KANCHAN WALI,MUMBAI vs. INCOME TAX OFFICER WARD 34(1)(1), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 2145/MUM/2026 Assessment Year: 2019-20 Kanchan Wali vs Income Tax Officer 401/407, King Apartment Ward 34(1)(1), Juhu Tara Road, Juhu, Mumbai Mumbai - 400049 (PAN: AAAPW2518D) Appellant Respondent Present for: Assessee : Shri Rahul Hakani, Advocate Revenue : Smt. Sujatha Iyyanger, Sr. DR Date of Hearing : 16.06.2026 Date of Pronouncement : 31.08.2026 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by assessee is against the order of the Ld. CIT (A), National Faceless Appeal Centre (NFAC), Delhi, Order No. ITBA/NFAC/S/250/2025-26/1084531647(1) dated 07.01.2026 passed against the assessment order by Assessment Unit, Income Tax Department, u/s. 147 r.w.s. 144B of the Income-tax Act, 1961 (‘the Act’) dated 21.03.2025 for Assessment Year 2019-20.

ITA No. 2145/Mum/2026 Kanchan Wali AY 2019-20 1. The Learned NFAC failed to appreciate that reopening u/s. 148 is bad in law as same is done for verification and no notice us/. 148A(b) is issued and thus notice u/s. 148 is bad in law. 2. The Learned NFAC failed to appreciate that reopening u/s. 148 is bad in law as notice 148 is not issued by the faceless assessing officer and thus there is contravention of section 151A. 3. The Learned NFAC failed to appreciate that reopening u/s. 148 is bad in law as reopening is beyond three years and the sanction u/s. 151 is wrongly obtained of Pr. CIT instead of Pr. CCIT. 4. The Learned NFAC erred in confirming the order of Assessing Officer making addition of Rs. 49,40,500/- u/s. 69 being purported amount paid by Assessee for purchase of immovable property being office at New Delhi without appreciating that the property was jointly purchased by Assessee and her husband in the year 2014 and Assessee had paid Rs. 20,00,000/- only from her joint account with her husband and Assessee has not made any payment of Rs. 49,40,500/- as alleged and the entire addition is based on presumptions, surmises, and conjectures without making any independent enquiry and hence the addition of Rs. 49,40,500/- u/s 69 may be deleted. 5. Without prejudice to above, the learned NFAC failed to appreciate that as Assessee is a joint owner of the impugned property, entire addition cannot be made in the hands of assessee.

ITA No. 2145/Mum/2026 Kanchan Wali AY 2019-20 Agreement to Sell dated 20.12.2014, executed jointly between assessee and her late husband, Shri Subhash Gopinath Wali, as purchasers and Dr. Rajiv Dua and Mrs. Sita Dua, jointly as vendors, for a total agreed consideration of Rs.20,00,000/-. It was submitted that the entire consideration was paid through account payee cheques drawn on the joint bank account of assessee and her husband maintained with Punjab & Sind Bank, during FY 2014-15 itself and possession of the property was also handed over to the purchasers in the same year.

3.1. Since the Agreement to Sell could not be registered at the relevant point of time, the said transaction was subsequently formalized by way of a registered Sale Deed dated 13.06.2018, in which, in order to align with the prevailing circle rate/stamp duty valuation as on the date of registration, the consideration was recorded at Rs.66,10,000/-. It was submitted that no amount over and above the agreed consideration of Rs.20,00,000/- was, in fact, paid by assessee or her husband to the vendors and that the only outgo during FY 2018-19 was towards stamp duty and registration charges of Rs.3,30,500/-, which stood duly paid through banking channels and reflected in the bank statement filed before the ld. Assessing Officer.

ITA No. 2145/Mum/2026 Kanchan Wali AY 2019-20 Rs.49,40,500/- as unexplained investment and brought the same to tax under section 69 of the Act. Aggrieved, assessee went in appeal before the ld. CIT(A) who, upheld the action of ld. Assessing Officer. Aggrieved further, assessee is in appeal before the Tribunal.

5.1. It was submitted that the said evidence, though not filed before the lower authorities, goes to the root of the controversy and is necessary for a proper and complete adjudication of the appeal. 4

ITA No. 2145/Mum/2026 Kanchan Wali AY 2019-20

ITA No. 2145/Mum/2026 Kanchan Wali AY 2019-20 Rs.66,10,000/- came to be mentioned in the registered document solely to align it with the prevailing stamp duty/circle rate and not because any consideration over and above Rs.20,00,000/- was paid or payable. It was further submitted that the only payment made by assessee during FY 2018-19 was towards stamp duty and registration charges of Rs.3,30,500/- which too stood explained and duly reflected in the bank statement.

7.1. It was submitted that section 69 of the Act applies only where an assessee has, in the financial year immediately preceding the relevant assessment year, made an investment which is not recorded in the books of account and offers no explanation, or an unsatisfactory explanation, as to the nature and source thereof. It was contended that since the entire investment of Rs.20,00,000/- was admittedly made in FY 2014-15, and not in FY 2018-19 relevant to AY 2019-20, the very premise for invoking section 69 in the year under consideration is absent. It was further submitted that even the stamp duty payment of Rs.3,30,500/- made during FY 2018-19 stood duly explained and reflected in assessee’s bank statement and there was, therefore, no scope for treating any part of it as unexplained. It was submitted that neither ld. Assessing Officer nor ld. CIT(A) has brought on record any material such as whether by way of statement, seized document, bank entry or otherwise, to demonstrate that any consideration over and above Rs.20,00,000/- was, in fact, paid by assessee.

7.2. Reliance was placed on the judicial precedents in the case of CIT vs. Bharat R. Ruia [2011] 337 ITR 452 (Bom) and CIT vs. M. Selvaganapathy [2018] 91 taxmann.com 69 (Mad) for the proposition 6

ITA No. 2145/Mum/2026 Kanchan Wali AY 2019-20 that stamp duty valuation, by itself cannot be treated as evidence of actual consideration passing between the parties so as to sustain an addition under section 69 of the Act.

7.3. It was further submitted, without prejudice, that even if it were assumed for the sake of argument that the stamp duty value represented the fair market value of the property as on the date of registration, the appropriate statutory mechanism for bringing to tax any such difference between stated consideration and stamp duty value, in the hands of a purchaser of immovable property, is the deeming fiction contained in section 56(2)(x) of the Act, read with section 50C thereof for the limited purpose of adopting the value and not section 69, which operates in an entirely different field, namely, that of unexplained investment outside the books. It was submitted that ld. Assessing Officer has neither invoked section 56(2)(x) at any stage, nor examined its applicability and it is not open to the Revenue, at the appellate stage, to seek to sustain an addition made under one charging provision by recourse to an altogether different deeming provision which was never invoked in the assessment order.

7.4. It was further submitted that, in any event, having regard to the first proviso to section 56(2)(x)(b)(B) of the Act (analogous to the first and second provisos to section 50C(1)), since the entire consideration of Rs.20,00,000/- was received by way of account payee cheques prior to the date of the Agreement to Sell dated 20.12.2014, the stamp duty value as on the date of the agreement and not as on the date of registration, would in any case be relevant and no material has been

ITA No. 2145/Mum/2026 Kanchan Wali AY 2019-20 brought on record by the Revenue to show that stamp duty value as on 20.12.2014 exceeded the agreed consideration of Rs.20,00,000/-.

7.5. Ld. Sr. DR, on the other hand, supported the orders of the authorities below and submitted that the registered sale deed is a valid document, executed and signed by assessee before the Sub-Registrar, and that the value of Rs.66,10,000/- recorded therein cannot lightly be departed from. It was submitted that assessee having failed to satisfactorily explain the source of the balance amount of Rs.49,40,500/-, ld. Assessing Officer was fully justified in bringing the same to tax as unexplained investment under section 69 and that the order of ld. CIT(A) confirming the addition does not call for any interference.

ITA No. 2145/Mum/2026 Kanchan Wali AY 2019-20 ledger accounts of maintenance and electricity charges paid in respect of the said premises, since the year 2014, in the books of the partnership firm M/s Continental Contractors, which establish that assessee and her husband were put in possession of and were utilizing, the property from the year 2014 itself. Neither ld. Assessing Officer nor ld. CIT(A) has controverted the existence or the genuineness of the Agreement to Sell dated 20.12.2014, nor has any material been brought on record to show that the payment of Rs.20,00,000/- reflected in the bank statements is bogus or otherwise unexplained.

8.1. The registered Sale Deed came to be executed only on 13.06.2018, admittedly on account of the said Agreement to Sell not having been registered earlier. It is by now well settled that registration of a document is only a formal act and that where the agreement to purchase and payment of consideration precede the date of registration, the year of acquisition of the property is to be determined with reference to the date of the agreement and payment and not merely the date of registration. Once assessee produced documentary evidence, in the form of the Agreement to Sell and the corresponding bank statements, to demonstrate that the consideration of Rs.20,00,000/- was paid and the transaction stood concluded in FY 2014-15, the onus stood duly discharged and it was for the Revenue to bring on record cogent material to displace the same, which admittedly has not been done.

8.2. Section 69 applies where, in the financial year immediately preceding the assessment year, assessee has made investments which are not recorded in the books of account and assessee offers no explanation about the nature and source of the investment or the 9

ITA No. 2145/Mum/2026 Kanchan Wali AY 2019-20 explanation offered is not satisfactory. The said provision, thus, is attracted only in relation to an investment made in the relevant previous year. On the facts of the present case, the investment of Rs.20,00,000/- towards the purchase consideration of the property was, admittedly, made in FY 2014-15, and not in FY 2018-19 relevant to the year under consideration, i.e., AY 2019-20. The only payment made by assessee during FY 2018-19 was a sum of Rs.3,30,500/- towards stamp duty and registration charges and it is an admitted position, borne out even from the finding recorded in the assessment order itself that the said payment was reflected in and duly explained with reference to the bank statement filed by the assessee. In these circumstances, we find that the very foundational requirement for invocation of section 69 in AY 2019-20, namely, the making of an unexplained investment during the previous year relevant to that assessment year, is conspicuously absent and the addition of Rs.49,40,500/- as unexplained investment under section 69 is, therefore, unsustainable in law.

8.3. We also find merit in the contention raised on behalf of the assessee that mere circumstance that the registered sale deed, executed in FY 2018-19 to complete a statutory formality in respect of a transaction already concluded in FY 2014-15, records a value of Rs.66,10,000/- – being the value adopted solely for the purpose of computation of stamp duty in terms of the prevailing circle rate cannot, without independent corroborative material, be treated as representing the actual consideration paid or payable by assessee. Stamp duty valuation is a statutory fiction created for the limited purpose of the levy of stamp duty and registration charges under the relevant State 10

ITA No. 2145/Mum/2026 Kanchan Wali AY 2019-20 enactment; it does not, ipso facto, constitute proof of extra or on-money consideration having passed between the parties to a transaction of sale. In the present case, ld. Assessing Officer has not brought on record even a shred of material, whether by way of statement of the vendor, seized document, cash trail or otherwise, to show that any amount over and above Rs.20,00,000/- was, in fact, paid by assessee. In the absence of any such material, the addition made purely on the strength of the value mentioned in the registered sale deed, without anything more, amounts to an addition based on surmise and conjecture, which is impermissible in the eyes of law.

8.4. In so far as the alternative submission of ld. Counsel for the assessee regarding the applicability, or otherwise, of section 56(2)(x) read with section 50C is concerned, we find that ld. Assessing Officer has, at no stage, invoked the said deeming provision, nor examined its applicability on the facts of the present case. It is well settled that an addition sustained in appeal must fall within the four corners of the charging or deeming provision actually invoked by the Assessing Officer in the assessment order and it is not open to an appellate authority to sustain an addition made under section 69 by recourse to an altogether different deeming fiction under section 56(2)(x) which was never put to assessee nor formed the basis of the assessment. We, therefore, do not consider it necessary or appropriate to examine, in the present proceedings, the hypothetical applicability of section 56(2)(x) read with section 50C to the facts of the present case, save to note that the addition as actually made, being under section 69 of the Act, cannot be sustained for the reasons discussed hereinabove.

ITA No. 2145/Mum/2026 Kanchan Wali AY 2019-20 8.5. For the reasons aforesaid, we hold that the addition of Rs.49,40,500/- made under section 69 is deleted. Ground no. 4 raised by the assessee is allowed.

Order pronounced in the open court on 31st August, 2026.

Sd/- Sd/- [Amit Shukla] [Girish Agrawal] Judicial Member Accountant Member Dated: 31st August, 2026 MP, Sr. PS