DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(3)(1), MUMBAI, MUMBAI vs. YELLOW BANANA FOOD COMPANY PRIVATE LIMITED, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER)

ITA No. 1472/MUM/2026 Assessment Year: 2017-18

Deputy Commissioner of Yellow Banana Food Company Income Tax, Private Limited, Vs. Circle-3(3)(1), Mumbai, No. 1, Plt No. A-8, Durga Room No. 522, Aayakar Chambers, Ground Floor, Veera Bhavan, M K Road, Industrial Estate, Veera Desai Rd, Mumbai – 400020, Andheri West, Mumbai – 400053 Maharashtra. Maharashtra. PAN NO. AAACY 2431 N Appellant Respondent

Assessee by : Shri Narayan Atal (Virtually Present) Revenue by : Shri Arun B. (SR. AR)

Date of Hearing : 07/05/2026 : 18/05/2026 Date of pronouncement ORDER PER OM PRAKASH KANT, AM

This appeal by the Revenue is directed against the order dated 01.12.2025 passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [“Ld. CIT(A)”], for Assessment Year 2017-18, whereby the addition of Rs.2,35,52,358/- made by the Assessing Officer under Section 69B

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of the Income-tax Act, 1961 (“the Act”) on account of alleged tax Act, 1961 (“the Act”) on account of alleged tax Act, 1961 (“the Act”) on account of alleged unexplained investment in purchase of immovable property came to unexplained investment in purchase of immovable property came to unexplained investment in purchase of immovable property came to be deleted. The grounds raised in the appeal are reproduced as be deleted. The grounds raised in the appeal are reproduce be deleted. The grounds raised in the appeal are reproduce under:

“Grounds of Appeal 1. "On the facts and in the circumstances of the case and in law, the Ld. 1. "On the facts and in the circumstances of the case and in law, the Ld. 1. "On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Commissioner of Income-tax (Appeals) erred in deleting the addition of tax (Appeals) erred in deleting the addition of Rs.2,35,52,358/- made by the Assessing Officer under section 69B of the made by the Assessing Officer under section 69B of the Income- made by the Assessing Officer under section 69B of the tax Act, 1961, on account of unexplained investment in purchase of immovable tax Act, 1961, on account of unexplained investment in purchase of immovable tax Act, 1961, on account of unexplained investment in purchase of immovable property." 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the addition under section 69B cannot be made merely on erred in holding that the addition under section 69B cannot be made merely on erred in holding that the addition under section 69B cannot be made merely on the basis of stamp duty valuation, without appreciating that the assessee failed e basis of stamp duty valuation, without appreciating that the assessee failed e basis of stamp duty valuation, without appreciating that the assessee failed to discharge the onus cast upon it to explain the substantial difference between to discharge the onus cast upon it to explain the substantial difference between to discharge the onus cast upon it to explain the substantial difference between the declared purchase consideration and the value adopted by the stamp the declared purchase consideration and the value adopted by the stamp the declared purchase consideration and the value adopted by the stamp valuation authority." valuation authority." 3. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in ignoring the fact that the assessee did not file any appeal or objection erred in ignoring the fact that the assessee did not file any appeal or objection erred in ignoring the fact that the assessee did not file any appeal or objection against the valuation adopted by the Sub against the valuation adopted by the Sub-Registrar, thereby accepting the said Registrar, thereby accepting the said valuation, which represents the fair market value determined by a statutory represents the fair market value determined by a statutory represents the fair market value determined by a statutory authority." 4. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) 4. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) 4. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in law in holding that the deeming provisions of section 50C cannot be erred in law in holding that the deeming provisions of section 50C cannot be erred in law in holding that the deeming provisions of section 50C cannot be relied upon for the purpose relied upon for the purpose of section 69B, without appreciating that the valuation of section 69B, without appreciating that the valuation adopted by the stamp duty authority constitutes adopted by the stamp duty authority constitutes a strong corroborative strong corroborative circumstance indicating und circumstance indicating understatement of consideration." 5. "The appellant craves leave to add, amend, alter, modify or withdraw any of 5. "The appellant craves leave to add, amend, alter, modify or 5. "The appellant craves leave to add, amend, alter, modify or the above grounds of appeal at the time of hearing." the above grounds of appeal at the time of hearing." 2. Briefly stated, the facts borne out from the record are that the Briefly stated, the facts borne out from the record are that the Briefly stated, the facts borne out from the record are that the assessee filed its return of income on 7 assessee filed its return of income on 7th November 2017 declaring November 2017 declaring total income of Rs.2,13,49,970/ income of Rs.2,13,49,970/-. The return of income was selected ome was selected for scrutiny and statutory notices under the Act were issued and for scrutiny and statutory notices under the Act were issued and for scrutiny and statutory notices under the Act were issued and

