KASHINATH ANANT PAWAR,THANE vs. ITO WARD 3(2), THANE

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JM& SHRI ARUN KHODPIA, AM I.T.A. No.6059/Mum/2024 (Assessment Year: 2019-20) Kashinath Anant Pawar Income Tax Officer, Ward 3(2), 305/306, A Wing, Sagar Srushti, Kalyan Reti Bunder Road, Motha Gaon, Vs. Rani Mansion, Murbad Road, Kalyan- Dombivli-West, Thane-421202 West, Thane-421306 PAN: AQAPP9401A Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assesseeby : Shri Shriram Bajaj Revenueby : Shri Surendra Kumar Meena (Sr. DR) : 16.04.2026 Date of Hearing : 14.05.2026 Date of Pronouncement

O R D E R Per Arun Khodpia, AM: The captioned appeal,preferred by the assessee against the order of Commissioner of Income Tax Appeals/ National Faceless Appeal Centre (NFAC), Delhi [“the Ld. CIT(A)] dated 18.09.2024 for the assessment year 2019- 20, arises from assessment order u/s 147 of the Income Tax Act, 1961 (“the Act”) dated 27.03.2024 passed by Income Tax Officer Ward 3(2), Kalyan. The grounds of appeal are as under: “(i) On the facts and in the circumstances of the case and also in law, the learned C.I.T. (A) erred in confirming the action of AO of initiating reassessment proceedings in the appellant's case-

ITA No. 6059/Mum/2024 Kashinath Anant Pawar

(a) based on issue of notice u/s 148 by the Jurisdictional Assessing Officer as against issuing it in faceless manner in accordance with provisions of section 151A And; (b) Non-mentioning of the Document Identification Number (DIN) on approval granted by the Principal Commissioner of Income Tax-1, Thane under section 151(1). Your appellant, therefore, prays that initiation of reassessment proceedings be held invalid and resultant reassessment order passed be quashed. (ii) On the facts and in the circumstances of the case and also in law, the learned C.I.T. (A) erred in confirming the action of AO of initiating reassessment proceedings in the appellant's case based on issue of notice u/s 148 by the Jurisdictional Assessing Officer which is vague and not fulfilling the mandate of the applicable provisions. Your appellant therefore, prays that initiation of reassessment proceedings be held invalid and resultant reassessment order passed be quashed. (iii) On the facts and in the circumstances of the case, and also in law, the Ld. C.I.T. (A) erred in confirming addition of Rs.40,00,000/- u/s 69 of the Act, ignoring thesubmissions made by your appellant. Your appellant, therefore, prays that saidaddition be deleted.” 2. At the outset, Ld. Authorized Representative (‘AR’) of the assessee has submitted that he does not wish to press ground no.(i)(a) and (i)(b)of the present appeal, which is not objected by the Ld. Sr. DR. representing the revenue. Accordingly, it is permitted to not press ground no.(i)(a) and (i)(b) of the present appeal. Resultantly, aforesaid two grounds are dismissed as not pressed. 3. The brief facts of the case are that, the case of assessee was picked up for reopening for assessment u/s 147 on the basis of information shared through ‘Insight Portal’ uploaded by DCIT, Central Circle – 6(1), Mumbai, according to which during the search and seizure action on ‘GNP group”, engaged in the construction of industrial and commercial shops in Dombivali and Ambernath area of Thane District have sold an immovable property to the assessee for which the assessee has paid an amount of Rs.40,00,000/- as ‘on money’ to the said 2

