L7 MEDIA PRIVATE LIMITED,NAGPUR vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 6(4), MUMBAI

Before us, both the parties agreed that appeal the parties agreed that appeal in the case of in the case of L7 Media Private Limited Media Private Limited and cross appeal of the Revenue of the Revenue, for

In the assessment completed under section 143(3), the Assessing In the assessment completed under section 143(3), the Assessing In the assessment completed under section 143(3), the Assessing alia, an addition of ₹1,03,55,330/ Officer made, inter-alia 1,03,55,330/- under section 69A, treating the same as cash received back from builders in the same as cash received back from builders in the same as cash received back from builders in the course of alleged builder course of alleged builder-financing activity; an addition of financing activity; an addition of ₹77,24,169/- towards undisclosed interest income; and an addition towards undisclosed interest income; and an addition towards undisclosed interest income; and an addition

Before us, the learned counsel for the assessee placed on record Before us, the learned counsel for the assessee placed on record Before us, the learned counsel for the assessee placed on record Paper Book-I, comprising pages 1 to 269, and Paper Book I, comprising pages 1 to 269, and Paper Book-II, I, comprising pages 1 to 269, and Paper Book comprising pages 1 to 458. comprising pages 1 to 458.

We shall first take up Ground No. 1 of the assessee’s appeal We shall first take up Ground No. 1 of the assessee’s appeal We shall first take up Ground No. 1 of the assessee’s appeal together with Ground No. 1 of the Revenue’s appeal, as both arise together with Ground No. 1 of the Revenue’s appeal, as both arise together with Ground No. 1 of the Revenue’s appeal, as both arise from the same set of facts and concern the from the same set of facts and concern the additions made in additions made in respect of the alleged builder respect of the alleged builder-financing transactions. financing transactions.

The material facts relevant to the controversy are that, during the The material facts relevant to the controversy are that, during the The material facts relevant to the controversy are that, during the course of search and seizure proceedings conducted on 10.05.2023 course of search and seizure proceedings conducted on 10.05.2023 course of search and seizure proceedings conducted on 10.05.2023 in the case of Shri Ravi Omprakash Agarwal and connected in the case of Shri Ravi Omprakash Agarwal an in the case of Shri Ravi Omprakash Agarwal an persons/entities, certain documents, electronic records, Excel persons/entities, certain documents, electronic records, Excel persons/entities, certain documents, electronic records, Excel sheets and WhatsApp communications were found and seized. After sheets and WhatsApp communications were found and seized. sheets and WhatsApp communications were found and seized. considering the explanation furnished by the assessee, the learned considering the explanation furnished by the assessee, the learned considering the explanation furnished by the assessee, the learned Assessing Officer, having regard to the material f Assessing Officer, having regard to the material found and seized ound and seized during the course of search and the statements recorded in the during the course of search and the statements recorded in the during the course of search and the statements recorded in the course thereof, was of the view that the transactions shown as course thereof, was of the view that the transactions shown as course thereof, was of the view that the transactions shown as purchase of properties were, in substance, arrangements for purchase of properties were, in substance, arrangements for purchase of properties were, in substance, arrangements for financing builders. According to the Assessing Officer, the seized financing builders. According to the Assessing Officer financing builders. According to the Assessing Officer loose sheets, electronic records, Excel sheets and WhatsApp loose sheets, electronic records, Excel sheets and WhatsApp loose sheets, electronic records, Excel sheets and WhatsApp

The Assessing Officer further recorded that, according to the modus The Assessing Officer further recorded that, according to the modus The Assessing Officer further recorded that, according to the modus operandi emerging from the seized material, where the finance operandi emerging from the seized material, where the finance operandi emerging from the seized material, where the finance amount was lower than the agreement or circle value of the amount was lower than the agreement or circle value of the amount was lower than the agreement or circle value of the property, the lender would remit the higher amount through property, the lender would remit the higher amount through property, the lender would remit the higher amount through banking channels and the differential would allegedly be received channels and the differential would allegedly be received channels and the differential would allegedly be received back in cash from the builder. Conversely, where the finance back in cash from the builder. Conversely, where the finance back in cash from the builder. Conversely, where the finance amount exceeded the agreement value, the differential was stated to amount exceeded the agreement value, the differential was stated to amount exceeded the agreement value, the differential was stated to be paid in cash along with the banking be paid in cash along with the banking-channel payment. The channel payment. The electronic records were also stated to contain particulars of the c records were also stated to contain particulars of the c records were also stated to contain particulars of the properties, purchase consideration, financing amount, rate of properties, purchase consideration, financing amount, rate of properties, purchase consideration, financing amount, rate of interest and interest accrued thereon. interest and interest accrued thereon.

The Assessing Officer further observed that the seized electronic The Assessing Officer further observed that the seized electronic The Assessing Officer further observed that the seized electronic records records contained contained particulars particulars of of the the properties, properties, purchase purchase consideration, financing amount, rate of interest and interest consideration, financing amount, rate of interest and interest consideration, financing amount, rate of interest and interest accrued thereon. According to him, these particulars, read with the accrued thereon. According to him, these particulars, read with the accrued thereon. According to him, these particulars, read with the