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complied with. During the course of assessment proceedings, the complied with. During the course of assessment proceedings, the complied with. During the course of assessment proceedings, the Assessing Officer received information from the Dy. Commissioner Assessing Officer received information from the Dy. Commissioner Assessing Officer received information from the Dy. Commissioner of Income-tax, Central Circle, Pune, that the tax, Central Circle, Pune, that the assessee had purchased an immovable property from M/s Kakade Developers purchased an immovable property from M/s Kakade Developers purchased an immovable property from M/s Kakade Developers Pvt. Ltd. vide registered deed dated 07.05.2016 for a stated Pvt. Ltd. vide registered deed dated 07.05.2016 for a stated Pvt. Ltd. vide registered deed dated 07.05.2016 for a stated consideration of Rs.6,50,00,000/ consideration of Rs.6,50,00,000/-, whereas the stamp duty , whereas the stamp duty valuation adopted by the Sub valuation adopted by the Sub-Registrar stood at Rs.8,85,52,358/ Registrar stood at Rs.8,85,52,358/-. The Assessing Officer, therefore, called upon the assessee to explain The Assessing Officer, therefore, called upon the assessee to explain The Assessing Officer, therefore, called upon the assessee to explain as to why the differential amount of Rs.2,35,52,358/- should not be as to why the differential amount of Rs.2,35,52,358/ as to why the differential amount of Rs.2,35,52,358/ added as income and the Assessing Officer also asked source of added as income and the Assessing Officer also asked source of added as income and the Assessing Officer also asked source of said amount 2.1 In response, the assessee contended t In response, the assessee contended that during the relevant hat during the relevant assessment year, the provisions of Section 56(2)(vii) of the Act were assessment year, the provisions of Section 56(2)(vii) of the Act were assessment year, the provisions of Section 56(2)(vii) of the Act were applicable only to individuals and Hindu Undivided Families and applicable only to individuals and Hindu Undivided Families and applicable only to individuals and Hindu Undivided Families and not to companies. It was submitted that the amendment enlarging not to companies. It was submitted that the amendment enlarging not to companies. It was submitted that the amendment enlarging the scope of the provision to incl the scope of the provision to include companies was introduced only ude companies was introduced only with effect from Assessment Year 2018 with effect from Assessment Year 2018-19 by insertion of Section 19 by insertion of Section 56(2)(x), and therefore no addition could legally be made in the 56(2)(x), and therefore no addition could legally be made in the 56(2)(x), and therefore no addition could legally be made in the hands of the assessee hands of the assessee-company for the year under consideration company for the year under consideration merely on account of variatio merely on account of variation between the declared consideration n between the declared consideration and the stamp duty value and the stamp duty value 2.2 The Assessing Officer, however, rejected the explanation The Assessing Officer, however, rejected the explanation The Assessing Officer, however, rejected the explanation furnished by the assessee and proceeded to invoke the provisions of furnished by the assessee and proceeded to invoke the provisions of furnished by the assessee and proceeded to invoke the provisions of

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Section 69B of the Act on the premise that the assessee had not Section 69B of the Act on the premise that the assessee had not Section 69B of the Act on the premise that the assessee had not challenged the valuation adopted by the stamp valuation authority hallenged the valuation adopted by the stamp valuation authority hallenged the valuation adopted by the stamp valuation authority and, therefore, such valuation had attained finality and represented and, therefore, such valuation had attained finality and represented and, therefore, such valuation had attained finality and represented the true market value of the property. Proceeding on the said the true market value of the property. Proceeding on the said the true market value of the property. Proceeding on the said assumption, the Assessing Officer held that the assessee had assumption, the Assessing Officer held that the assessee had assumption, the Assessing Officer held that the assessee had invested an amount in excess of what was recorded in its books of invested an amount in excess of what was recorded in its books of invested an amount in excess of what was recorded in its books of account and consequently treated the differential amount of account and consequently treated the differential amount of account and consequently treated the differential amount of Rs.2,35,52,358/- as unexplained investment under Section 69B of as unexplained investment under Section 69B of as unexplained investment under Section 69B of the Act as the assessee failed to offer an explaination about the the Act as the assessee failed to offer an explaination about the the Act as the assessee failed to offer an explaination about the source of such differential amount source of such differential amount 3. On appeal, the Ld. CIT(A), after exhaustive examination of the On appeal, the Ld. CIT(A), after exhaustive examination of the On appeal, the Ld. CIT(A), after exhaustive examination of the statutory provisions as well as the judicial precedents governing the statutory provisions as well as the judicial precedents governing the statutory provisions as well as the judicial precedents governing the issue, deleted the addition by holding that no addition under issue, deleted the addition by holding that no addition under issue, deleted the addition by holding that no addition under Section 69B could be s Section 69B could be sustained merely on the basis of stamp duty ustained merely on the basis of stamp duty valuation in the absence of any independent evidence establishing valuation in the absence of any independent evidence establishing valuation in the absence of any independent evidence establishing payment of consideration over and above the amount disclosed in payment of consideration over and above the amount disclosed in payment of consideration over and above the amount disclosed in the registered document. The Ld. CIT(A) further held that the the registered document. The Ld. CIT(A) further held that the the registered document. The Ld. CIT(A) further held that the deeming deeming fiction fiction contained conta ined in in Section Section 50C 50C is is confined confined to to computation of capital gains in the hands of the seller and cannot computation of capital gains in the hands of the seller and cannot computation of capital gains in the hands of the seller and cannot be extended to infer unexplained investment in the hands of the be extended to infer unexplained investment in the hands of the be extended to infer unexplained investment in the hands of the purchaser. The relevant finding of the ld CIT(A) is reproduced as purchaser. The relevant finding of the ld CIT(A) is reproduced as purchaser. The relevant finding of the ld CIT(A) is reproduced as under: “6.2.2 While m While making the addition of Rs. 2,35,52,358/ aking the addition of Rs. 2,35,52,358/- u/s 69B on account of alleged unexplained investment in purchase of property, AO account of alleged unexplained investment in purchase of property, AO account of alleged unexplained investment in purchase of property, AO