ITA No. 6059/Mum/2024 Kashinath Anant Pawar concern. The assessee was show-caused about the aforesaid transactions which are found to be recorded in an excel sheet dated 11.04.2019 impounded from the premises of ‘GNP group’. In response, the assessee submitted, “I have not made any cash payment to builder and there are no cash withdrawal and deposit in bank accounts at all”. The submission of assessee was not found satisfactory by the Ld. AO, who treated the contentions of the assessee, devoid of merits stating that there was enough material on record to establish that the assessee has paid all money in cash for purchase of commercial/industrial unit. The information is case specific, name specific and transaction specific. The assessee is trying to avoid or conceal the income, which is detected from the excel sheet during the search. Accordingly, an addition of Rs.40,00,000/- was made u/s 69, treating the same as unexplained investment. 4. Being aggrieved, assessee preferred an appeal before the Ld. CIT(A), but was failed to succeed, the appeal of assessee stands dismissed by the Ld. CIT(A) with the following observations: “4.3 I have gone through the assessment order and record available. Presently. the reliance by AO on concrete evidence from the investigation wing is critical in the case. It indicates a rigorous approach taken by the AO in investigating potential tax evasion. The use of Section 69 to classify the unexplained investment is appropriate. given that it deals with investments made where the source is not satisfactorily explained. The assessee's failure to provide satisfactory explanations or rebuttals regarding the cash payments during assessment suggests a lack of adequate documentation or justification for the source of the funds used. 4.4 I have gone through the assessment order and record available. In the instant case, the appellant has argued that I am writing in response to the notice received under section 250 of the Income-tax Act, 1961, regarding the assessment order for Assessment Year (AY) 2019-20. The grounds of appeal outlined in your notice have been duly noted and I would like to provide a comprehensive response to address the issues raised. Breach of Procedural Fairness: The Assessing Officer (AO) has made an addition of Rs. 40,00,000 as an unexplained source and undisclosed transaction without duly 3

ITA No. 6059/Mum/2024 Kashinath Anant Pawar considering the Return of Income fled by the Appellant. This action violates the fundamental principle of procedural fairness. Clarity on the sourceof funds: Emphasize that the funds used for property purchase originated from the legitimate earnings of M/s Aries Media, as evidenced by audited financial statements and genuine bank transactions. Request for fair consideration: Appeal to the income Tax Officer to thoroughly review the provided evidence and to adjudicate the matter fairly, taking into account the legitimate nature of the transactions and the absence of any wrongdoing on the part of the assessee. His primary source of income is derived from involvement in advertising work on behalf of various parties. Additionally, He gets Remuneration of Rs. 10, 00,000/- annually from his LLP, Aries. And also he received profit Share from Aries Media (Exempt u/s 10(2A)) profit of Rs. 10,51,903 and This income is diligently reported and taxed as per the provisions of the Income Tax Act, 1961. Upon reviewing the evidence sheet dated 11/04/19 and 23/08/19, along with the Whats App group chat records dated 07/09/19 and 6/12/19, it becomes evident that the circumstances surrounding the case merit closer examination. It is important to note that the assessed party has made payments during the fiscal year 2020-2021, which renders the possibility of a cash payment of Rs 40 lakhs during the specified time improbable. Furthermore, it has been noted that the appellant made a purchase of a commercial shop from GNP Galleria, with a consideration amount of Rs 43,00,000. Out of this, the appellant paid Rs 35, 00,000 through IDBI Bank from his savings, dated 10/09/2020 and Rs 8, 00,000 amount dated 15/10/2020 and agreement was registered on 16/10/2020 It seems there is no option for cash payment in the Kashinath Pawar case due to the agreement being registered in FY 20-21, dated 16/10/2020. I humbly request you to expedite the resolution of this matter at your earliest convenience. this matter at 4.5 In my view, an "on-money" payment in real estate refers to an illegal transaction where a buyer pays a portion of the purchase price for a property in cash, and this amount is not documented or disclosed in the official sale agreement. This practice is often done to avoid paying taxes or to manipulate the reported value of the property. The seller and buyer agree to report a lower sale price in the official documents than what is actually paid. The difference, or "on-money," is paid in cash and is not recorded. Both parties avoid paying the full amount of taxes, such as stamp duty and capital gains tax, by reporting a lower transaction value. The assessee claims to have paid "on-money" for above mentioned property and pleading that the payment was made from disclosed sources, the appellant has also given handmade details of IDBI bank account number 0669102000010131 alongwith copies of sale deed to show that the appellant had sufficient funds to pay the consideration of the property as well as the on money Rs. 40,00,000. However, since the on-money payment was made in cash, the appellant needs to establish that the funds were not hidden but were withdrawn from a disclosed and legitimate source and a link of cash payment from legitimate source needs to be established, providing proof of disclosed bank credits or if the money was obtained through a loan,documentation such as loan agreements and bank statements showing the disbursement of loan funds. The appellant has not demonstrated that the individual had sufficient declared income to justify the payment along with presenting past income tax returns that reflect a high enough income to cover the on-money payment, wealth statements or balance sheets that would include the funds used for the payment, thereby indicating that the money was part of the individual's disclosed wealth. The AO has made the addition on the basis of statement of Kapil Talreja which was confronted to Sh. Girish pawar promoter of the GNP group and partner in the assessees' firm, lengthy whatsapp chats of 14 pages and incrimination material discussed by AO on pg. 12, 14 and 16 of the assessment order. Basically, the appellant 4

ITA No. 6059/Mum/2024 Kashinath Anant Pawar has failed to establish that the payment of on money was from disclosed sources. The evidence of disclosure of Rs. 40 lakhs before department has not been submitted or established. Hence, the genuineness of the disclosure of Rs. 40 lakhs before department in the current years or in previous years returns remained unestablished. Hence, there is no force in the argument of the appellant and the appeal of the assessee is dismissed.” 5. Ld. AR of the assessee submitted that the identical issue has been dealt with and decided by ITAT Mumbai in various cases wherein, in absence of any corroborative evidence about the cash payment of the assessee, no addition can be made only on the basis of information found from the premises of third party. 6. Per contra, Ld. Sr. DR representing the revenue vehemently supported the orders of revenue authorities. 7. We have considered the rival submissions, perused the material available on record. We found that under identical facts and circumstances, emanating from the same search action in ‘GNP Group’, ITAT Mumbai in the case of Veena Hiralal Mehta vs. DCIT Central Circle 4(2), ITA No.5492 & 5493/M/2025, had decided the issue in favour of assessee with following findings: “29. We reiterate that the identical addition has elaborately been dealt with by the Hon'ble Coordinate Benches of the Tribunal in the cases referred to above, which is otherwise unsustainable on the aforesaid analyzation made by us independently specific to the effect that no incriminating material directly connected with the assessee, such as cash voucher, receipt, ledger or any document signed by the Assessee, was ever found during the search or post-search proceedings, either from the Rubberwala Group or Мг. Ansari, whose statement has been made the foundation for making the addition, and thus in that eventuality, the onus shifts upon the Revenue Department to substantiate/corroborate the evidence collected during the search proceedings and to offer an opportunity for confrontation or cross-examination of the witnesses, whose statements were relied upon, while making the addition. The AO though provided the relevant material collected during the search proceedings but in the Assessment order nowhere mentioned such material/documents, except as referred to above such as pen derive, excel sheet and statement of Mr. Ansari etc.. The AO also failed to substantiate the evidence collected and give any opportunity of cross examinations of the witnesses, whose statements were relied on and/or made a foundation for making the addition without considering peculiar fact that the Assessee otherwise has purchased the Shop/property under consideration on a consideration/value, which is otherwise more 5

ITA No. 6059/Mum/2024 Kashinath Anant Pawar than the stamp duty value, as determined by the Stamp Duty Valuation Authority. Further, the Assessing Officer also failed to brought on record any comparable case in the same shopping mall, so as to ascertain the actual rate of transactions made. Thus, in cumulative effects, the addition under consideration is deleted by allowing the appeal i.e. ITA No. 5492/M/2025 filed by the assessee.”

Order pronounced in the open court on 14-05-2026.

Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (ARUN KHODPIA) Judicial Member Accountant Member

Mumbai, Dated : 14-05-2026. Ankit, Sr. PS

ITA No. 6059/Mum/2024 Kashinath Anant Pawar

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai