MAMTA PATEL, RAIPUR,RAIPUR vs. ACIT, CIRCLE-1(1), RAIPUR, RAIPUR

The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 11.09.2025 for the assessment year 2020-21 as per the following grounds of appeal:

Brief facts in this case are that the assessee had purchased one unit Flat i.e. E-802 at Wallfort Heights, Bhatagaon, Raipur from Chhattisgarh Project (India) Pvt. Ltd. There was search and seizure action carried out in the case of Wallfort Group and others who are the owners of the said Chhattisgarh Project (India) Pvt. Ltd. on 03.11.2023. During the course of search proceedings various evidences were found which revealed that the group had indulged in tax evasion by carrying out sale of flats/plots in cash to various buyers and the same has not been offered to taxation. One such evidence was an excel sheet named WH 2020 NOT REG.xlsx which was retrieved from email id of one of the director of the said Wallfort Properties Pvt. Ltd. namely, Shri Pankaj Lahoti who is also a director in Chhattisgarh Project (India) Pvt. Ltd. The A.O writes in the assessment order that analysis of the said excel sheet revealed that the group has received cash in addition to consideration price reported in registry of various units sold in the Wallfort Height project of the group and hence, this cash forms part of the revenue of the group which has not been disclosed to the department for taxation. The A.O observed and held that since this Wallfort Heights project is part of Chhattisgarh Project (India) Pvt. Ltd. and the assessee viz. Mamta Patel had purchased one unit flat from the said company, therefore, it is ascertained that the assessee has also indulged in the cash transaction and accordingly, the A.O held as follows: “8. As per discussion made above, it is clear that the assessee has made payments in cash amounting to Rs.5,07,690/- during the year under consideration for purchasing property-E802 in Wallfort Heights. le aforesaid findings of cash payment cannot be denied which have already been accepted by the Wallfort group as a result of search & seizure action. Since the assessee has failed to provide the source of cash payments of Rs.5.07 600/- for purchasing of immovable property, therefore provision of section 69 is attracted in the case of the assessee.”

Similarly, the Ld. CIT(Appeals)/NFAC had upheld the said addition by observing as follows:

At the time of hearing, the Ld. Counsel for the assessee vehemently contended that they have purchased a flat unit from the said Chhattisgarh Project (India) Pvt. Ltd. which is part and parcel of the Wallfort Group. However, the assessee had paid entire amount of money of sale consideration through banking channels. In this regard, it was also submitted by Ld. Counsel that they had furnished all the relevant evidences before the A.O and the said evidences were even there on record before the Ld. CIT(Appeals)/NFAC. Demonstrating the same, the Ld. Counsel brought to the notice of the Bench at Page 4 of the paper book, wherein, they had filed bifurcation of the entire amount and the same is extracted as follows:

The aforesaid document forms part of the submission of the assessee made before the Ld. CIT(Appeals)/NFAC. It is discernable from the afore-stated that the alleged cash payment of Rs.5,07,690/- by the A.O as per excel sheet exactly matches with the RTGS transaction of Rs.5,07,690/-, which therefore, was clear evidence before the Revenue authorities that no cash payment was involved.

The Ld. Counsel also had filed the copy of the bank statement of UCO Bank, Telibandha Branch, in which, it is clear that the assessee had made RTGS to the said company i.e. Chhattisgarh Project (India) Pvt. Ltd. amounting to Rs.5,07,748.42 on 22.07.2019. The same is extracted as follows:

The Ld. Counsel for the assessee has also brought on record in the paper book at Page 87, the confirmation from Chhattisgarh Project (India) Pvt. Ltd. which reads as follows:

On perusal of the aforesaid confirmation, it is crystal clear that Vendor Company has received an amount of Rs.5,07,690/- in their bank account from purchaser/assessee and furthermore, in respect of this amount, the confirmation reveals that the vendor has not received any cash from the assessee/purchaser. That in spite of this document being filed before the A.O just on the basis of the excel sheet document which was found during the course of search on third party premises i.e. in the premises of Wallfort Group, the A.O has arbitrarily made the addition in the hands of the assessee contending cash payments. None of the authorities has brought on record any direct evidence of cash payment by the assessee and what is the benefit which the assessee could get through such cash payment while purchasing flat unit, no such findings have been recorded either by the A.O or by the Ld. CIT(Appeals)/NFAC. It was the information that was gathered by the department through search in the third party premises and how that is related to the assessee for making such addition, there is no reasoning or evidence to substantiate the same in the orders of the revenue authorities.

On contrary, the assessee had furnished before the A.O confirmation from the vendor company that they have not received any cash from the assessee and that they have got entire money through banking transaction. In fact, the bank statement of the UCO Bank, Telibandha Branch, Raipur of the assessee that clearly shows RTGS of the said amount which was inadvertently added by the A.O stating it to be a cash payment. The mistake committed by the A.O was further carried on by the Ld. CIT(Appeals)/NFAC without adhering to the provisions of Section 250(4) & (6) of the Act and without any enquiry or verification of the facts, the said authority has summarily and arbitrarily upheld the addition without independent application of mind. This is more strange, when all evidences have been furnished by the assessee demonstrating no cash payment and the assessee had filed bank statements, confirmations, in such case the reasons are best known to the Revenue for making additions in the hands of the assessee alleging cash payments even without any corroborative evidence placed on record, such an order becomes inherently perverse, arbitrary and bad in law. Accordingly, I set- aside the order of the Ld. CIT(Appeals)/NFAC and direct the A.O to delete the additions from the hands of the assessee while providing appeal effect of this order.

Before parting, it is also observed that search had taken place in third party premises wherein the informations were collected by the department regarding the assessee, in such scenario, the issue is no more res-integra for applicability of correct provision while framing assessment which should be u/s. 153C of the Act. In this case, the assessment had been completed u/s. 147 of the Act. However, since the matter has been adjudicated on merits itself, therefore, this Bench does not find any justification to travel further on this legal issue which is hereby rested.

As per the above terms, grounds of appeal of the assessee stands allowed.