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made the following observation in the assessment order dated made the following observation in the assessment order dated made the following observation in the assessment order dated 30.12.2019: “4.8 The submission filed by the assessee is duly considered and is not The submission filed by the assessee is duly considered a The submission filed by the assessee is duly considered a found acceptable. found acceptable. 4.9 The assessee had purchased property from M/s Kakade Developes The assessee had purchased property from M/s Kakade Developes The assessee had purchased property from M/s Kakade Developes P. Ltd and the agreement of the property was made for Rs. 6,50,00,000. P. Ltd and the agreement of the property was made for Rs. 6,50,00,000. P. Ltd and the agreement of the property was made for Rs. 6,50,00,000. The said agreement was registered with sub Registrar at a market price of The said agreement was registered with sub Registrar at a market price of The said agreement was registered with sub Registrar at a market price of Rs. 8,85,52,358. Rs. 8,85,52,358. The Income Tax Act recognized valuation <?arried out by The Income Tax Act recognized valuation <?arried out by the Sub-Registrar for the purpose of levy of stamp duty as authentic and Registrar for the purpose of levy of stamp duty as authentic and Registrar for the purpose of levy of stamp duty as authentic and as provided u/s 50C if the registration is carried out at a price higher than as provided u/s 50C if the registration is carried out at a price higher than as provided u/s 50C if the registration is carried out at a price higher than the agreement value the capital gain is to be wor the agreement value the capital gain is to be wor the agreement value the capital gain is to be worked out as per the valuation determined by Sub valuation determined by Sub-Registrar for Stamp duty purpose. Thus the Registrar for Stamp duty purpose. Thus the valuation carried out by Sub valuation carried out by Sub-Registrar is the authentic valuation which is Registrar is the authentic valuation which is recognized by the Income Tax Act. recognized by the Income Tax Act.

4.10 The sub registrar is the authority where agreement The sub registrar is the authority where agreement are registered The sub registrar is the authority where agreement on day to day basis and it is the authority which has first hand valuation on day to day basis and it is the authority which has first hand valuation on day to day basis and it is the authority which has first hand valuation criteria as compared to other valuation authorities and therefore the criteria as compared to other valuation authorities and therefore the criteria as compared to other valuation authorities and therefore the valuation carried out by Sub Registrar for the purpose of levy of stamp valuation carried out by Sub Registrar for the purpose of levy of stamp valuation carried out by Sub Registrar for the purpose of levy of stamp duty is far more authen duty is far more authentic than any other valuation, and it shows real tic than any other valuation, and it shows real estimate of the market value of the property. estimate of the market value of the property. There is also a provision that if person do not agree with the There is also a provision that if person do not agree with the There is also a provision that if person do not agree with the valuation done by Sub valuation done by Sub-Registrar he can file appeal against the valuation. If Registrar he can file appeal against the valuation. If no appeal is filed aga no appeal is filed against valuation it is presumed that buyers and seller inst valuation it is presumed that buyers and seller have accepted the valuation and in that case, it is binding on them. The have accepted the valuation and in that case, it is binding on them. The have accepted the valuation and in that case, it is binding on them. The assessee assessee assessee was was was asked asked asked to to to explain explain explain whether whether whether it it it had had had file file file any any any representation/appeal against the above referred valuation. The assessee representation/appeal against the above referred valuation. The assessee representation/appeal against the above referred valuation. The assessee has not submitted anything to show that any appeal or representation was not submitted anything to show that any appeal or representation was not submitted anything to show that any appeal or representation was filed against this valuation. This means that valuation of Rs. 8,85,52,358 filed against this valuation. This means that valuation of Rs. 8,85,52,358 filed against this valuation. This means that valuation of Rs. 8,85,52,358 carried out was final and was binding on both buyer and seller. carried out was final and was binding on both buyer and seller. carried out was final and was binding on both buyer and seller. 4.11 Thus assessee has carried out agreement fo Thus assessee has carried out agreement for purchase of property r purchase of property at Rs. 6,50,00,000 which is registered at Rs. 8,85,52,358 which means at Rs. 6,50,00,000 which is registered at Rs. 8,85,52,358 which means at Rs. 6,50,00,000 which is registered at Rs. 8,85,52,358 which means that assessee has shown less consideration paid for purchase of property that assessee has shown less consideration paid for purchase of property that assessee has shown less consideration paid for purchase of property as compared to its market rate. Since investment/purchase price paid is as compared to its market rate. Since investment/purchase price paid is as compared to its market rate. Since investment/purchase price paid is not fully reflecte not fully reflected in books provisions of Sec. 698 are attracted. Section d in books provisions of Sec. 698 are attracted. Section 698 provide that where in the financial year assessee has made 698 provide that where in the financial year assessee has made 698 provide that where in the financial year assessee has made investment and amount spend in investment exceeds the amount recorded investment and amount spend in investment exceeds the amount recorded investment and amount spend in investment exceeds the amount recorded in books and assessee offers no explanation about the excess amoun in books and assessee offers no explanation about the excess amoun in books and assessee offers no explanation about the excess amount, the excess amount is to be treated as deemed income u/s 698 of the I. T Act excess amount is to be treated as deemed income u/s 698 of the I. T Act excess amount is to be treated as deemed income u/s 698 of the I. T Act for that year.

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4.12 The assessee has not offered any explanation about the source of The assessee has not offered any explanation about the source of The assessee has not offered any explanation about the source of differential amount. The assessee has not been able to prove how differential amount. The assessee has not been able to prove how differential amount. The assessee has not been able to prove how valuation of Rs. 8,85,52,35 valuation of Rs. 8,85,52,358 is not correct. No evidence is submitted by 8 is not correct. No evidence is submitted by assessee to prove that valuation is not correct. assessee to prove that valuation is not correct. 4.13 Provision of section 69B of the IT Act are therefore invoked as the Provision of section 69B of the IT Act are therefore invoked as the Provision of section 69B of the IT Act are therefore invoked as the assessee has made the investment of Rs. 8,85,52,358 which is in excess assessee has made the investment of Rs. 8,85,52,358 which is in excess assessee has made the investment of Rs. 8,85,52,358 which is in excess investment recor investment recorded in books of Rs. 6,50,00,000. The difference of Rs. ded in books of Rs. 6,50,00,000. The difference of Rs. 2,35,52,358 is therefore treated as deemed income of assessee as 2,35,52,358 is therefore treated as deemed income of assessee as 2,35,52,358 is therefore treated as deemed income of assessee as provided u/s 69 B of the IT Act and the same is accordingly added in the provided u/s 69 B of the IT Act and the same is accordingly added in the provided u/s 69 B of the IT Act and the same is accordingly added in the income of the assessee." income of the assessee." 6.2.3 I have carefully perused the as I have carefully perused the assessment order, the written submissions of sessment order, the written submissions of the appellant, the documents placed on record, and the statutory provisions the appellant, the documents placed on record, and the statutory provisions the appellant, the documents placed on record, and the statutory provisions governing the issue. The addition has been made on the premise that the governing the issue. The addition has been made on the premise that the governing the issue. The addition has been made on the premise that the difference between the agreement value of the property purchased by the difference between the agreement value of the property purchased difference between the agreement value of the property purchased appellant (Rs.6,50,00,000/ appellant (Rs.6,50,00,000/-) and the stamp duty valuation adopted by the Sub ) and the stamp duty valuation adopted by the Sub- Registrar (Rs.8,85,52,358/ Registrar (Rs.8,85,52,358/-) represents unexplained investment within the ) represents unexplained investment within the meaning of section 69B of the Income meaning of section 69B of the Income-tax Act, 1961. The short question for The short question for determination is whethe determination is whether, in absence of any evidence of actual payment r, in absence of any evidence of actual payment of extra consideration, the mere difference between the declared of extra consideration, the mere difference between the declared of extra consideration, the mere difference between the declared consideration and the stamp duty valuation can lead to an inference of consideration and the stamp duty valuation can lead to an inference of consideration and the stamp duty valuation can lead to an inference of undisclosed investment under section 69B. undisclosed investment under section 69B. For sake of reference, section For sake of reference, section 69B is reproduced as under: is reproduced as under: "[Amount of investments, etc., not fully disclosed in books of "[Amount of investments, etc., not fully disclosed in books of "[Amount of investments, etc., not fully disclosed in books of account. 69B. Where in any financial year the assessee has made 69B. Where in any financial year the assessee has made 69B. Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or investments or is found to be the owner of any bullion, jewellery or investments or is found to be the owner of any bullion, jewellery or other valuable article, and the other valuable article, and the [Assessing] Officer finds that the [Assessing] Officer finds that the amount expended on making such investments or in acquiring such amount expended on making such investments or in acquiring such amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount bullion, jewellery or other valuable article exceeds the amount bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the recorded in this behalf in the books of account maintained by the recorded in this behalf in the books of account maintained by the assessee for any source of assessee for any source of income, and the assessee offers no income, and the assessee offers no explanation about such excess amount or the explanation offered explanation about such excess amount or the explanation offered explanation about such excess amount or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, by him is not, in the opinion of the [Assessing] Officer, satisfactory, by him is not, in the opinion of the [Assessing] Officer, satisfactory, the excess amount may be deemed to be the income of the assessee the excess amount may be deemed to be the income of the assessee the excess amount may be deemed to be the income of the assessee for such financial for such financial year.]" 6.2.4 Section 69B requires that the Assessing Officer must first "find", on the Section 69B requires that the Assessing Officer must first "find", on the Section 69B requires that the Assessing Officer must first "find", on the basis of cogent, credible and tangible material, that the assessee has actually basis of cogent, credible and tangible material, that the assessee has actually basis of cogent, credible and tangible material, that the assessee has actually invested an amount in excess of what is recorded in the books of account. This invested an amount in excess of what is recorded in the books of account. This invested an amount in excess of what is recorded in the books of account. This statutory precondition of a positive "finding" based on evidence is mandatory. In y precondition of a positive "finding" based on evidence is mandatory. In y precondition of a positive "finding" based on evidence is mandatory. In the present case, no document, statement, seized material, third-party the present case, no document, statement, seized material, third the present case, no document, statement, seized material, third confirmation, or even circumstantial evidence has been brought on record to confirmation, or even circumstantial evidence has been brought on record to confirmation, or even circumstantial evidence has been brought on record to demonstrate that any amount over an demonstrate that any amount over and above Rs.6.50 crore was paid by the d above Rs.6.50 crore was paid by the

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appellant to the seller. The Assessing Officer has not made any enquiry from the appellant to the seller. The Assessing Officer has not made any enquiry from the appellant to the seller. The Assessing Officer has not made any enquiry from the seller, has not examined the parties to the transaction, and has not referred the seller, has not examined the parties to the transaction, and has not referred the seller, has not examined the parties to the transaction, and has not referred the matter to a valuation officer. The addition is thus fou matter to a valuation officer. The addition is thus founded solely on the stamp nded solely on the stamp duty value, which by itself does not constitute evidence of actual payment. In duty value, which by itself does not constitute evidence of actual payment. In duty value, which by itself does not constitute evidence of actual payment. In absence of such evidence, the foundational requirement for invoking section 69B absence of such evidence, the foundational requirement for invoking section 69B absence of such evidence, the foundational requirement for invoking section 69B remains unfulfilled. 6.2.5 The legal position in this regard is well se The legal position in this regard is well settled. The Hon'ble Supreme Court ttled. The Hon'ble Supreme Court in K.P. Varghese v. ITO (131 ITR 597) held that an addition based merely on in K.P. Varghese v. ITO (131 ITR 597) held that an addition based merely on in K.P. Varghese v. ITO (131 ITR 597) held that an addition based merely on notional or estimated value, without proof of understatement of consideration, is notional or estimated value, without proof of understatement of consideration, is notional or estimated value, without proof of understatement of consideration, is impermissible. The Hon'ble Rajasthan High Court in CIT v. Bhanwarlal impermissible. The Hon'ble Rajasthan High Court in CIT v. Bhanwar impermissible. The Hon'ble Rajasthan High Court in CIT v. Bhanwar Murwatiya (215 CTR 489) reiterated that no addition under section 69B can be Murwatiya (215 CTR 489) reiterated that no addition under section 69B can be Murwatiya (215 CTR 489) reiterated that no addition under section 69B can be made merely because the valuation adopted for stamp duty purposes is higher; made merely because the valuation adopted for stamp duty purposes is higher; made merely because the valuation adopted for stamp duty purposes is higher; the Revenue must first prove that extra consideration has in fact passed. The the Revenue must first prove that extra consideration has in fact passed. The the Revenue must first prove that extra consideration has in fact passed. The ITAT in several decisions, including the Ahmedabad Bench, has also held that the sions, including the Ahmedabad Bench, has also held that the sions, including the Ahmedabad Bench, has also held that the stamp duty valuation cannot be imported into section 69B in the absence of stamp duty valuation cannot be imported into section 69B in the absence of stamp duty valuation cannot be imported into section 69B in the absence of independent evidence of unaccounted investment. independent evidence of unaccounted investment. 6.2.6 The Assessing Officer's approach is also contrary to the statutor The Assessing Officer's approach is also contrary to the statutor The Assessing Officer's approach is also contrary to the statutory scheme governing valuation. Section 50C creates a deeming fiction whereby the stamp governing valuation. Section 50C creates a deeming fiction whereby the stamp governing valuation. Section 50C creates a deeming fiction whereby the stamp duty value is substituted for the sale consideration only for purposes of duty value is substituted for the sale consideration only for purposes of duty value is substituted for the sale consideration only for purposes of computing capital gains in the hands of the seller. This legal fiction is specific and computing capital gains in the hands of the seller. This legal fiction is