been found or brought on record. In view of the above precedents, onl In view of the above precedents, only basis for In view of the above precedents, onl making addition in the case of the assessee of Rs.50,88,000/- was making addition in the case of the assessee of Rs.50,88,000/ making addition in the case of the assessee of Rs.50,88,000/ the documents found at the premises of the Runwal Green and the the documents found at the premises of the Runwal Green and the the documents found at the premises of the Runwal Green and the statement of the Director of the said company. Since addition in the statement of the Director of the said company. Since addition in the statement of the Director of the said company. Since addition in the said company itself for on said company itself for on-money payment rece money payment received has been deleted by the Co-ordinate Bench of the Tribunal. ordinate Bench of the Tribunal. The entire ordinate Bench of the Tribunal. foundation of the Revenue’s case being demolished by the foundation of the Revenue’s case being demolished by the foundation of the Revenue’s case being demolished by the Tribunal’s earlier decisions, the impugned addition of ₹50,88,000/– Tribunal’s earlier decisions, the impugned addition of Tribunal’s earlier decisions, the impugned addition of cannot, in law or on fact, be sustained. cannot, in law or on fact, be sustained.
6.2 We also deem it appropriate to observe that the remarks of the deem it appropriate to observe that the remarks of the deem it appropriate to observe that the remarks of the learned CIT(A) regarding the assessee’s financial capacity to service learned CIT(A) regarding the assessee’s financial capacity to service learned CIT(A) regarding the assessee’s financial capacity to service a bank loan are wholly extraneous to the issue before us. The a bank loan are wholly extraneous to the issue before us. The a bank loan are wholly extraneous to the issue before us. The matter under appeal pertains to an alleged cash investment; the matter under appeal pertains to an alleged cash investment; the matter under appeal pertains to an alleged cash investment; the assessee’s creditworthiness to avail of a sanctioned housing loan, see’s creditworthiness to avail of a sanctioned housing loan, see’s creditworthiness to avail of a sanctioned housing loan, duly disbursed through banking channels, bears no relevance to duly disbursed through banking channels, bears no relevance to duly disbursed through banking channels, bears no relevance to the existence or otherwise of such unrecorded payment. Such the existence or otherwise of such unrecorded payment. Such the existence or otherwise of such unrecorded payment. Such observations, therefore, are directed to be expunged from the observations, therefore, are directed to be expunged from the observations, therefore, are directed to be expunged from the appellate record.
6.3 In view of the foregoing discussion and respectfully following In view of the foregoing discussion and respectfully following In view of the foregoing discussion and respectfully following the binding precedent of the co the binding precedent of the co-ordinate Benches of this Tribunal in ordinate Benches of this Tribunal in the cases cited (supra), we hold that the addition of ₹50,88,000/– the cases cited (supra), we hold that the addition of the cases cited (supra), we hold that the addition of made under section 69 of the Act is unsustai made under section 69 of the Act is unsustainable in law. The same nable in law. The same is accordingly directed to be deleted. is accordingly directed to be deleted. The grounds of appeal of the The grounds of appeal of the assessee are allowed. assessee are allowed.
In the result, the appeal of the assessee is allowed. 7. In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed.
Order pronounced in the open Court on ounced in the open Court on 27/10/2025. /10/2025.