DEPUTY COMMISSIONER OF INOCME TAX, NASHIK vs. RAJKUMAR BABULAL AGRAHARI, NASHIK

PDF · subscribers
ITA 2495/PUN/2025Status: DisposedITAT Pune25 June 2026AY 2014-1511 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal upheld the deletion of the addition made by the Assessing Officer. The CIT(A) correctly considered the documentary evidence submitted by the assessee, which demonstrated that the investments in property were made in prior years and properly accounted for.

What were the facts?

The Assessing Officer added Rs. 2,85,07,500/- as unexplained investment in immovable properties based on AIR data, as the assessee failed to provide explanations. The CIT(A) deleted the addition after the assessee provided documentary evidence showing the properties were purchased in earlier years and payments were accounted for.

What were the issues?

Whether the addition of unexplained investment in property is justified when the assessee provides evidence of purchase in prior years and proper accounting. Whether the CIT(A) erred in deleting the addition based on additional evidence.

Which sections of the Income-tax Act were involved?

Section 69,Section 143(2),Section 142(1),Section 144,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

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

Before: SHRI R. K. PANDA & Ms. ASTHA CHANDRA

For Appellant: Shri Kapil Hirani (virtual)
For Respondent: Ms. Bhavya

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND Ms. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.2495/PUN/2025 Assessment year: 2014-15 DCIT, Circle-1, Rajkumar Babulal Agrahari, Nashik Flat No.01, Nandita Apartment, Vs. Loksahkar Nagar, Dindori Road, Panchavati, Nashik 422 003, Maharashtra PAN: ADDPA4746K (Appellant) (Respondent) CO Nos. 36 and 38/PUN/2026 (Arising out of ITA No.2495/PUN/2025) Assessment year: 2014-15 Rajkumar Babulal Agrahari, DCIT, Circle-1, Flat No.01, Nandita Apartment, Nashik Loksahkar Nagar, Vs. Dindori Road, Panchavati, Nashik 422 003, Maharashtra PAN: ADDPA4746K (Cross Objector) (Appellant in the appeal)

Assessee by : Shri Kapil Hirani (virtual) Department by : Ms. Bhavya Date of hearing : 22-06-2026 Date of pronouncement : 25-06-2026 O R D E R PER BENCH :

ITA No.2495/PUN/2025 is filed by the Revenue is directed against the order dated 29th August, 2025 of the ld.CIT(A)/NFAC, Delhi relating to assessment year

2 ITA No.2495/PUN/2025 and CO Nos. 36 and 38/PUN/2026 Rajkumar Babulal Agrahari

2014-15. Assessee has filed two Cross Objections bearing Nos. CO No.36/PUN/2026 and CO No.38/PUN/2026 against the appeal filed by the Revenue. The ld. Counsel for the assessee at the time of hearing submitted that inadvertently the assessee has filed two Cross Objections and CO No.38/PUN/2026 be treated as ‘Infructuous’ being a duplicate one. In view of the above, CO No.38/PUN/2026 filed by the assessee is dismissed as ‘Infructuous’.

2.

There is a delay of 108 days in filing of the Cross Objection by the assessee for which the assessee has filed a condonation application along with an Affidavit explaining the reason for such delay. After considering the contents of the condonation application filed along with the Affidavit and after hearing the ld. Departmental Representative, the delay in filing of the Cross Objection by the assessee is condoned.

3.

Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 29.11.2014 declaring total income at Rs.15,72,980/-. Case was selected for scrutiny under CASS and accordingly statutory notice u/s.143(2) of the Act was issued and served on the assessee. Subsequently, a notice u/s.142(1) of the Act along with a questionnaire was issued and served on the assessee in response to which there was no compliance from the side of the assessee. The Assessing Officer therefore proceeded to complete the assessment on the basis of material available on record and completed the assessment u/s.144

3 ITA No.2495/PUN/2025 and CO Nos. 36 and 38/PUN/2026 Rajkumar Babulal Agrahari

of the Act determining the total income of the assessee at Rs.3,00,80,480/- wherein he made addition of Rs.2,85,07,500/- by observing as under :

“6. The assessee has failed to furnish any evidence in respect of the purchase of immovable property during the year. The assessee has been provided multiple opportunities but has availed none. From the AIR information it is seen that there are purchase of immovable properties to Rs.1,40,00,000/- and Rs.1,45,07,500/- respectively. The assessee has failed to explain the source of such purchases of immovable property amounting to Rs.2,85,07,500/- and the same is added as unexplained investment u/s 69. 6.1 The assessee has been provided opportunity to explain details of such purchase of immovable property multiple times. The assessee has not furnished any detail. Further, assessee has not furnished any details of purchase deed. The assessee has been issued notices u/s 142(1) to which he has failed to comply altogether. The assessee has failed to comply with statutory notices issued under the Income Tax Act, 1961. Efforts have been made to provide assessee with opportunity to explain his case. The assessee has failed to comply with the aforementioned notices and clearly qualifies to be a case to be assessed as per best judgment. In absence of any explanation provided by the assessee assessment is being made ex-parte and the entire amount of Purchase of immovable property of Rs.2,85,07,500/- is being added to the total income of the assessee in the light of the above. The assessee has concealed his income. So Penalty proceedings u/s 271(1)(c) are being initiated separately.” 4. Before ld.CIT(A)/NFAC, the assessee filed certain additional evidences based on which the ld.CIT(A)/NFAC called for a remand report from the Assessing Officer. After considering the remand report from the Assessing Officer and the rejoinder of the assessee to such remand report the ld.CIT(A)/NFAC deleted the addition by observing as under :

“7. I have carefully considered the assessment order, the written submissions of the appellant dated 26.12.2017, the remand report of the Ld. Assessing Officer dated 22.03.2018, the rejoinder dated 27.05.2019, and the material brought on record including copies of registered agreements, allotment letters, receipts, bank statements and audited financial statements.

4 ITA No.2495/PUN/2025 and CO Nos. 36 and 38/PUN/2026 Rajkumar Babulal Agrahari

7.1 The addition of Rs.2,85,07,500/- was made by the Assessing Officer u/s 69, alleging unexplained investment in Flat Nos. 9 & 10, Panchavati Anand Sankul (Rs.1,40,00,000/-) and Shop No. 5, Haware Infotech Park, Vashi (Rs.1,45,07,500/-), solely based on AIR data. The assessee has demonstrated with documentary evidences that these properties were not purchased in the year under consideration, but in earlier years, and the payments were duly accounted for in the books of account and financial statements filed with returns of income. 7.2 In respect of Flat Nos. 9 & 10 at Panchavati Anand Sankul, the assessee produced the Agreement for Sale dated 25.11.2011 and the Deed of Apartment dated 08.07.2013. The consideration of Rs.1,40,00,000/- was paid during F.Y. 2011-12 and is duly reflected in the audited balance sheet as on 31.03.2012 under Schedule of Fixed Assets, supported by the ledger and financial statements. Thus, no investment was made during F.Y. 2013- 14 relevant to Α.Υ. 2014-15. 7.3 With regard to Shop No. 5 at Haware Infotech Park, the assessee produced the Allotment Letter dated 25.09.2009, receipts issued by the promoter, and ICICI Bank statements evidencing payments aggregating to Rs.1,41,00,000/- during March-September 2009. The total purchase consideration of Rs.45,96,700/- is reflected as "Shop Advance" in the audited balance sheet as on 31.03.2012, and later capitalised in F.Y. 2013- 14 when the Agreement to Sell was registered. The higher value of Rs.1,45,07,500/- appearing in the AIR is only the stamp duty valuation adopted by the Sub-Registrar at the time of registration, and not the actual consideration paid by the assessee. 7.4 These facts were independently verified by the Assessing Officer during remand proceedings. In his report dated 22.03.2018, the Ld. AO has clearly recorded that the assessee's submissions "are found to be duly supported and reflected in the details submitted" and that "the assessee's contention finds support in the details submitted." The only adverse observation was that the assessee had not furnished these details at the time of original assessment. However, as rightly pointed out by the appellant in the rejoinder, such non-compliance was on account of genuine domestic hardship and bereavement, and cannot be a ground to sustain an otherwise unsustainable addition. 7.5 It is a settled principle that what is material is the nature and source of the investment and whether the same is duly explained by evidence. In the present case, the assessee has placed on record conclusive documents- registered deeds, audited accounts, bank statements and receipts-

5 ITA No.2495/PUN/2025 and CO Nos. 36 and 38/PUN/2026 Rajkumar Babulal Agrahari

demonstrating that the source of investment is explained and duly recorded in books. The Assessing Officer himself, in remand, has confirmed the correctness of the assessee's claim. Hence, the very foundation of the addition stands demolished. 7.6 In view of the above discussion, I hold that the addition of 2,85,07,500/-made u/s 69 is wholly unsustainable. The evidences placed by the assessee and the confirmation of facts by the AO in remand proceedings conclusively establish that there was no unexplained investment in the year under appeal. 8. Accordingly, the addition is directed to be deleted and the appeal of the assessee is allowed.”

5.

Aggrieved with such order of the Ld. CIT(A)/ NFAC, the Revenue is in appeal before the Tribunal by raising the following grounds : “1. On facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition made u/s 69 of the Act of Rs.2,85,07,500/- by the AO on account of unexplained investment in Immovable properties i.e. (i) Flat No. 9 & 10, Anand Sankul, Nashik and (ii) Shop No. 5, Haware Infotech Park, Vashi, without properly appreciating the facts of the case and the applicable provisions of law. 2. On facts and circumstances of the case, the Ld. CIT(A) has failed to appreciate that the assessee has not explained the payments made towards purchase of immovable property le. Flat No. 9 & 10, Anand Sankul, Nashik. The 'Agreement to Sale', dated 25/11/2011, at clause no. 5 specifies that the payment of Rs.25,00,000/- was made in cheque and cash without exact details thereof. 3. On facts and circumstances of the case, the Ld. CIT(A) has failed to appreciate that the 'Deed of Apartment', dated 31/05/2013, does not specify anywhere about the exact details of payments made at Rs.1,40,00,000/- towards purchase of property ie. Flat No. 9 & 10, Anand Sankul, Nashik over the period. 4. On facts and circumstances of the case, the Ld. CIT(A) has failed to appreciate that the assessee has not fully and completely disclosed the details of the transactions in his books of accounts as regards the purchase of immovable property ie. Flat No. 9 & 10, Anand Sankul, Nashik. The

6 ITA No.2495/PUN/2025 and CO Nos. 36 and 38/PUN/2026 Rajkumar Babulal Agrahari

assessee has debited the property at Rs.1,47,23,500/- in 'Fixed Assets' as on 31/03/2014 inclusive of stamp duty and registration. 5. On facts and circumstances of the case, the Ld. CIT(A) has failed to appreciate that the assessee has purchased Shop No. 5, Haware Infotech Park, Vashi on 29/04/2013, where the agreed value stands at Rs.45,96,700/- and the Government value for stamp duty purpose stands at Rs.1,45,07,500/-. The assessee has debited this property at Rs.55,01,700/- In 'Fixed Assets' as on 31/03/2014 inclusive of stamp duty and registration. 6. On facts and circumstances of the case, the Ld. CIT(A) has failed to appreciate that the provisions of sec.56(2)(vii)(b)(ii) of the Act was ignored and there is loss of revenue as regard the purchase of Shop No. 5, Haware Infotech Park, Vashi. 7. On facts and circumstances of the case, the Ld. CIT(A) has failed to appreciate that the assessee has not conclusively explained the purchases of immovable properties and the transactions in his books of accounts with corroborative evidence. 8. The appellant craves leave to add, amend, alter, or withdraw any ground or grounds at the time of hearing.”

6.

Ld. Departmental Representative strongly relied on the order of the Assessing Officer and the grounds raised by the Revenue in appeal.

7.

Ld. Counsel for the assessee on the other hand drew the attention of the Bench to the contents of the Remand Report and submitted that the Assessing Officer after verification of the various details during remand proceedings has accepted that the assessee has not made any investment during the year and all these investments are reflected in the balance sheet of the preceding assessment years. Referring to page 116 of the paper book he drew the attention of the Bench to the balance sheet as on 31.03.2011. In the Schedule-E – Fixed Assets the assessee has shown Flat No. 9 and 10, Anand Sankul Panchavati, Nashik at

7 ITA No.2495/PUN/2025 and CO Nos. 36 and 38/PUN/2026 Rajkumar Babulal Agrahari

Rs.1,47,23,500/-. Referring to page 126 of the paper book he drew the attention of the Bench to the balance sheet as on 31.03.2014 where Shop No.5 at Haware Infotech, Vashi has been shown at Rs.55,01,700/-. Referring to page 117 of the paper book he drew the attention of the Bench to the advance payment of Rs.41,00,000/- shown in the Balance Sheet as on 31.03.2012. Referring to the contents of the Remand Report reproduced by the ld.CIT(A)/NFAC, he submitted that once the Assessing Officer has accepted the contention of the assessee, there is no reason for Revenue to file an appeal. He accordingly submitted the grounds of appeal raised by the Revenue should be dismissed.

8.

We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and ld.CIT(A)/NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the assessment order passed u/s.144 of the Act made addition of Rs.2,85,07,000/- on the ground that as per the AIR information the assessee has purchased properties worth Rs.1,45,07,500/- and Rs.1,40,00,000/- and the return does not explain the huge investment in properties and the assessee did not submit any detail during the course of assessment proceedings. We find before ld.CIT(A)/NFAC the assessee filed certain evidences based on which the ld.CIT(A)/NFAC called for a Remand Report from the Assessing Officer who has submitted his Remand Report and which has been reproduced by ld.CIT(A)/NFAC in the order and which reads as under : thereupon:-

8 ITA No.2495/PUN/2025 and CO Nos. 36 and 38/PUN/2026 Rajkumar Babulal Agrahari

“The assessee has submitted the details regarding both the properties as under: 1. The residential flats purchased (Flat No. 9 & 10 Panchavati Anand Sankul were purchased on 25.11.2011 and registered agreement for purchase for an amount of Rs.1,40,00,000/- was executed. The same finds reflection in the balance sheet as on 31.03.2012. The assessee has submitted copies of the agreement and the returns with Balance sheet in support. The assessee has also contended that the deed of apartment has been executed on 18.05.2013 which is reflected in AIR data Since the agreement was already done and payments made during the FY 2011-12 itself, the same was duly reflected in balance sheet of the relevant year The assessee's submissions are found to be duly supported and reflected in the details submitted. 2. Shop No.5 Haware Infotech Park at Vashi, Navi Mumbai (Rs.1,45,07,500/-) The assessee has submitted that this purchase was made in FY 2009-10 for Rs.45.46,700/- The assessee was asked to submit the balance sheets for FY 2009-10 and 2010-11. The same has been submitted by the assessee during the course of remand proceedings. The assessee has also submitted the detalls regarding the payments made and the reflections thereof in the returns of income filed for relevant FYs. The assessee has submitted the details called for and it is seen that the assessee's contention finds support in the details submitted. This is however noted that there is such big time lag between booking of the unit and registration of the sale. The assessee has also submitted justification regarding the value of the property reflected in AIR data at a much higher figure than value of agreement. The same is attributable to adoption of the value on the date of sale deed. The assessee has given justification regarding correct adoption of value by him in the balance sheet by referring to provisions and applicability of Sec. 56(2 (vii)(b)(ii) of the Act. The same are found to be in order. To sum up, the assessee's contention are found to be in coherence with the details available with record. However the fact remains that the assessee did not file any details during the course of assessment proceedings and there is nothing to suggest that he was prevented by some reasons beyond his control from doing so. Submitted.

9 ITA No.2495/PUN/2025 and CO Nos. 36 and 38/PUN/2026 Rajkumar Babulal Agrahari

Yours faithfully, Sd/- (Manoj Sinha) Dy. Commissioner of Income Tax Circle-1, Nashik.”

9.

Since the Assessing Officer after examining the various details furnished by the assessee has accepted that the Residential Flat purchased on 25.11.2011 and Registered Agreement for purchase amount of Rs.1,45,07,500/- was executed and the same finds reflected in the balance sheet as on 31.03.2012, therefore, no addition of Rs.1,40,00,000/- could have been made on account of purchase of Flat No.9 and 10, Anand Sankul Panchavati, Nashik. Similarly, Shop No.5, Haware Infotech, Vashi was also shown in the balance sheet in F.Y. 2009-10 and 2010-11 which has been verified by the Assessing Officer during the assessment proceedings who has accepted the same. He has also given a finding that the difference in the sale deed and actual price paid is due to adoption of the value on the date of registration and provisions of section 56(2)(vii)(b)(ii) of the Act is applicable. The Assessing Officer has not given any adverse finding. Since ld.CIT(A)/NFAC based on the Remand Report of the Assessing Officer has deleted the addition, therefore, in absence of any contrary material brought to our notice by ld. Departmental Representative, we do not find any infirmity in the order of ld.CIT(A)/NFAC deleting the addition made by the Assessing Officer. Accordingly, the appeal filed by the Revenue is dismissed.

10 ITA No.2495/PUN/2025 and CO Nos. 36 and 38/PUN/2026 Rajkumar Babulal Agrahari

10.

CO No.36/PUN/2026 filed by the assessee is merely in support of the order of ld.CIT(A)/NFAC. Since we have already dismissed the appeal filed by the Revenue, therefore, the CO filed by the assessee becomes Infructuous. Accordingly, the same is dismissed.

11.

In the result, the appeal filed by the Revenue as well as the Cross Objections filed by the assessee are dismissed.

Order pronounced in the open Court on 25th June, 2026.

Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 25th June, 2026 Satish Satish Kumar Madishetty Digitally signed by Satish Kumar Madishetty Date: 2026.06.29 11:40:05 +05'30' आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant; प्रत्यर्थी / The Respondent 2. 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘B’ Bench, Pune ग र्ड फ ईल / Guard file. 5. आदेशानुसार/ BY ORDER, //True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

11 ITA No.2495/PUN/2025 and CO Nos. 36 and 38/PUN/2026 Rajkumar Babulal Agrahari

S.No. Details Date Initials Designation 1 Draft dictated on 25.06.2026 Sr. PS/PS 2 Draft placed before author 25.06.2026 Sr. PS/PS Draft proposed & placed before 3 25.06.2026 JM/AM the Second Member Draft discussed/approved by 4 25.06.2026 AM/AM Second Member Approved Draft comes to the 5 25.06.2026 Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on 25.06.2026 Sr. PS/PS 7 Date of uploading of Order 29.06.2026 Sr. PS/PS 8 File sent to Bench Clerk 29.06.2026 Sr. PS/PS Date on which the file goes to 9 the Office Superintendent Date on which file goes to the 10 A.R. 11 Date of Dispatch of order

More judgments on Section 69

All 9,011 judgments and leading authorities on Section 69 →

Recent GST High Court judgments

Search GST case law →