specific and computing capital gains in the hands of the seller. This legal fiction is specific and cannot be extended to a purchaser to infer extra consideration under section 69B. extended to a purchaser to infer extra consideration under section 69B. extended to a purchaser to infer extra consideration under section 69B. A deeming provision must operate strictly within the limits for which it was A deeming provision must operate strictly within the limits for which it was A deeming provision must operate strictly within the limits for which it was enacted, as held in Mother India Refrigeration Pvt. Ltd. (155 ITR 711). The AO's enacted, as held in Mother India Refrigeration Pvt. Ltd. (155 ITR 711). The AO's enacted, as held in Mother India Refrigeration Pvt. Ltd. (155 ITR 711). The AO's attempt to treat the stam attempt to treat the stamp duty valuation as the "real" value for the purchaser is p duty valuation as the "real" value for the purchaser is therefore legally untenable. therefore legally untenable. 6.2.7 It is further relevant to highlight that prior to AY 2018 It is further relevant to highlight that prior to AY 2018 It is further relevant to highlight that prior to AY 2018-19, the statute did not contain any provision enabling taxation of the difference between the not contain any provision enabling taxation of the difference between the not contain any provision enabling taxation of the difference between the agreement value and the stamp duty valuation in the hands of a purchaser other value and the stamp duty valuation in the hands of a purchaser other value and the stamp duty valuation in the hands of a purchaser other than an individual or HUF. The only provision then in force-section 56(2)(vii)(b)- than an individual or HUF. The only provision then in force than an individual or HUF. The only provision then in force applied exclusively to individuals and HUFs, and only where immovable property applied exclusively to individuals and HUFs, and only where immovable property applied exclusively to individuals and HUFs, and only where immovable property was received without consi was received without consideration or for inadequate consideration. The deration or for inadequate consideration. The appellant, however, is a company, and therefore section 56(2)(vii)(b) had no appellant, however, is a company, and therefore section 56(2)(vii)(b) had no appellant, however, is a company, and therefore section 56(2)(vii)(b) had no application whatsoever to it for AY 2017 application whatsoever to it for AY 2017-18. 6.2.8 With effect from 01.04.2017 (i.e., AY 2018 With effect from 01.04.2017 (i.e., AY 2018-19), the legislature consciously 19), the legislature consciously expanded the anti- -abuse framework by introducing section 56(2)(x), which abuse framework by introducing section 56(2)(x), which replaced the phrase "individual or HUF" with the broader expression "any replaced the phrase "individual or HUF" with the broader expression "any replaced the phrase "individual or HUF" with the broader expression "any person", thereby extending the scope of the provision to companies, firms, AOPs, person", thereby extending the scope of the provision to companies, firms, AOPs, person", thereby extending the scope of the provision to companies, firms, AOPs, BOIs, and all other entities. The BOIs, and all other entities. The very fact that Parliament found it necessary to very fact that Parliament found it necessary to widen the section prospectively demonstrates that prior to AY 2018-19, such a widen the section prospectively demonstrates that prior to AY 2018 widen the section prospectively demonstrates that prior to AY 2018 difference could not be taxed in the hands of a company difference could not be taxed in the hands of a company-purchaser unless the purchaser unless the Assessing Officer proved payment of actual extra cons Assessing Officer proved payment of actual extra consideration ideration-something that the AO has not established in the present case. the AO has not established in the present case.

Yellow Banana Food 8 Company Private Limited, ITA No. 1472/MUM/2026

6.2.9 The reliance by the AO on the fact that the appellant did not contest the The reliance by the AO on the fact that the appellant did not contest the The reliance by the AO on the fact that the appellant did not contest the stamp duty valuation is also misplaced. The decision not to contest such stamp duty valuation is also misplaced. The decision not to contest such stamp duty valuation is also misplaced. The decision not to contest such valuation is a commercial cho valuation is a commercial choice and cannot be construed as proof of ice and cannot be construed as proof of understatement of consideration. The Income understatement of consideration. The Income-tax Act does not mandate or tax Act does not mandate or presume adverse inference from not filing a valuation appeal, and therefore such presume adverse inference from not filing a valuation appeal, and therefore such presume adverse inference from not filing a valuation appeal, and therefore such reasoning cannot justify addition under section 69B. reasoning cannot justify addition under section 69B. 6.2.10 In view of the above discussion, it is evident that: view of the above discussion, it is evident that: view of the above discussion, it is evident that: (i) the AO has not brought any evidence to show that any amount over and above (i) the AO has not brought any evidence to show that any amount over and above (i) the AO has not brought any evidence to show that any amount over and above the recorded consideration was paid; the recorded consideration was paid; (ii) the statutory requirement of a "finding" under section 69B is not satisfied; (ii) the statutory requirement of a "finding" under section 69B is not satisfied; (ii) the statutory requirement of a "finding" under section 69B is not satisfied; (iii) the addition is based solely on a deeming fiction under section 50C which is he addition is based solely on a deeming fiction under section 50C which is he addition is based solely on a deeming fiction under section 50C which is inapplicable to purchasers; and inapplicable to purchasers; and (iv) the provisions of section 56(2)(vii)(b) or the subsequently introduced section (iv) the provisions of section 56(2)(vii)(b) or the subsequently introduced section (iv) the provisions of section 56(2)(vii)(b) or the subsequently introduced section 56(2)(x) do not assist the Revenue for the year under consideration. 56(2)(x) do not assist the Revenue for the year under considerat 56(2)(x) do not assist the Revenue for the year under considerat Accordingly, the addition of Rs.2,35,52,358/ Accordingly, the addition of Rs.2,35,52,358/- made under section 69B merely on made under section 69B merely on account of higher stamp duty valuation, without any independent evidence of account of higher stamp duty valuation, without any independent evidence of account of higher stamp duty valuation, without any independent evidence of excess consideration, is unsustainable in law. The same is directed to be deleted. excess consideration, is unsustainable in law. The same is directed to be deleted. excess consideration, is unsustainable in law. The same is directed to be deleted. Therefore, Grounds No. 2 to 5 of the appeal are allowed ounds No. 2 to 5 of the appeal are allowed ounds No. 2 to 5 of the appeal are allowed.”

4.1 In our considered opinion, the issue is no longer r In our considered opinion, the issue is no longer r In our considered opinion, the issue is no longer res integra. Section 69B postulates existence of a positive finding by the Section 69B postulates existence of a positive finding by the Section 69B postulates existence of a positive finding by the Assessing Officer, based on cogent and credible material, that the Assessing Officer, based on cogent and credible material, that the Assessing Officer, based on cogent and credible material, that the

Yellow Banana Food 9 Company Private Limited, ITA No. 1472/MUM/2026

assessee had in fact expended an amount in excess of what is assessee had in fact expended an amount in excess of what is assessee had in fact expended an amount in excess of what is recorded in the books of account. The sine qua non for invoking the recorded in the books of account. The sine qua non for recorded in the books of account. The sine qua non for said provision is the existence of evidence demonstrating actual said provision is the existence of evidence demonstrating actual said provision is the existence of evidence demonstrating actual investment beyond the disclosed consideration. Mere suspicion, investment beyond the disclosed consideration. Mere suspicion, investment beyond the disclosed consideration. Mere suspicion, conjecture, or reliance upon a notional valuation cannot substitute conjecture, or reliance upon a notional valuation cannot substitute conjecture, or reliance upon a notional valuation cannot substitute the statutory requirement of proof. the statutory requirement of proof. 4.2 In the present case, except for the higher valuation adopted by present case, except for the higher valuation adopted by present case, except for the higher valuation adopted by the stamp duty authority, there is absolutely no material brought the stamp duty authority, there is absolutely no material brought the stamp duty authority, there is absolutely no material brought on record by the Revenue to establish that the assessee had paid on record by the Revenue to establish that the assessee had paid on record by the Revenue to establish that the assessee had paid any amount over and above the stated consideration of Rs.6.50 any amount over and above the stated consideration of Rs.6.50 any amount over and above the stated consideration of Rs.6.50 crore. No statement of the seller has been recorded; no . No statement of the seller has been recorded; no . No statement of the seller has been recorded; no incriminating material has been unearthed; no enquiry has been incriminating material has been unearthed; no enquiry has been incriminating material has been unearthed; no enquiry has been conducted to demonstrate flow of unaccounted money; nor has any conducted to demonstrate flow of unaccounted money; nor has any conducted to demonstrate flow of unaccounted money; nor has any evidence, direct or circumstantial, been brought on record to evidence, direct or circumstantial, been brought on record to evidence, direct or circumstantial, been brought on record to indicate understatement of consideration. The entire addition rests atement of consideration. The entire addition rests atement of consideration. The entire addition rests solely upon the stamp duty valuation, which, in law, cannot by solely upon the stamp duty valuation, which, in law, cannot by solely upon the stamp duty valuation, which, in law, cannot by itself constitute evidence of unexplained investment. itself constitute evidence of unexplained investment. itself constitute evidence of unexplained investment. 4.3 It is equally well settled that the deeming fiction embodied in It is equally well settled that the deeming fiction embodied in It is equally well settled that the deeming fiction embodied in Section 50C of the Act is restricted to determination of full value of Act is restricted to determination of full value of Act is restricted to determination of full value of consideration for the purpose of computation of capital gains in the consideration for the purpose of computation of capital gains in the consideration for the purpose of computation of capital gains in the hands of the transferor and cannot be imported into Section 69B so hands of the transferor and cannot be imported into Section 69B so hands of the transferor and cannot be imported into Section 69B so as to create a presumption of undisclosed investment in the hands as to create a presumption of undisclosed investment in the hands as to create a presumption of undisclosed investment in the hands of the purchaser. A legal fiction must be confined strictly to the f the purchaser. A legal fiction must be confined strictly to the f the purchaser. A legal fiction must be confined strictly to the

