JAIPAL JONA,HYDERABAD vs. DCIT, CENTRAL CIRCLE-3(3), HYDERABAD

ITA 1889/HYD/2025Status: DisposedITAT Hyderabad16 October 2026AY 2023-2417 pages
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What did the Tribunal hold?

The Tribunal addressed the issue of the Rs. 80 lakhs cash seizure. The assessee claimed Rs. 24 lakhs was part of the sale consideration for the property and Rs. 56 lakhs represented advances from customers for construction services. The Tribunal accepted the explanation for Rs. 24 lakhs, noting that the sale agreement showed a cash receipt of Rs. 18 lakhs, and the AO had considered a higher sale consideration. Therefore, the AO was directed to accept Rs. 24 lakhs as explained from the sale consideration. Regarding the remaining Rs. 56 lakhs, the Tribunal found the additional evidence (confirmation letters) filed before it to be stereotyped and lacking details to identify the parties who paid advances, their PAN, or ITR details. Consequently, these additional evidences were rejected. As no other evidence was submitted to substantiate the claim of advances for construction services, the Tribunal held that the AO was justified in making an addition for the balance amount of Rs. 56 lakhs. Thus, the assessee received partial relief of Rs. 24 lakhs, and the addition of Rs. 56 lakhs was confirmed. The judgment does not explicitly detail the findings on all grounds raised by the assessee, particularly those concerning capital gains computation, cost of acquisition, and Section 54F deduction, but the overall result indicates a partial allowance.

What were the facts?

The assessee, Jaipal Jona, filed his return for AY 2023-24. A search under Section 132 of the Income Tax Act, 1961, was conducted on March 15, 2023, covering the assessee's group. During the search, a sale agreement dated April 29, 2022, for land at Medipally Village was found, indicating a sale consideration of Rs. 2,02,54,000. The assessee had received Rs. 18 lakhs in cash and Rs. 70 lakhs via RTGS. Unaccounted cash of Rs. 80 lakhs was also seized. The assessee initially deposed that the land was registered for Rs. 78,34,000. Later, he retracted this statement, claiming the sale consideration was renegotiated to Rs. 1,02,54,000, and provided a second agreement. The Assessing Officer (AO) disregarded the second agreement, deeming it manipulated, and used the Rs. 2,02,54,000 figure for capital gains computation. The AO also rejected the claimed cost of acquisition and deduction under Section 54F. The AO treated the Rs. 80 lakhs cash seizure as unexplained.

What were the issues?

1. Whether the Tribunal had to decide if the Ld. CIT(A) erred in affirming the AO's order without appreciating the facts and legal position presented by the assessee (Ground 1)? The assessee argued that the authorities below failed to consider the facts and legal position. The revenue's contention is not recorded. 2. Whether the Tribunal had to decide if the Ld. CIT(A) erred in assuming the sale consideration of the property to be Rs. 2,02,54,000 based solely on a search statement, disregarding a retraction and evidence (Ground 2)? The assessee contended that the sale consideration was renegotiated to Rs. 1,02,54,000, and the authorities ignored the retraction and evidence. 3. Whether the Tribunal had to decide if the Ld. CIT(A) ought to have appreciated that the SRO value was Rs. 78,43,000 and the sale agreement was for Rs. 1,02,54,000, and that the AO/CIT(A) wrongly considered a manipulated figure from the sale agreement (Ground 3)? The assessee argued that the authorities relied on a manipulated figure in the sale agreement, ignoring the actual agreed consideration and SRO value. 4. Whether the Tribunal had to decide if the Ld. AO and Ld. CIT(A) erred by not enquiring about the vendee's status before making arbitrary conclusions against the vendor (Ground 4)? The assessee argued that the authorities made arbitrary conclusions without investigating the buyer's status. 5. Whether the Tribunal had to decide if the Ld. CIT(A) and Ld. AO erred in not considering the cost of acquisition in capital gains computation, treating the entire sale consideration as capital gains, contrary to the Apex Court decision in B.C. Srinivas Shetty (Ground 5)? The assessee argued that capital gains cannot be computed without considering the cost of acquisition. 6. Whether the Tribunal had to decide if the Ld. CIT(A) erred in confirming the AO's disallowance of deduction claimed under Section 54F, despite investment in a residential house property (Ground 6)? The assessee claimed investment in a residential house property qualifying for Section 54F deduction. 7. Whether the Tribunal had to decide if the Ld. CIT(A) and Ld. AO erred in treating the cash seizure of Rs. 80,00,000 as unexplained money under Section 69A, ignoring that it pertained to advances for construction services and property sale consideration (Ground 7)? The assessee argued that the cash represented advances for construction services and property sale consideration, and this explanation was disregarded. 8. Whether the Tribunal had to decide if the Ld. CIT(A) erred in stating that proper opportunity was provided, when a show cause notice was not issued, violating principles of natural justice and the Apex Court decision in TIN Box Co. (Ground 8)? The assessee argued a violation of natural justice due to the absence of a show cause notice. The revenue's contentions are recorded for specific issues within the judgment.

Which sections of the Income-tax Act were involved?

Section 132,Section 54F,Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES, HYDERABAD

Before: MANJUNATHA G & SHRI RAVISH SOOD

Per Manjunatha. G, AM: This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals), [in short “the Ld.CIT(A)”] Hyderabad-11, dated 09.09.2025, and pertains to assessment year 2023-

24.

ITA 1889/HYD/2025 JAIPAL JONA

2.

The assessee has raised the following grounds of appeal:

1) The Ld. Commissioner of Income Tax (Appeals)

The order continues below.

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