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Facts
A search on Dev Group (real estate developer) led to the admission of Rs. 80 crores as on-money. The assessee, named as a flat booker, had their assessment reopened, and the AO added Rs. 7 lakhs as unexplained on-money, which was confirmed by the Ld. CIT(A).
Held
The Tribunal found that the assessee booked the flat after the search on the developer and the booking was subsequently cancelled with a full refund. As the transaction occurred post-search, the alleged on-money could not be attributed to the assessee. Consequently, the addition was deleted.
Key Issues
Whether an addition for alleged on-money is sustainable when the flat booking by the assessee occurred after the search action on the developer and was later cancelled and refunded.
Sections Cited
250, 69A, 234B, 234D
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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG
आदेश आदेश/O R D E R आदेश आदेश The above appeal has been preferred by the assessee against order passed by the Ld.Commissioner of Income-Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “ld.CIT(A)] dated 10.9.2025 under section 250 of the Income Tax Act, 1961 ("the Act" for short) for the assessment year 2013-14.
The assessee has raised the following grounds of appeal:
1. 1. 1. 1. The order passed by the Ld. CIT(A) is bad in law and deserves to be quashed, erroneous and contrary to the provisions of law and facts and therefore requires to be suitably modified. It is submitted that it be so held now. 1.1 The Id. CIT(A) has erred in passing the order without providing opportunity of hearing and there is violation of natural justice and therefore thee order passed be held to be bad in law. It is submitted that it be so held now.
2. The order passed by the Ld CIT(A) erred on facts and in law in confirming addition of Rs. 7,00,000/- made by the Ld. AO as undisclosed income of the appellant u/s 69A of the Act without any corroborative evidence on assumption, presumption and surmise. It is submitted that it be so held now.
2.1 The Ld CIT(A) erred in not appreciating the facts that learned A.O. has made addition without providing any corroborative evidence and in relying on the third-party statement behind the back of the appellant.
2.2 The Ld. CIT(A) has erred in summarily manner rejecting the contention of the appellant that Ld. A.O. has made addition without providing opportunity of cross examination of the person whose statement has been relied upon. It be so held now.
2.3 The Ld CIT(A) erred in not appreciating the facts that in the facts and circumstances of the case, there was no payment cash and the addition made merely on assumption and presumption deserves to be deleted. It be so held now.
2.4 The Ld CIT(A) erred in not appreciating the facts that booking of the flat was done by appellant much after the search carried out on developer and therefore the addition is complexly baseless and lack substance and deserves to be deleted. It be so held now.
2.5 The Ld. CIT(A) while adjudicating the issue of addition has relied on the decisions which would not be applicable to the facts of the appellant.
3. The Ld. CIT(A) has erred in confirming the action of the Ld. AO in charging interest under section 234B of Rs. 2,33,604/- and Rs. 56/- under section 234D of the Income Tax Act. It is submitted that it be so held now.”
Brief facts of the case are that a search and seizure action was carried out in the case of Dev Group which is engaged in the business of builders/real-estate developers. Pursuant to the said search action, the said developer approached the Settlement Commission, wherein, he offered Rs.80 crores, admitted to have been received as on-money from the various customers on account of booking/sale of flats etc.
Since the name of the assessee was mentioned as one of the persons who had booked the flats with the said builders, therefore, the assessment in the case of the assessee was also reopened.
3 Though, during the assessment proceedings, the assessee submitted that he has not paid any on-money to the builder, however, the AO did not agree with the above contention and made the addition of Rs.7.00 lakhs into the income of the assessee on account of on-money paid to the builder, the source of which was not explained. The ld.CIT(A) confirmed the addition so made by the AO.
Before this Tribunal, the ld.AR of the assessee has demonstrated that only amount paid by the assessee for the booking of the flat with the said builder was Rs.20.00 lakhs paid on 13.5.2014 which was after the date of search action on 3.1.2013. Even the said booking/ sale agreement was cancelled and the said amount was refunded by the builder to the assessee vide two cheque of Rs.10 lakhs each, dated 5.4.2021 and 9.4.2021. Since, in this case, the assessee had booked the flat after the date of search action, therefore, it is apparent that the amount offered by the builder on account of on-money received before the date of search action or found during the course of search action cannot be related to the assessee, as the assessee, for the first time, booked the flat after the search action.
In view of this, the impugned addition is not sustainable, and same is ordered to be deleted.
In the result, the appeal of the assessee stands allowed.
Order pronounced on 18th December, 2025.