Coming to the case specifics, the details of finance amount of Coming to the case specifics, the details of finance amount of Coming to the case specifics, the details of finance amount of Rs.4,45,40,000/- provided by the assessee to the builders against provided by the assessee to the builders against provided by the assessee to the builders against the collateral of the 3 properties worth Rs.5,48,75,330/- was found the collateral of the 3 properties worth Rs.5,48,75,330/ the collateral of the 3 properties worth Rs.5,48,75,330/ in desktop in the office premises of S in desktop in the office premises of Shri Ravi Agarwal Group. hri Ravi Agarwal Group. Applying the aforesaid reasoning to the assessee's case, the Applying the aforesaid reasoning to the assessee's case, the Applying the aforesaid reasoning to the assessee's case, the Assessing Officer noticed that the assessee entered into financing a Assessing Officer noticed that the assessee entered into financing a Assessing Officer noticed that the assessee entered into financing a sum of Rs.4,45,40,000/ sum of Rs.4,45,40,000/- to the builders, M/s.Mangalmurti to the builders, M/s.Mangalmurti Developers against the collateral of flat no. Developers against the collateral of flat no.1003 and M/s.Sethia 1003 and M/s.Sethia Infrastructure against the collateral of flat no.503 and against the Infrastructure against the collateral of flat no.503 and against the Infrastructure against the collateral of flat no.503 and against the collateral of shop no.203, which were stated to have been acquired collateral of shop no.203, which were stated to have been acquired collateral of shop no.203, which were stated to have been acquired and agreements got registered for an aggregate consideration of and agreements got registered for an aggregate consideration of and agreements got registered for an aggregate consideration of ₹5,48,75,330/- , against which the , against which the financing amount was recorded financing amount was recorded at ₹4,45,40,000/-. According to the Assessing Officer, although the . According to the Assessing Officer, although the . According to the Assessing Officer, although the entire consideration of ₹5,48,75,330/- was remitted through entire consideration of was remitted through banking channels, the actual amount financed was ₹4,45,40,000/-. banking channels, the actual amount financed was banking channels, the actual amount financed was He, He, therefore, therefore, inferred inferred that that the the differential differential amount amount of of ₹1,03,35,330/- represented cash returned by the builders to the represented cash returned by the builders to the represented cash returned by the builders to the assessee. Since the aforesaid cash receipt was, according to the Since the aforesaid cash receipt was, according to the Since the aforesaid cash receipt was, according to the Assessing Officer, not recorded in the regular books of account and Assessing Officer, not recorded in the regular books of account and Assessing Officer, not recorded in the regular books of account and no satisfactory explanation regardin no satisfactory explanation regarding its nature and source was g its nature and source was ₹1,03,35,330/ 1,03,35,330/- as furnished, he proposed proposed the amount of unexplained money under section 69A of the Act. The Assessing unexplained money under section 69A of the Act. The Assessing unexplained money under section 69A of the Act. The Assessing

The Assessing Officer rejected the assessee's explanation principally The Assessing Officer rejected the assessee's explanation principally The Assessing Officer rejected the assessee's explanation principally on the ground that the same was not consistent with the on the ground that the same was not consistent with the on the ground that the same was not consistent with the incriminating material found during the search. He specifically incriminating material found during the search. He specifically incriminating material found during the search. He specifically observed that his conclusion was not founded merely upon the that his conclusion was not founded merely upon the that his conclusion was not founded merely upon the statements of persons such as Monica Khemuka and Varsha statements of persons such as Monica Khemuka and Varsha statements of persons such as Monica Khemuka and Varsha Chavan, but upon the documentary and electronic material seized Chavan, but upon the documentary and electronic material seized Chavan, but upon the documentary and electronic material seized during the search and the statements recorded with reference during the search and the statements recorded with reference during the search and the statements recorded with reference thereto. Reference was thereto. Reference was also made to the statement of Navin also made to the statement of Navin Agrawal, wherein, according to the Assessing Officer, the modus of Agrawal, wherein, according to the Assessing Officer, the modus of Agrawal, wherein, according to the Assessing Officer, the modus of builder financing and return of the differential amount in cash had builder financing and return of the differential amount in cash had builder financing and return of the differential amount in cash had been explained. The Assessing Officer further observed that the The Assessing Officer further observed that the The Assessing Officer further observed that the assessee had not offered any substantive explanation with regard to fered any substantive explanation with regard to fered any substantive explanation with regard to the aforesaid search material and had merely denied having made the aforesaid search material and had merely denied having made the aforesaid search material and had merely denied having made or received any cash payments. Such denial, in his view, did not or received any cash payments. Such denial, in his view, did not or received any cash payments. Such denial, in his view, did not satisfactorily displace the inference arising from the seized material. satisfactorily displace the inference arising from the seized material. satisfactorily displace the inference arising from the seized material.

In addition, the Assessing Officer treated the interest allegedly n addition, the Assessing Officer treated the interest allegedly n addition, the Assessing Officer treated the interest allegedly earned on the financing arrangement as undisclosed income. earned on the financing arrangement as undisclosed income. earned on the financing arrangement as undisclosed income. Although interest of Although interest of ₹94,60,746/- was initially worked out with was initially worked out with reference to the entire period, the Assessing Officer, taking into reference to the entire period, the Assessing Officer, taking into reference to the entire period, the Assessing Officer, taking into account the respective dates of the transactions, recomputed the ccount the respective dates of the transactions, recomputed the ccount the respective dates of the transactions, recomputed the

