VIJAY POPATLAL SURANA,NASHIK vs. INCOME TAX OFFICER, WAR 2(1), NASHIK

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ITA 2214/PUN/2025Status: DisposedITAT Pune25 May 2026AY 2023-245 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition was based on surmises and conjectures as the AO did not confront the assessee with specific seized documents or statements from the search on the developer. The AO's reliance on vague information without independent corroboration was found unjustified.

What were the facts?

The assessee claimed to have purchased office premises in 'Star Plus A' and made payments via cheque. The AO, relying on information from an investigation wing regarding a search on the developer, added Rs. 6,00,000 as alleged cash payment for a unit in 'Star Plus B', citing Section 69. The CIT(A) upheld this addition.

What were the issues?

Whether the addition of Rs. 6,00,000 as unexplained cash payment for property purchase is sustainable without confronting the assessee with specific seized material from a third-party search. Whether assessment proceedings initiated under general provisions were valid when special procedures might apply.

Which sections of the Income-tax Act were involved?

Section 69,Section 143(2),Section 142(1),Section 153C,Section 148,Section 132,Section 131,Section 271AAC(1),Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI Dr. DIPAK P. RIPOTE & SHRI VINAY BHAMORE

For Appellant: Shri Chinmay Pathak
For Respondent: Shri Harish Bist, Addl.CIT-DR

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the assessee against the order of the Ld.CIT(A) (NFAC), Delhi [Ld.CIT(A)] u/s 250 of the Income Tax Act, 1961 (Act) dated 18.07.2025 for AY 2023-24.

2.

Grounds of appeal raised by the assesse are as under:

1]The learned CIT(A) erred in confirming the addition of Rs.6,00,000 made by A.O. u/s 69 towards alleged cash payment made to M/s Deepak Builders and Developers for purchase of Unit No. FS 201 in Project 'Star Plus B' without appreciating that the said addition made by the A.O. merely on the basis of information forwarded by Inv. Wing without conducting any independent enquiry and without confronting any material seized during search action conducted on M/s Deepak Builders and Developers, was apparently unjustified on facts of the case and in law. 2]The learned CIT(A) failed to appreciate that the information received from Inv. Wing contained various discrepancies such as no cheque payment of Rs.5,60,000 as mentioned in the said Information, was

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actually found to be made by the appellant towards purchase of unit as also accepted by the CIT(A) and also, the appellant had purchased Unit in Project 'Star Plus A' and not Star Plus B as wrongly stated in the information forwarded by Inv. Wing and hence, such incorrect information could not have been relied upon to make any addition in the hands of the appellant in the absence of any corroborative material brought on record by the A.O. to prove that the appellant had made any unaccounted cash payment of Rs.6,00,000. 3]The learned CIT(A) erred in not appreciating that the appellant had not made any cash payment of Rs.6,00,000 to M/s Deepak Builders and Developers and this fact was also evident from ledger extract of the appellant in books of M/s Deepak Builder and Developers and therefore, the addition made by the A.O. of Rs.6,00,000 u/s 69 merely on the basis of some incorrect information received from Inv. Wing was not justified on facts of the case and in law. 4]The learned CIT(A) ought to have appreciated that even after multiple written requests, the A.O. did not confront any seized material or statement on oath recorded during search action u/s 132 conducted on M/s Deepak Builders and Developers, which formed the basis for the allegation levelled against the assessee that he had made cash payment of Rs.6,00,000 for purchase of unit and hence, the addition made by the A.O. merely on the basis of some information received from Inv. Wing which demonstrated to be factually incorrect, is not justified in law. 5]The learned CIT(A) further erred in not appreciating that the notice u/s 143(2) was issued on the basis of information pertaining to the assessee seized during search action u/s 132 conducted on a third party i.e. M/s. Deepak Builders and Developers on 20.04.2023 and therefore, the asst. proceedings initiated under the general provisions of section 143 without following the special procedure prescribed u/s 153C read with the amended provisions of section 148, are not sustainable in law. 6]The appellant craves leave to add/ alter/ amend any of the grounds of appeal.

3.

We have heard both the parties and peruse the records.

4.

In this case assesse is an individual, assessee filed return of income for AY 2023-24 on 10.10.2023 declaring total income of Rs. 9,53,870/-.

5.

Assessee case was selected for compulsory scrutiny. Accordingly notice u/s 143(2) and notice u/s 142(1) were served on assessee.

6.

In this case, the AO had received certain information regarding on money payment for purchase of property. During the scrutiny proceeding assessee filed copy of his bank statements and submitted that assessee

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has purchased office premises in a building called Star Plus-A wherein assesse had made payment as under:

Date of Name of Party Amount paid Bank payment payment Rs. Made 12-12-2022 Deepak Builders and 450000/- Axis Bank Developers 07-01-2023 Deepak Builders and 500000/- Axis Bank Developers

7.

Assessee denied any cash payments. Assessee also submitted that it has been alleged that assessee purchased premises in Star Plus B, which is incorrect, Assesse has purchased premises in Star Plus A. Therefore, assesse pleaded that information with the AO was incorrect. However, Ld AO made addition the relevant paragraph reproduced as under:

Quote “3.8 Conclusion drawn: In view of the above mentioned facts & all circumstances of the case and also considering the documents uploaded by the assessee, it is observed that the assessee has failed to file the plausible submission with regard to payments Rs.11,60,000/- (cash Rs.6,00,000/- and paid by cheque of Rs.5,60,000/-) to Shri Deepak Kalyanji Chande, Proprietor of M/s Deepak Builders & Developers made during the year under consideration. Also, as per above information the assessee has paid Rs.11,60,000/- (cash Rs.6,00,000/- and paid by cheque of Rs.5,60,000/-) to Shri Deepak Kalyanji Chande, Proprietor of M/s Deepak Builders & Developers to purchase a unit in his project named "Star Plus B" during the F.Y. 2022-23 relevant to the A.Y. 2023-24. Further, the assessee has failed to explain the source of said payments of Rs.11,60,000/- to Shri Deepak Kalyanji Chande for the Α.Υ. 2023-24. Therefore, the amount of Rs.11,60,000/- is treated as unexplained investment of the assessee which is liable to charge to income tax for the year under consideration and the same is added to the total income of the assessee for the A.Y. 2023-24 u/s 69 read with section 115BBE of the Act. Also, penalty proceedings u/s 271AAC(1) are being separately initiated for unexplained investment.”Unquote

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8.

Aggrieved by the Assessment Order, assessee filed appeal before Ld. CIT(A). Ld. CIT(A) upheld the addition. Relevant paragraph of order u/s 250 of the Act is reproduced as under:

Quote“5.4. The appellant has denied that no any cash payment was made by him. However, as per information and the material evidence found in the course of search & seizure made on the developer, the appellant has made Cash payment of Rs.6,00,000/- during the subject AY. The appellant has not furnished any credible evidence to substantiate that the cash payment mentioned therein was not made by him. On the other hand, the evidences and statements recorded in the course of search on Deepak Chand Group clearly reveals that the appellant had paid the said amount over and above the agreed cost of consideration recorded in the books. The appellant also failed to answer as to how and why such entry and such statement was made by the developer group, if no such payment in cash was ever made by him. In view of such over whelming evidence, the addition made requires no interference and the amount will be treated as unaccounted income in the hand of the appellant. 5.4.1. In view of the above and the fact that the appellant failed to produce any relevant document to substantiate the source of the payment made in cash during the subject AY. The addition amounting to Rs.6,00,000/- is, therefore, confirmed. Therefore, these grounds of appeal are partly allowed.”Unquote

9.

In this case, assessee has denied any cash payment made to Deepak Builders and Developers. Assesse had admitted that he has purchased office premises in Star Plus A, however, AO has alleged that assesse has purchased the premises in Star Plus B. Assesse has specifically denied such transaction. The Assessment Order refers search conducted in the case of Deepak Builders and Developers, wherein certain documents were seized regarding on money payments. However, in the Assessment Order those specific document has been referred. There is a vague reference to some seized documents. Nowhere, the AO has brought on record any specific document which has details of cash payments by assessee. AO has not confronted any document to the assessee. AO has not referred to any statement recorded u/s 132(4) or 131, wherein assesse’s name has

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appeared. In these facts and circumstances of the case the addition made by the AO is based on surmises and conjectures. Hence, the addition cannot be sustained. Accordingly, AO is directed to delete the addition. Accordingly, Ground No. 1, 2, 3 and 4 raised by the assessee regarding the merits of the addition are allowed.

10.

In this case, in the assessment order, AO has vaguely referred to some information related to search in the case of Deepak Builder and Developers. The AO has not referred to any specific document which was seized during the search proceedings. Therefore, there is no merit in the Ground No. 5 raised by the assessee. Accordingly, Ground No. 5 is dismissed.

11.

In the result the appeal of assessee is partly allowed.

Order pronounced in the open Court on 25th May, 2026

Sd/- Sd/- (VINAY BHAMORE) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/Pune; दिन ांक/Dated : 25-05-2026 TNMM

आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: अपील र्थी / The Appellant 1. प्रत्यर्थी / The Respondent 2. 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘SMC’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

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