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Facts
The assessee's appeal arises from an order upholding an addition made by the AO under Section 153C r.w.s. 144 based on a seized development agreement. The AO treated the assessee's share of cash consideration from this agreement as unexplained money. The assessee contended that she purchased and sold the plots via registered sale deeds and declared capital gains accordingly.
Held
The Tribunal held that the seized development agreement, despite lacking all vendor signatures, contained sufficient details and was corroborated by the subsequent registered sale deed. The Tribunal found that the principle of preponderance of human probability supported the AO's inference of unexplained cash received by the assessee.
Key Issues
Whether the seized development agreement, not signed by all parties, can form the basis for addition under Section 69A, especially when the assessee relies on registered sale deeds.
Sections Cited
153C, 144, 69A, 115BBE, 142(1), 234A, 234B, 234C, 250, 132
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Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: Shri Manjunatha G. & Shri Ravish Sood
(िनधा�रण वष�/Assessment Year:2020-21) Vasanthi Bijjala, Vs. ACIT, Hyderabad. Central Circle-2(1), PAN: AFIPB2336M Hyderabad. (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Shri Y.V. Bhanu Narayan Rao, CA राज� व �ारा/Revenue by: Dr. Sachin Kumar, Sr. AR सुनवाई की तारीख/Date of Hearing: 19/11/2025 घोषणा की तारीख/Date of 03/12/2025 Pronouncement: आदेश / ORDER PER. RAVISH SOOD, J.M: The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals)-12, Hyderabad, dated 15.07.2025, which in turn arises from the order passed by the Assessing Officer (for short, “AO”) under Section 153C r.w.s. 144 of the Income-tax Act, 1961 (for short, “Act”), dated 25.02.2025, for the Assessment Year 2020-21. The assessee has assailed the impugned order of the CIT(Appeals) on the following grounds of appeal before us:
“1. On the facts and circumstances of the case, the order passed by the learned CIT(A)-12, Hyderabad u/s. 250 of the Act for the AY 2020-21 is erroneous and bad in law.
On the facts and circumstances of the case, the learned CIT(A)-12, Hyderabad erred in upholding the impugned assessment order u/s. 153C r.w.s. 144 of the Act passed by the learned AO for the AY 2020-21 wherein an erroneous addition of Rs. 2,10,600/- was made u/s. 69A r.w.s. 115BBE of the Act based on mere suspicion based on an unsigned document found in the premises of M/s. Spectra India Eco Projects Pvt. Ltd.
3. On the facts and circumstances of the case, the learned CIT(A)-12, Hyderabad erred in upholding the act of the learned AO who ignored the fact that the assessee was not the owner of the impugned open plot as mentioned in the unsigned document dated 31.12.2019 and that the assessee became the owner and got the possession of the said plot only on 30.01.2020.
4. On the facts and circumstances of the case, the learned CIT(A)-12, Hyderabad erred in upholding the act of the learned AO who raised the erroneous demand of Rs. 3,48,863/- (inclusive of interest u/s. 234A, 234B and 234C) without giving credit to the taxes paid at the time of filing the return of income for the AY 2020-21.
5. On the facts and in the circumstances of the case, the Hon. ITAT is requested to admit additional grounds/evidence, if any, as per the decision of the honourable Supreme Court in the case of NTPC vs. CIT (229 ITR 383) and consider the same in the interest of justice.
6. The appellant craves leave to add, to amend or modify the above grounds of appeal
either before or at the time of hearing of the appeal, if considered necessary.”
2. Succinctly stated, the assessee had filed her return of income for A.Y. 2020-21 on 15.01.2021, declaring her total income at Rs. 6,77,340/- . Search and seizure operations under Section 132 were thereafter conducted on 23.03.2021 at the premises of M/s Spectra Group of Companies.
During the course of the search and seizure proceedings, certain loose sheets, viz. Annexure A/SIEPL/OFF/22, Pages 130–138, were found and seized, which purportedly recorded a development agreement dated 31.12.2019 between M/s Spectra India ECO Projects Pvt. Ltd. and several landowners (including the assessee). The seized development agreement recorded an alleged cash payment of Rs. 60 lacs by the purchaser, viz. M/s Spectra India ECO Projects Pvt. Ltd to the vendors (including the assessee), and the assessee’s share in the sale consideration was mentioned at 3.51%, i.e., Rs. 2,10,600/-.
The AO, based on the contents of the seized development agreement, drew a satisfaction note on 27.07.2023 and initiated proceedings in the case of the assessee under Section 153C of the Act. Accordingly, notice under Section 153C was issued to the assessee on 28.12.2023. As the assessee had failed to comply with the notice issued u/s 153C of the Act and did not file her return of income, therefore, the AO issued notice under Section 142(1) of the Act on 22.01.2024, wherein she was called upon to file her return of income. As the assessee failed to respond to the said notice, therefore, the AO issued show-cause notice(s) under Section 144 of the Act dated 28.11.2024 and 06.12.2024, but same too initially remained unanswered until a reply was filed on 23.12.2024.
Ostensibly, the assessee in her reply dated 23.12.2024 denied any knowledge of the alleged development agreement, and contended that she had purchased the subject plots on 30.01.2020 and later sold them vide a registered sale deed dated 28.01.2021. The assessee claimed that the sale transaction and the resultant capital gains were declared by her in the return of income for A.Y. 2021-22. Also, the assessee disputed the existence of any cash receipt as was alleged in the seized papers, viz. development agreement and relied on the registered sale deed as a conclusive piece of evidence of the actual transaction.
The AO, however, relied on the seized material viz., Annexure A/SIEPL/OFF/22, Pages 130–138, and treated the assessee’s share of Rs. 2,10,600/- (3.51%) as her unexplained money under Section 69A of the Act. Accordingly, the AO vide his order passed under Section 153C r.w.s.144 of the Act assessed the income of the assessee at Rs. 8,87,940/-.
Aggrieved, the assessee carried the matter in appeal before the CIT(A), who held the seized document, viz. Annexure A/SIEPL/OFF/22, Pages 130–138, to be credible, and further relied on the surrounding circumstances, specifically the subsequent registered sale deed dated 28.01.2021 that was executed in favour of the same purchaser, i.e., M/s Spectra India ECO Projects Pvt. Ltd, as corroborative evidence, and upheld the addition and sustained the assessment.
We find that the assessee has assailed the CIT(A) order before us on multi-facet grounds, viz. (i) the addition is based on an unsigned and fictitious development agreement which the assessee had never executed; (ii) the registered sale deed is the only legally enforceable document and contradicts the seized document; and (iii) the AO and CIT(A) had erred in relying on unsigned papers recovered from the developer’s premises.
We have heard the Ld. Authorised Representatives of both parties, perused the orders of lower authorities and the material available on record.
Before proceeding further, we may herein observe that in search- related matters, the veracity and contents of seized documents are required to be carefully scrutinised, and when credible material pointing to unaccounted receipts is available with the Department, then a heavy burden is cast upon the assessee to disprove the said contents and dislodge the allegation raised by the revenue.
We are of the view that the seized agreement dated 31.12.2019, though not does not bear the signatures of all the vendors, but cannot remain oblivion of the fact that the same makes a clear and specific mention of the names of both the purchaser and vendors, survey numbers, the aggregate area and the respective shares of the individual vendors. Apart from that, the document is duly stamped and bears the signature of the purchaser, viz. M/s Spectra India ECO Projects Pvt. Ltd. In our view, a document containing such specific, identifiable details cannot be dismissed as vague or meaningless on the sole ground that it lacks the signatures of the vendors.
Applying the principle of preponderance of human probability as has been emphasised by the Hon’ble Supreme Court in the case of Sumati Dayal Vs. CIT (1995) 214 ITR 801 (SC), we are of a firm conviction that as the seized document, i.e., development agreement, viz. Annexure A/SIEPL/OFF/22, Pages 130–138, records the detailed transactional particulars and bears the purchaser’s endorsement, the same, in our view, sufficiently proves the underlying commercial arrangement. Also, the subsequent registered sale deed dated 28.01.2021, wherein the same properties were transferred to the same purchaser, further corroborates the existence of negotiations and pre-existing arrangements. In our view, the fact that the ultimate transfer was affected vide a registered sale deed does not, by itself, negate the possibility of earlier payments or advance cash consideration reflected in the seized document.
Ostensibly, the seized document specifically records that a cash amount of Rs. 60,00,000/- was paid by the purchaser to the vendors on the date of the “agreement” i.e., on 31.12.2019. Also, the “agreement” specifies the assessee’s share at 3.51%. In our considered view, in the backdrop of the surrounding circumstances and subsequent events, the inference drawn by the AO that the assessee’s share of Rs. 2,10,600/- (supra) represents unexplained cash received by her is supported by the material on record.
We thus, in terms of our aforesaid deliberations, are of the view that the CIT(A) had rightly observed that the AO had rightly assumed jurisdiction for initiating the proceedings under Section 153C of the Act. Also, we find no infirmity in his view, wherein he has upheld the addition of Rs. 2,10,600/- made by the AO under Section 69A of the Act.
In the result, we find no merit in the appeal filed by the assessee, which, being devoid and bereft of any substance, is dismissed.
Order pronounced in the open court on this 03rd day of December, 2025.
Sd/- Sd/- (MANJUNATHA G.) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 03rd December, 2025 OKK / SPS Copy to: S.No Addresses 1 Vasabthi Bijjala, 1-1-380/17, 402, Gananadha Enclave, Ashok Nagar, Hyderabad, Telangana-500020. 2 ACIT, Central Circle-2(1), Aayakar Bhavan, Opp. LB Stadium Basheerbagh, Hyderabad, Telangana-500004. 3 The Pr.CIT, Central Circle, Hyderabad. 4 The DR, ITAT Hyderabad Benches 5 Guard File By Order
Sr. Private Secretary, ITAT, Hyderabad.