On further appeal, the learned CIT(A), while deleting the addition of On further appeal, the learned CIT(A), while deleting the addition of On further appeal, the learned CIT(A), while deleting the addition of ₹1,03,35,330/- made under section 69A of the Act, followed the made under section 69A of the Act, followed the made under section 69A of the Act, followed the order of his predecessor in the case of Shri Ravi Omprakash order of his predecessor in the case of Shri Ravi Omprakash order of his predecessor in the case of Shri Ravi Omprakash Agarwal for A.Y. 2023 Agarwal for A.Y. 2023-24. However, the addition of ₹ ₹77,34,969/- on account of interest allegedly earned from the financing activity was account of interest allegedly earned from the financing activity was account of interest allegedly earned from the financing activity was sustained. The learned CIT(A) accepted the broad proposition that, sustained. The learned CIT(A) accepted the broad proposition that, sustained. The learned CIT(A) accepted the broad proposition that, according to the material gathered during the search, the according to the material gathered during the search, the according to the material gathered during the search, the transactions described as purchases of properties were treated as transactions described as purchases of properties were tre transactions described as purchases of properties were tre builder-financing arrangements, with the properties serving as financing arrangements, with the properties serving as financing arrangements, with the properties serving as collateral for the amounts advanced. He referred to the statements collateral for the amounts advanced. He referred to the statements collateral for the amounts advanced. He referred to the statements and other material gathered during the search and post-search and other material gathered during the search and post and other material gathered during the search and post proceedings in support of the said understanding. According to proceedings in support of the said understanding. Accord proceedings in support of the said understanding. Accord him, the financing activity was not reflected in the regular returns him, the financing activity was not reflected in the regular returns him, the financing activity was not reflected in the regular returns of income and had come to light only pursuant to the search of income and had come to light only pursuant to the search of income and had come to light only pursuant to the search proceedings. As regards the modus operandi, the learned CIT(A) As regards the modus operandi, the learned CIT(A) As regards the modus operandi, the learned CIT(A)

In the facts of the assessee's case, the learned CIT(A) noted that the In the facts of the assessee's case, the learned CIT(A) noted that the In the facts of the assessee's case, the learned CIT(A) noted that the assessee had advanced ₹4,45,40,000/- against three properties assessee had advanced against three properties ing an aggregate agreement value of ₹5,48,75,330/ having an aggregate agreement value of 5,48,75,330/-. Since the entire agreement value had been paid through banking channels, entire agreement value had been paid through banking channels, entire agreement value had been paid through banking channels, the difference of ₹1,03,35,330/ 1,03,35,330/- was, according to the Assessing was, according to the Assessing Officer, treated as having been received back in cash from the Officer, treated as having been received back in cash from the Officer, treated as having been received back in cash from the builders. The learned CIT(A), however, took the view that even lders. The learned CIT(A), however, took the view that even lders. The learned CIT(A), however, took the view that even assuming such cash return, the source thereof was traceable to the assuming such cash return, the source thereof was traceable to the assuming such cash return, the source thereof was traceable to the amount of ₹5,48,75,330/ 5,48,75,330/- already paid by the assessee through already paid by the assessee through accounted banking transactions. Consequently, he held that the accounted banking transactions. Consequently, he held that the accounted banking transactions. Consequently, he held that the receipt of the differential amount did not, by itself, give rise to an receipt of the differential amount did not, by itself, give rise to an receipt of the differential amount did not, by itself, give rise to an unexplained investment or unexplained money within the meaning unexplained investment or unexplained money within the meaning unexplained investment or unexplained money within the meaning of section 69A. The learned CIT(A) further noted that the assessee The learned CIT(A) further noted that the assessee The learned CIT(A) further noted that the assessee had denied having received any cash from the builders and had, in had denied having received any cash from the builders a had denied having received any cash from the builders a the alternative, submitted that, even if the alleged cash return were the alternative, submitted that, even if the alleged cash return were the alternative, submitted that, even if the alleged cash return were accepted, the same represented a return of the assessee's own accepted, the same represented a return of the assessee's own accepted, the same represented a return of the assessee's own accounted funds. On this reasoning, he concluded that the source accounted funds. On this reasoning, he concluded that the source accounted funds. On this reasoning, he concluded that the source

For arriving at the aforesaid conclusion, the learned CIT(A) followed For arriving at the aforesaid conclusion, the learned CIT(A) followed For arriving at the aforesaid conclusion, the learned CIT(A) followed the order of his predecessor in the case of Shri Ravi Omprakash the order of his predecessor in the case of Shri Ravi Omprakash the order of his predecessor in the case of Shri Ravi Omprakash Agarwal for A.Y. 2023 Agarwal for A.Y. 2023-24, wherein, on substantially similar facts, 24, wherein, on substantially similar facts, the addition under section 69A in respect of the differential amount the addition under section 69A in respect of the differential amount the addition under section 69A in respect of the differential amount allegedly returned in cash by the builders had been deleted. allegedly returned in cash by the builders had been deleted. allegedly returned in cash by the builders had been deleted. Respectfully following the said decision, the learned CIT(A) deleted Respectfully following the said decision, the learned CIT(A) deleted Respectfully following the said decision, the learned CIT(A) deleted the addition of ₹1,03,35,330/ 1,03,35,330/- made in the hands of the assessee. made in the hands of the assessee.

We have considered the rival submissions and ca We have considered the rival submissions and carefully perused the refully perused the material available on record. The controversy before us concerns material available on record. The controversy before us concerns material available on record. The controversy before us concerns the addition towards the alleged cash received back from the the addition towards the alleged cash received back from the the addition towards the alleged cash received back from the builders and the consequential addition towards interest allegedly builders and the consequential addition towards interest allegedly builders and the consequential addition towards interest allegedly earned from the purported builder earned from the purported builder-financing activity. We find that activity. We find that

In Ground nos. 1 & 2 . 1 & 2 , Revenue is aggrieved with the deletion of the evenue is aggrieved with the deletion of the addition of Rs. 35,32,252/ addition of Rs. 35,32,252/- made by the Assessing Officer u/s e Assessing Officer u/s 56(2)(x)(b) of the Act. )(b) of the Act.

During the course of assessment proceedings, the learned During the course of assessment proceedings, the learned During the course of assessment proceedings, the learned Assessing Officer noticed that the assessee had acquired Flat No. Assessing Officer noticed that the assessee had acquired Flat No. Assessing Officer noticed that the assessee had acquired Flat No. 1003, Mangalmurti, Dadar, from M/s Mangalmurti Developers for 1003, Mangalmurti, Dadar, from M/s Mangalmurti Developers for 1003, Mangalmurti, Dadar, from M/s Mangalmurti Developers for an agreement value of an agreement value of ₹2,11,55,330/-, whereas the stamp , whereas the stamp-duty value was ₹2,46,87,582/ 2,46,87,582/-, resulting in a difference of , resulting in a difference of ₹35,32,252/-. Since the difference exceeded both Since the difference exceeded both ₹50,000/- and the prescribed and the prescribed

In response, the assessee submitted that the property was under In response, the assessee submitted that the property was under In response, the assessee submitted that the property was under construction on the date of purchase and continued to remain so. It construction on the date of purchase and continued to remain so. It construction on the date of purchase and continued to remain so. It was contended that the stamp was contended that the stamp-duty value represented the rate duty value represented the rate applicable to a completed or ready applicable to a completed or ready-to-use property and did not use property and did not reflect the peculiar characteristics and risks associated with an reflect the peculiar characteristics and risks associated with an reflect the peculiar characteristics and risks associated with an under-construction property. The assessee accordingly claimed that construction property. The assessee accordingly claimed that construction property. The assessee accordingly claimed that the consideration paid represented the fair market value of the the consideration paid represented the fair market value of the the consideration paid represented the fair market value of the property on the date of purchase property on the date of purchase. In the alternative, reference to the . In the alternative, reference to the Departmental Valuation Officer was sought in terms of the Departmental Valuation Officer was sought in terms of the Departmental Valuation Officer was sought in terms of the applicable provisions. applicable provisions. The learned Assessing Officer, however, was The learned Assessing Officer, however, was not persuaded by the explanation. He observed that the stamp-duty not persuaded by the explanation. He observed that the stamp not persuaded by the explanation. He observed that the stamp value had been determined value had been determined by the stamp-duty authority after taking duty authority after taking into account the relevant factors and that no separate valuation into account the relevant factors and that no separate valuation into account the relevant factors and that no separate valuation mechanism for an under mechanism for an under-construction property, as claimed by the construction property, as claimed by the assessee, had been demonstrated. He further noted that the assessee, had been demonstrated. He further noted that the assessee, had been demonstrated. He further noted that the assessee had not furnished assessee had not furnished supporting evidence to substantiate the supporting evidence to substantiate the alleged difference between the stamp alleged difference between the stamp-duty value and the fair market duty value and the fair market value of the property. value of the property. The Assessing Officer also noted that, The Assessing Officer also noted that, although the assessee had initially sought a reference to the DVO, although the assessee had initially sought a reference to the DVO, although the assessee had initially sought a reference to the DVO, the request was sub the request was subsequently withdrawn vide reply dated sequently withdrawn vide reply dated 31.01.2025. On this basis, the Assessing Officer proceeded to adopt 31.01.2025. On this basis, the Assessing Officer proceeded to adopt 31.01.2025. On this basis, the Assessing Officer proceeded to adopt

On further appeal, the learned CIT(A), after considering the On further appeal, the learned CIT(A), after considering the On further appeal, the learned CIT(A), after considering the assessee’s submissions and his findings regarding the nature of the assessee’s submissions and his findings regarding the nature of the assessee’s submissions and his findings regarding the nature of the assessee’s activities, held that the transact assessee’s activities, held that the transactions shown as purchase ions shown as purchase of flats were, in substance, part of the builder-financing of flats were, in substance, part of the builder of flats were, in substance, part of the builder arrangements and that the flats represented collateral for the arrangements and that the flats represented collateral for the arrangements and that the flats represented collateral for the financing extended to the builders. He accordingly held that the financing extended to the builders. He accordingly held that the financing extended to the builders. He accordingly held that the apparent purchase and sale of the properties c apparent purchase and sale of the properties could not be viewed ould not be viewed independently of the financing activity. independently of the financing activity. The learned CIT(A) further The learned CIT(A) further observed that, having treated the income arising from such observed that, having treated the income arising from such observed that, having treated the income arising from such financing arrangements as interest income, the amounts shown as financing arrangements as interest income, the amounts shown as financing arrangements as interest income, the amounts shown as gains on sale of flats and rental income were gains on sale of flats and rental income were, according to him, only , according to him, only the form in which the underlying financing transactions had been the form in which the underlying financing transactions had been the form in which the underlying financing transactions had been presented. On that basis, he held that the provisions of section presented. On that basis, he held that the provisions of section presented. On that basis, he held that the provisions of section 56(2)(x)(b), as well as section 50C, were not attracted to the 56(2)(x)(b), as well as section 50C, were not attracted to the 56(2)(x)(b), as well as section 50C, were not attracted to the purchase or sale of such properties. H purchase or sale of such properties. He accordingly concluded that, e accordingly concluded that, once the financing activity was considered to be assessable in the once the financing activity was considered to be assessable in the once the financing activity was considered to be assessable in the form of interest on the amounts advanced, the difference between form of interest on the amounts advanced, the difference between form of interest on the amounts advanced, the difference between the stamp-duty value and the stated purchase consideration could duty value and the stated purchase consideration could duty value and the stated purchase consideration could not separately be brought to not separately be brought to tax under section 56(2)(x)(b). tax under section 56(2)(x)(b). In view

We have considered the rival submissions and perused the material We have considered the rival submissions and perused the material We have considered the rival submissions and perused the material available on record. T available on record. The learned counsel for the assessee submitted he learned counsel for the assessee submitted that the issue stands covered by the decision of the coordinate that the issue stands covered by the decision of the coordinate that the issue stands covered by the decision of the coordinate Bench in the case of Suraj Omprakash Agarwal, ITA No. Suraj Omprakash Agarwal, ITA No. Bench in the case of 7812/Mum/2025, 7812/Mum/2025, order order dated dated 15.09.2026, 15.09.2026 , wherein, wherein, on on materially similar facts, the matter was materially similar facts, the matter was restored to the file of the restored to the file of the Assessing Officer for determination of the fair market value through Assessing Officer for determination of the fair market value through Assessing Officer for determination of the fair market value through the Departmental Valuation Officer. The relevant findings of the the Departmental Valuation Officer. The relevant findings of the the Departmental Valuation Officer. The relevant findings of the coordinate Bench have been placed before us. coordinate Bench have been placed before us. We have carefully We have carefully gone through the aforesaid dec gone through the aforesaid decision. The coordinate Bench, while ision. The coordinate Bench, while considering the applicability of section 56(2)(x)(b), held that the considering the applicability of section 56(2)(x)(b), held that the considering the applicability of section 56(2)(x)(b), held that the provision is attracted where an immovable property is acquired for provision is attracted where an immovable property is acquired for provision is attracted where an immovable property is acquired for consideration and the stamp consideration and the stamp-duty value exceeds the consideration duty value exceeds the consideration beyond the statutory beyond the statutory threshold. The applicability of the provision, in threshold. The applicability of the provision, in the view of the Bench, does not depend upon the nature of the the view of the Bench, does not depend upon the nature of the the view of the Bench, does not depend upon the nature of the assessee's business or the manner in which the transaction is assessee's business or the manner in which the transaction is assessee's business or the manner in which the transaction is characterised. Consequently, the deletion of the addition by the characterised. Consequently, the deletion of the addition by the characterised. Consequently, the deletion of the addition by the learned CIT(A) merely on the ground that the transactions rely on the ground that the transactions rely on the ground that the transactions constituted builder financing was not found sustainable. At the constituted builder financing was not found sustainable. constituted builder financing was not found sustainable. same time, the coordinate Bench took note of the assessee's specific same time, the coordinate Bench took note of the assessee's specific same time, the coordinate Bench took note of the assessee's specific challenge challenge to to the the stamp-duty stamp duty value value and and the the request request for for determination of the fair m determination of the fair market value. It observed that section arket value. It observed that section

In the present case also, the assessee had disputed the stamp In the present case also, the assessee had disputed the stamp-duty In the present case also, the assessee had disputed the stamp value of the under value of the under-construction property and had sought construction property and had sought determination of its fair market value by the Departmental determination of its fair market value by the Depa determination of its fair market value by the Depa Valuation Officer. The issue, therefore, is squarely covered by the Valuation Officer. The issue, therefore, is squarely covered by the Valuation Officer. The issue, therefore, is squarely covered by the aforesaid decision of the coordinate Bench. Respectfully following aforesaid decision of the coordinate Bench. Respectfully following aforesaid decision of the coordinate Bench. Respectfully following the same, we set aside the finding of the learned CIT(A) on this the same, we set aside the finding of the learned CIT(A) on this the same, we set aside the finding of the learned CIT(A) on this issue and restore the matter to the file of the issue and restore the matter to the file of the Assessing Officer with Assessing Officer with a direction to make a reference to the Departmental Valuation a direction to make a reference to the Departmental Valuation a direction to make a reference to the Departmental Valuation Officer for determination of the fair market value of the property in Officer for determination of the fair market value of the property in Officer for determination of the fair market value of the property in accordance with law. The Assessing Officer shall thereafter accordance with law. The Assessing Officer shall thereafter accordance with law. The Assessing Officer shall thereafter reconsider the applicability and quantum reconsider the applicability and quantum of addition under section of addition under section 56(2)(x)(b), in the light of the valuation so determined, after 56(2)(x)(b), in the light of the valuation so determined, after 56(2)(x)(b), in the light of the valuation so determined, after affording due and adequate opportunity of hearing to the assessee. affording due and adequate opportunity of hearing to the assessee. affording due and adequate opportunity of hearing to the assessee. Accordingly, Ground Nos. 1 and 2 of the Revenue are allowed for Ground Nos. 1 and 2 of the Revenue are allowed for Ground Nos. 1 and 2 of the Revenue are allowed for statistical purposes. statistical purposes.

Now, we take up the appeal of the assessee e take up the appeal of the assessee L7 Media Pvt Ltd for L7 Media Pvt Ltd for A.Y. 2021-22. The ground he grounds raised by the assessee in its appeal are raised by the assessee in its appeal are reproduced as under: reproduced as under:

As regards Ground No. 2, we have already adjudicated the identical As regards Ground No. 2, we have already adjudicated the identical As regards Ground No. 2, we have already adjudicated the identical issue in the assessee's appeal for A.Y. 2023 issue in the assessee's appeal for A.Y. 2023-24. Following the said 24. Following the said decision, the issue arising in the present year is also decided decision, the issue arising in the present year is also decided decision, the issue arising in the present year is also decided mutatis mutandis in the same terms. As regards Ground No. 1, the in the same terms. As regards Ground No. 1, the in the same terms. As regards Ground No. 1, the assessee assessee assessee has has has challenged challenged challenged the the the validity validity validity of of of the the the reassessment reassessment reassessment proceedings. Since the issue relating to the quantum addition has proceedings. Since the issue relating to the quantum addition has proceedings. Since the issue relating to the quantum addition has been adjudicated as aforesaid, and having regard to the manner in been adjudicated as aforesaid, and having regard to the manner in been adjudicated as aforesaid, and having regard to the manner in which the present appeal is being disposed of, we leave the legal appeal is being disposed of, we leave the legal appeal is being disposed of, we leave the legal ground challenging the validity of reassessment open, to be ground challenging the validity of reassessment open, to be ground challenging the validity of reassessment open, to be considered, if necessary, at an appropriate stage. considered, if necessary, at an appropriate stage.