Yellow Banana Food 10 Company Private Limited, ITA No. 1472/MUM/2026

purpose for which it has been enacted and cannot be extended by purpose for which it has been enacted and cannot be extended by purpose for which it has been enacted and cannot be extended by implication beyond its legitimate field of operation. implication beyond its legitimate field of operation.

4.4 We also find substantial force in the reasoning adopted by the We also find substantial force in the reasoning adopted by the We also find substantial force in the reasoning adopted by the Ld. CIT(A) that, during the relevant assessment year, there existed CIT(A) that, during the relevant assessment year, there existed CIT(A) that, during the relevant assessment year, there existed no statutory provision enabling taxation of such differential amount no statutory provision enabling taxation of such differential amount no statutory provision enabling taxation of such differential amount in the hands of a company in the hands of a company-purchaser. The provisions of Section purchaser. The provisions of Section 56(2)(vii), as applicable at the relevant time, were confined only to 56(2)(vii), as applicable at the relevant time, were confine 56(2)(vii), as applicable at the relevant time, were confine individuals and HUFs. The legislature, by subsequently introducing individuals and HUFs. The legislature, by subsequently introducing individuals and HUFs. The legislature, by subsequently introducing Section 56(2)(x) with effect from Assessment Year 2018-19, Section 56(2)(x) with effect from Assessment Year 2018 Section 56(2)(x) with effect from Assessment Year 2018 consciously expanded the scope of the provision to include “any consciously expanded the scope of the provision to include “any consciously expanded the scope of the provision to include “any person”. The very fact that the amendment was made prospective in person”. The very fact that the amendment was made prosp person”. The very fact that the amendment was made prosp operation clearly demonstrates that no such addition could have operation clearly demonstrates that no such addition could have operation clearly demonstrates that no such addition could have been sustained in the hands of a company for the year under been sustained in the hands of a company for the year under been sustained in the hands of a company for the year under consideration in absence of independent evidence of extra consideration in absence of independent evidence of extra consideration in absence of independent evidence of extra consideration having actually passed. consideration having actually passed.

4.5 The reasoning adopted The reasoning adopted by the Assessing Officer that the by the Assessing Officer that the assessee’s failure to challenge the stamp duty valuation amounts to assessee’s failure to challenge the stamp duty valuation amounts to assessee’s failure to challenge the stamp duty valuation amounts to acceptance of actual market value is also misconceived and legally acceptance of actual market value is also misconceived and legally acceptance of actual market value is also misconceived and legally untenable. Non-filing of objection before the stamp valuation filing of objection before the stamp valuation filing of objection before the stamp valuation authority cannot, by any authority cannot, by any stretch of reasoning, be construed as stretch of reasoning, be construed as conclusive proof of payment of on conclusive proof of payment of on-money or understatement of money or understatement of consideration.

Yellow Banana Food 11 Company Private Limited, ITA No. 1472/MUM/2026

4.6 In view of the foregoing discussion, we are of the considered In view of the foregoing discussion, we are of the considered In view of the foregoing discussion, we are of the considered opinion that the Ld. CIT(A) has rightly appreciated both the factual opinion that the Ld. CIT(A) has rightly appreciated both the factual opinion that the Ld. CIT(A) has rightly appreciated both the factual matrix and the legal position governing the controversy. We find no x and the legal position governing the controversy. We find no x and the legal position governing the controversy. We find no perversity perversity perversity or or or infirmity infirmity infirmity in in in the the the impugned impugned impugned order order order warranting warranting warranting interference by this Tribunal. Accordingly, the order of the Ld. interference by this Tribunal. Accordingly, the order of the Ld. interference by this Tribunal. Accordingly, the order of the Ld. CIT(A) deleting the addition of Rs.2,35,52,358/- made under CIT(A) deleting the addition of Rs.2,35,52,358/ CIT(A) deleting the addition of Rs.2,35,52,358/ Section 69B of the Act is upheld and the grounds raised by the of the Act is upheld and the grounds raised by the of the Act is upheld and the grounds raised by the Revenue stand dismissed. Revenue stand dismissed.

Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai