DY. CIT, CENTRAL CIRCLE-4(4), MUMBAI, MUMBAI vs. NANDLAL MOHANLAL NARANG, PUNE

This appeal by the Revenue is directed against the order dated 04.07.2025 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for the assessment year 2021-22 arising from the assessment order passed under section 143(3) of the Income-tax Act, 1961.

The Revenue has challenged the action of the learned CIT(A) in deleting the addition of Rs.1,43,42,246/- made by the Assessing Officer under section 69A read with section 69B of the Act on account of alleged cash payment for purchase of land.

Briefly stated, the assessee is an individual engaged in the business of sale of immovable properties. The assessee filed the return of income declaring total income of Rs.16,60,640/-. The assessment was completed under section 143(3) determining the total income at Rs.1,60,02,890/- after making an addition of Rs.1,43,42,246/- under section 69A read with section 69B of the Act. The addition was made on the basis of the material unearthed during the search conducted in the case of DB Realty and Dynamix Group and the statement recorded under section 132(4) of Shri Suresh Atkur, wherein he stated that approximately 17 acres of land were sold to Shri Nandlal Narang and that cash was received in respect of sale of about 79 acres of land to various purchasers except in respect of approximately 36 acres sold to Ms. Suzan Homann and Ms. Nicole Araujo. The learned CIT(A), however, deleted the addition primarily on the ground that the Assessing Officer had made addition merely on statements of Shri Suresh Atkur and Shri Vinod Goenka u/s 132(4) of the Act without making any independent enquiry to ascertain the fair value of the land or to establish that the assessee had paid any amount over and above the registered consideration and further observed that the cheque consideration was higher than the stamp duty valuation.

The appeal was fixed for hearing on five occasions commencing from 25.11.2025 and lastly on 13.07.2026. However, none appeared on behalf of the respondent-assessee. We, therefore, proceed to dispose of the appeal ex parte qua the assessee after hearing the learned Departmental Representative and perusing the material available on record. The learned Departmental Representative took us through the assessment order as well as the impugned order of the learned CIT(A) and submitted that the learned CIT(A) erred in deleting the addition without appreciating the incriminating material found during the course of search and the statements recorded under section 132(4) of the Act.

We have considered the submissions of the learned Departmental Representative and perused the material available on record. We find that the Assessing Officer has made the impugned addition on the basis of the search findings and the statement recorded under section 132(4) of Shri Suresh Atkur, wherein he had stated that cash was received in the sale transactions relating to about 79 acres of land and that around 17 acres were sold to the present assessee and only in the case of sale of 36 acre land to Ms. Suzan and Ms. Nicole Araujo no cash was involved. The learned CIT(A) has deleted the addition mainly for the reason that the Assessing Officer had not made any independent enquiry regarding the market value of the land or whether there was any undervaluation in the transaction and also because the cheque consideration was higher than the stamp duty valuation.

In our considered view, the approach adopted by the learned CIT(A) is not sustainable. The addition made by the Assessing Officer is founded upon the search material and statements recorded under section 132(4) of the Act. If, according to the learned CIT(A), further factual verification or independent enquiry was necessary before arriving at a proper conclusion, the learned CIT(A) was fully empowered to undertake such exercise. It is well settled that the powers of the Commissioner (Appeals) are co-terminus with those of the Assessing Officer and he can make or direct such enquiries as are necessary for proper adjudication of the issues arising in appeal. Therefore, we are unable to subscribe to the reasoning of the learned CIT(A) that the addition deserves to be deleted merely because the Assessing Officer had not conducted certain enquiries, without himself exercising the statutory powers vested in the appellate authority.

Considering the totality of the facts and circumstances of the case, we deem it appropriate to set aside the impugned order of the learned CIT(A) and restore the matter to his file for fresh adjudication. The learned CIT(A) shall make or cause to be made all such enquiries as may be considered necessary, including examination of the search material, statements recorded under section 132(4), surrounding circumstances and any other relevant evidence, and thereafter pass a speaking order in accordance with law after affording adequate opportunity of hearing to both the parties. We order accordingly.

In the result, the appeal of the Revenue is allowed for statistical purposes.