Now, we take up the appeal of the assessee we take up the appeal of the assessee namely namely M/s L7 Construction Pvt. Ltd. in ITA No.780 Construction Pvt. Ltd. in ITA No.7801/MUM/2025 for A.Y. 2023 1/MUM/2025 for A.Y. 2023-24 and cross-appeal of the appeal of the Revenue in ITA No. 7725/MUM/2025. The in ITA No. 7725/MUM/2025. The relevant grounds raised by the assessee and R raised by the assessee and Revenue are raised by the assessee and R reproduced as under: reproduced as under:

Upon examination of the material found during the search and the Upon examination of the material found during the search and the Upon examination of the material found during the search and the assessee's explanation, the Assessing Officer identified sixteen assessee's explanation, the Assessing Officer identified sixteen assessee's explanation, the Assessing Officer identified sixteen transactions relevant for determining the alleged differential cash evant for determining the alleged differential cash evant for determining the alleged differential cash movement. In respect of fourteen properties where the finance movement. In respect of fourteen properties where the finance movement. In respect of fourteen properties where the finance amount was lower than the purchase consideration, the aggregate amount was lower than the purchase consideration, the aggregate amount was lower than the purchase consideration, the aggregate purchase consideration was ₹26,78,69,697/- as against finance of purchase consideration was as against finance of ₹13,27,20,000/-. The differential amount of . The differential amount of ₹13,51,49,697/ 13,51,49,697/- was, according to the Assessing Officer, returned by the builders to the according to the Assessing Officer, returned by the builders to the according to the Assessing Officer, returned by the builders to the assessee in cash. In respect of two properties where the finance assessee in cash. In respect of two properties where the finance assessee in cash. In respect of two properties where the finance amount exceeded the purchase consideration, the corresponding amount exceeded the purchase consideration, the correspondi amount exceeded the purchase consideration, the correspondi figures were ₹2,08,93,400/ 2,08,93,400/- and ₹1,58,81,000/-, resulting in a , resulting in a differential of ₹50,12,400/ 50,12,400/-, which the Assessing Officer inferred to , which the Assessing Officer inferred to have been paid or returned by the assessee to the builders in cash. have been paid or returned by the assessee to the builders in cash. have been paid or returned by the assessee to the builders in cash. The Assessing Officer further observed that his conclusion was not The Assessing Officer further observed that his conc The Assessing Officer further observed that his conc founded solely upon the statements recorded during the search but founded solely upon the statements recorded during the search but founded solely upon the statements recorded during the search but upon the electronic and documentary material found and seized, upon the electronic and documentary material found and seized, upon the electronic and documentary material found and seized, including WhatsApp communications and Excel sheets, read with including WhatsApp communications and Excel sheets, read with including WhatsApp communications and Excel sheets, read with the statements of persons examined during the sear the statements of persons examined during the search. According to ch. According to him, the said material disclosed the alleged modus operandi of him, the said material disclosed the alleged modus operandi of him, the said material disclosed the alleged modus operandi of builder financing, under which the differential between the builder financing, under which the differential between the builder financing, under which the differential between the agreement value and the finance amount was settled in cash. The agreement value and the finance amount was settled in cash. The agreement value and the finance amount was settled in cash. The Assessing Officer also recorded that the assessee had not furnished Assessing Officer also recorded that the assessee ha Assessing Officer also recorded that the assessee ha an explanation which, in his view, satisfactorily addressed the an explanation which, in his view, satisfactorily addressed the an explanation which, in his view, satisfactorily addressed the incriminating material. incriminating material. On the aforesaid basis, the Assessing On the aforesaid basis, the Assessing

The learned CIT(A) adjudicated the two components of t The learned CIT(A) adjudicated the two components of the disputed The learned CIT(A) adjudicated the two components of t addition separately. In respect of the amount of addition separately. In respect of the amount of ₹ ₹13,51,49,697/- allegedly received back from the builders, he noted that the allegedly received back from the builders, he noted that the allegedly received back from the builders, he noted that the assessee had paid assessee had paid ₹26,78,69,697/- through banking channels through banking channels against the stated agreement value of the properties, whereas the against the stated agreement value of the properties, where against the stated agreement value of the properties, where ₹13,27,20,000/ corresponding corresponding finance finance amount amount was was 13,27,20,000/-. The differential amount of ₹13,51,49,697/- was, according to the differential amount of was, according to the Assessing Officer, returned by the builders in cash. The learned Assessing Officer, returned by the builders in cash. The learned Assessing Officer, returned by the builders in cash. The learned CIT(A), following the decision of his predecessor in the case of Shri CIT(A), following the decision of his predecessor in the case of Shri CIT(A), following the decision of his predecessor in the case of Shri Ravi Omprakash Agarwal for A.Y. 2023 Ravi Omprakash Agarwal for A.Y. 2023-24, held that the alleged 24, held that the alleged cash return represented the assessee's own funds, the source cash return represented the assessee's own funds, the source cash return represented the assessee's own funds, the source whereof was traceable to the accounted banking whereof was traceable to the accounted banking-channel payments, channel payments, and accordingly deleted the addition under section 69A. and accordingly deleted the addition under section 69A. and accordingly deleted the addition under section 69A.

In respect of the remaining two properties, the learned CIT(A) noted pect of the remaining two properties, the learned CIT(A) noted pect of the remaining two properties, the learned CIT(A) noted that the finance amount of that the finance amount of ₹2,08,93,400/- exceeded the agreement exceeded the agreement value of ₹1,58,81,000/ 1,58,81,000/- by ₹50,12,400/-. According to the . According to the Assessing Officer, the differential amount represented cash Assessing Officer, the differential amount represented cash Assessing Officer, the differential amount represented cash advanced by the assessee to the builders. The learned CIT(A) y the assessee to the builders. The learned CIT(A) y the assessee to the builders. The learned CIT(A)

As regards the legal provision applicable to the alleged cash As regards the legal provision applicable to the alleged cash As regards the legal provision applicable to the alleged cash payment of ₹50,12,400/ 50,12,400/-, the learned CIT(A) held that section 69A , the learned CIT(A) held that section 69A was not the appropriate provision, since the assessee was not found was not the appropriate provision, since the assessee was not found was not the appropriate provision, since the assessee was not found to be in possession of the cash. According to him, the material on to be in possession of the cash. According to him, the mater to be in possession of the cash. According to him, the mater record instead indicated an investment exceeding the amount record instead indicated an investment exceeding the amount record instead indicated an investment exceeding the amount recorded in the books. He, therefore, invoked section 69B and held recorded in the books. He, therefore, invoked section 69B and held recorded in the books. He, therefore, invoked section 69B and held that the alleged cash financing of ₹50,12,400/- that the alleged cash financing of represented an amount of investment not fully disclosed in the books of account. amount of investment not fully disclosed in the books of ac amount of investment not fully disclosed in the books of ac Exercising what he considered to be his concurrent appellate Exercising what he considered to be his concurrent appellate Exercising what he considered to be his concurrent appellate powers, the learned CIT(A) accordingly treated the reference to powers, the learned CIT(A) accordingly treated the reference to powers, the learned CIT(A) accordingly treated the reference to section 69A in the assessment order as a curable error and section 69A in the assessment order as a curable error and section 69A in the assessment order as a curable error and sustained the addition of sustained the addition of ₹50,12,400/- by invoking section 69B o by invoking section 69B of the Act.

We have heard rival submission on the issue in dispute. We have heard rival submission on the issue in dispute. We have heard rival submission on the issue in dispute. We find that both the issues under consideration are covered by the that both the issues under consideration are covered by the that both the issues under consideration are covered by the decision of the coordinate Bench in the case of Shri Ravi decision of the coordinate Bench in the case of decision of the coordinate Bench in the case of Omprakash Agarwal (supra) Omprakash Agarwal (supra), the relevant portion whereof , the relevant portion whereof has already been reproduced hereinabove. In the said case, the Tribunal already been reproduced hereinabove. In the said case, the Tribunal already been reproduced hereinabove. In the said case, the Tribunal had examined both facets of the transaction, namely, the cash had examined both facets of the transaction, namely, the cash had examined both facets of the transaction, namely, the cash allegedly paid by the builders to the assessee and the cash allegedly allegedly paid by the builders to the assessee and the cash allegedly allegedly paid by the builders to the assessee and the cash allegedly paid or returned by the assessee to the builders, and deleted the paid or returned by the assessee to the builders, an paid or returned by the assessee to the builders, an additions made on both counts. additions made on both counts. We may note that, in the case of We may note that, in the case of L7 Media Pvt. Ltd. for AY 2023 Media Pvt. Ltd. for AY 2023-24, the issue adjudicated by , the issue adjudicated by us is confined to the cash allegedly received by the assessee from the confined to the cash allegedly received by the assessee from the confined to the cash allegedly received by the assessee from the builder. In the present case, however, the addi builder. In the present case, however, the additions encompass tions encompass both the alleged cash received from the builders as well as the both the alleged cash received from the builders as well as the both the alleged cash received from the builders as well as the alleged cash paid or returned by the assessee to the builders. Since alleged cash paid or returned by the assessee to the builders. Since alleged cash paid or returned by the assessee to the builders. Since both these aspects stand considered and adjudicated by the both these aspects stand considered and adjudicated by the both these aspects stand considered and adjudicated by the coordinate Bench in coordinate Bench in Shri Ravi Omprakash Agarwal Shri Ravi Omprakash Agarwal (supra), and the additions on both counts were deleted, we see no reason to take the additions on both counts were deleted, we see no reason to take the additions on both counts were deleted, we see no reason to take a different view in the present case. a different view in the present case. Accordingly, respectfully Accordingly, respectfully following the decision of the coordinate Bench in Shri Ravi following the decision of the coordinate Bench in following the decision of the coordinate Bench in Omprakash Agarwal (supra) Omprakash Agarwal (supra), Ground Nos. 1(a) and 1(b Ground Nos. 1(a) and 1(b) of the assessee are allowed assessee are allowed, and Ground No. 1 of the Revenue is Ground No. 1 of the Revenue is dismissed.

Ground No. 1(c) of the assessee’s appeal relates to the addition of Ground No. 1(c) of the assessee’s appeal relates to the addition of Ground No. 1(c) of the assessee’s appeal relates to the addition of Rs.1,17,82,130/- made on account of alleged interest income made on account of alleged interest income made on account of alleged interest income

We have considered the rival submissions and carefully perused the We have considered the rival submissions and carefully perused the We have considered the rival submissions and carefully perused the material available on record. We find that the issue is squarely material available on record. We find that the issue is squarely material available on record. We find that the issue is squarely ordinate Bench in the case of Shri covered by the decision of the co covered by the decision of the coordinate Bench in the case of Ravi Omprakash Agarwal (supra) Ravi Omprakash Agarwal (supra), which has already been followed , which has already been followed by this Bench while adjudicating the identical issue in the case of by this Bench while adjudicating the identical issue in the case of by this Bench while adjudicating the identical issue in the case of L7 Media Pvt. Ltd. for A.Y. 2023 L7 Media Pvt. Ltd. for A.Y. 2023-24. Following the aforesaid . Following the aforesaid decision and maintaining con decision and maintaining consistency, we find no justification for sistency, we find no justification for sustaining the impugned addition. sustaining the impugned addition. Accordingly, the addition of Accordingly, the addition of Rs.1,17,82,130/- is deleted. is deleted. Ground No. 1(c) of the assessee is Ground No. 1(c) of the assessee is allowed.

Ground Nos. 2 and 3 of the Revenue’s appeal relate to the addition Ground Nos. 2 and 3 of the Revenue’s appeal relate to the addition Ground Nos. 2 and 3 of the Revenue’s appeal relate to the addition of Rs.51,17,000/- made by the Assessing Officer under section made by the Assessing Officer under section made by the Assessing Officer under section 56(2)(x)(b) of the Act on account of the difference between the 56(2)(x)(b) of the Act on account of the difference between the 56(2)(x)(b) of the Act on account of the difference between the stamp-duty value and the stated consideration of the property duty value and the stated consideration of the property duty value and the stated consideration of the property namely Office No 1001 Balaji Arcade. Office No 1001 Balaji Arcade. The learned CIT(A) deleted the The learned CIT(A) deleted the addition primarily on the ground that the property transactions rimarily on the ground that the property transactions rimarily on the ground that the property transactions

We have considered the rival submissions and carefully perused the We have considered the rival submissions and carefully perused the We have considered the rival submissions and carefully perused the material available on record. We find that the issue stands covered material available on record. We find that the issue stands covered material available on record. We find that the issue stands covered by the decision of the coordinate Bench in the case of L7 Media by the decision of the coordinate Bench in the case of by the decision of the coordinate Bench in the case of Pvt. Ltd. for A.Y. 2023 Pvt. Ltd. for A.Y. 2023-24, wherein, on materially simila , wherein, on materially similar facts, the matter was restored to the file of the Assessing Officer for the matter was restored to the file of the Assessing Officer for the matter was restored to the file of the Assessing Officer for making a reference to the District Valuation Officer (DVO) District Valuation Officer (DVO) and for making a reference to the determining the issue afresh in accordance with law. determining the issue afresh in accordance with law. determining the issue afresh in accordance with law.

In the present case also, the assessee had disputed the st In the present case also, the assessee had disputed the stamp-duty In the present case also, the assessee had disputed the st value, inter alia, on the ground that the property was under value, inter alia, on the ground that the property was under value, inter alia, on the ground that the property was under construction and that the stamp construction and that the stamp-duty value did not represent its duty value did not represent its actual fair market value. The Assessing Officer, while making the actual fair market value. The Assessing Officer, while making the actual fair market value. The Assessing Officer, while making the addition, noted that the assessee had initially sought a reference to addition, noted that the assessee had initially sought addition, noted that the assessee had initially sought the DVO but subsequently withdrew such request. In these the DVO but subsequently withdrew such request. the DVO but subsequently withdrew such request. circumstances, and following the aforesaid decision of the circumstances, and following the aforesaid decision of the circumstances, and following the aforesaid decision of the coordinate Bench, we consider it appropriate, in the interest of coordinate Bench, we consider it appropriate, in the interest of coordinate Bench, we consider it appropriate, in the interest of justice, to restore the issue to the file of the Assessing Officer for justice, to restore the issue to the file of the Assessing justice, to restore the issue to the file of the Assessing obtaining an appropriate valuation from the DVO and thereafter obtaining an appropriate valuation from the DVO and thereafter obtaining an appropriate valuation from the DVO and thereafter adjudicating the applicability and quantum of addition under adjudicating the applicability and quantum of addition under adjudicating the applicability and quantum of addition under section 56(2)(x)(b) afresh, in accordance with law, after affording section 56(2)(x)(b) afresh, in accordance with law, after affording section 56(2)(x)(b) afresh, in accordance with law, after affording Accordingly, Ground due opportunity of hearing to the assessee. due opportunity of hearing to the assessee. Accordin

In the result, appeal of the assessee L7 Media Pvt Ltd for A.Y. 2023 appeal of the assessee L7 Media Pvt Ltd for A.Y. 2023 appeal of the assessee L7 Media Pvt Ltd for A.Y. 2023- 24 is allowed and appeal for AY 2021 and appeal for AY 2021-22 is partly allowed, 22 is partly allowed, whereas cross-appeal of the R appeal of the Revenue for AY 2023-24 is partly is partly allowed for statistical purpose. The a The appeal of the assessee L- -7 Construction Pvt. Ltd for A.Y. 2023 for A.Y. 2023-24 stands allowed, whereas the appeal of the , whereas the appeal of the Revenue for A.Y. 2023 2023-24 is partly allowed for statistical purpose. 24 is partly allowed for statistical purpose. Order pronounced in the open Court on ounced in the open Court on 25/ /09/2026.