TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1683
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....come tax, Central Circle-5(1), Mumbai (for brevity, the "Ld. AO"), passed under section 153C of the Act. 2. The revenue has raised the following grounds of appeal: 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 3,58,00,000/- made by the assessing officer u/s 69A as alleged on money received on sale of flats, without considering the facts and circumstances of the case that there was sufficient incriminating material in the form of loose papers, excel sheet entries and statements recorded during the search and post search proceeding to establish that the assessee has received cash over and above the value as per the sale deed? 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the assessing officer u/s 69A of the Act on account of alleged on money received on sale of flats without considering his/her own findings in the same order whereby the contention of the assessee in challenging the authenticity and credibility of incriminating material in the form of loose papers, excel sheet entries, WhatsApp Chats and statements recorded dur....
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....s over and above the registered sale values of three flats. Finally, the Ld. AO confirmed amount to Rs. 3,58,00,000/- U/s 69A of the Act r.w.s. 115BBE of the Act. and framed assessment U/s 153C of the Act. The aggrieved assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) allowed the appeal of the assessee and deleted the addition. The Ld. CIT(A) rejected the assessee's contention that action u/s 153C of the Act, but the appeal was allowed on merit. Being aggrieved the revenue filed an appeal before us. The assessee has not filed any cross-objection or cross-appeal in respect of this issue in response to the revenue's appeal. Hence, the Ld. AR of the assessee in accordance with Rule 27 of the Income Tax Appellate Tribunal Rules, 1962 submitted letter dated 28-05-2025 filed on 29-05-2025 which is reproduced as below: - "1) A search and seizure action u/s 132 of the Act was conducted by DDIT(Inv.), Unit 4(4), Mumbai in the case of 'RPS Infraprojects and others' Group on 15-11-2019 The Search & Seizure action in case of 'RPS group' also includes search and seizure in case of Shri Tarun Vohra (one of the partners of Serene Value Homes LLP which in turn partner ....
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....hus, the data mentioned in the table mentioned above is full of errors and cannot be relied upon. Flat no.701: The value against flat no. 701 mentioned in the above table are incongruous and the figures mentioned is flawed. The flat registered is above the respective value adopted by the State Government for the purpose of stamp duty and hence, the said transaction is in compliance with the provisions of the section 43CA of the Act. The above table is divergent from actual fact and hence should not be considered of any value. To justify these facts, the documentary evidence was submitted during the course of Assessment Proceedings, which is also being enclosed herewith: a) Copy of Sale agreements for sale of flat No. 901 (Enclosed at page no.60-131 of PB) b) Copy of Cancellation Deed for Flat No.901 (Enclosed at page no.132-233 of PB) c) Copy of Sale Agreements for Sale of Flat No 801 (Enclosed at page no.234-307 of PB) d) Copy of Ledger Account of the Parties for Sale of Flat No. 901,801 & 701(Enclosed at page no.308-310 of PB) e) Copy of Bank Statements highlighting the receipts for Sale of Flat Nos. 901, 801 & 701 (Enclosed at page no.311-333 of PB)" 3. The Ld. DR....
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....hown in the whatsapp message as sales amount for flat no.801, it was actually Rs. 2.30 crores. Thus, there are material differences in the facts and figures. The appellant has admitted that the sim card was registered in the name of Shri Tarun Vohra; yet it has been explained that it was used for various online classified weblistings and the messages received therein are of doubtable veracity. The statement of Shri. Tarun Vohra recorded during the course of search on 06.11.2019 shows that he has repeatedly denied having accepted cash or having knowledge of such document. He has also stated that he is not involved in day to day operations and is not aware of the sheet. Although has stated in qn.no.11 that "the payment is made through banking and some cash may also be accepted", he has clarified the same in reply to qn.25 that he was referring to initial bookings of Rs. 11,000/- to Rs. 15,000/-. It is also noted that not all the flats are sold as per the whatsapp chat I excel sheet. Seen in this background, the appellant's claim does seem plausible. 4.27. In the case of ACIT vs Grasim Industries Ltd in ITA No.1519/Mum/2002 for AY 1992-93 dated 17.11.2006, (https://indiankanoon.....
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....rified WhatsApp message extracted from a mobile phone number that is not directly associated with the operational team of the assessee. The individual concerned, Shri Tarun Vohra, has categorically denied any knowledge of the document and clarified that the references to cash therein pertained merely to token booking amounts. The assessee has duly furnished comprehensive documentary evidence substantiating its claim, including sale agreements, cancellation deeds, and corresponding banking transactions. It is also pertinent to note that all transactions were executed at values exceeding the stamp duty valuation and were fully compliant with the provisions of section 43CA of the Act. Upon a careful appraisal of the facts and the evidentiary material on record, we observe that the WhatsApp message relied upon by the Ld. Assessing Officer was retrieved from the mobile device of Shri Tarun Vohra, who was subjected to a search. However, the revenue has failed to bring on record any corroborative material to substantiate the contents of the said message. The impugned document has neither been affirmed by any independent inquiry nor confirmed by any of the parties named therein. In the abs....
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....in regular course of business and thus lack in required reliability to be made the foundation of a police investigation." Further reliance has been placed on the decision of the Coordinate Bench of the ITAT Mumbai 'F' Bench in ACIT v. Jayant Hiralal Shah, ITA No. 4477/Mum/2024, date of pronouncement 06.12.2024, wherein it was held: "17. We heard the parties and perused the record. We notice that the AO has made addition on the basis of whatsapp chat between Shri Shailendra Rathi and Shri Nilesh Toshniwal. However, the assessee has denied those transactions. The AO, however, proceeded to make the additions of Rs. 1.05 crores and Rs. 1.00 crore based on the third party evidences. We notice that the assessee has claimed that the date of whatsapp chat relating to Rs. 1.05 crores was 11.03.2021, while the AO has taken the date as 11.3.2020. Hence, there is confusion about the date of the alleged transaction relating to Rs. 1.05 crores. With regard to the amount of Rs. 1.00 crore, the whatsapp chat shows that Shri Shailendra Rathi has only requested Shri Nilesh Toshniwal to pay Rs. 1.00 crore to the angadia Shri Vinod, meaning thereby, there is no proof that the said transacti....
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...., in the absence of any independent supporting evidence, cannot constitute a valid basis for initiating proceedings under section 153C of the Act. Accordingly, the addition made under section 69A of the Act pursuant to the assessment framed under section 153C is hereby quashed. Since the assessee has succeeded on the legal ground, the issue on merits is left open for academic consideration. In the result, the appeal filed by the revenue stands dismissed. 8. In the result, the appeal of the revenue bearing ITA No. 3106/Mum/2023 is dismissed. ITA No. 3108/MUM/2023 (Assessment Year: 2019-20) & ITA No. 3109/MUM/2023 (Assessment Year: 2018-19) 9. Both the appeals were filed by the revenue as against the orders of the Ld. Commissioner of Income Tax (Appeals) - 53, Mumbai [for brevity, the "Ld. CIT(A)"] order passed U/s 250 of the Income tax Act, 1961 (for brevity, the "Act") on dated 09.06.2023 for AY 2018-19 & 2019-20. The impugned orders emanated from the order of the Ld. Dy. Commissioner of Income Tax Central Circle 5(1), Mumbai [for brevity the "ld. AO"], order passed under section 153C of the Act, date of order 30/03/2023. 10. Both the appeals have same nature of fact & comm....
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.... and seized. On verification of the seized documents, information regarding financial transactions pertained to M/s. Sarvapriya Leasing Pvt Ltd was noticed. Thereafter, the case of the assessee was selected for scrutiny u/s 153C r.w.s. 153A of the Act and notice u/s 153C of the Act was issued on 21.04.2022. In response, the assessee has filed return of income on 06.06.2022 declaring total income at Rs. 4,38,98,690/-. The assessee is engaged in the business of development of residential units under a redevelopment scheme. The assessment u/s 153C of the Act was finalized on 31.03.2023 and total income was assessed at Rs. 7,31,00,700/- after making addition of Rs. 1,49,92,100/- under section 69A of the Act & Rs. 1,42,09,910/- u/s 69C of the Act on the ground that assessee had received cash over and above the agreement value on sale of flats and brokerage paid in cash respectively. The Ld. AO observed that assessee has failed to explain the contents on loose papers or produce documentary evidence of payment not received in cash. The Ld. AO further stated that on verification of the loose papers, it is found that the assessee has worked out brokerage on the sales value of the flat to va....
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.... in the project which means Rs. 2,12,50,000/- has been adjusted against the brokerage of Mr. Vicky Wadhavani. In view of the above, brokerage of Rs. 1,18,34,548/- (Rs.2,12,50,000-Rs.94,15,452) (As brokerage of Rs. 43,15,000 disallowed separately in Ekjyot Properties for AY 2019-20) (As brokerage of Rs. 51,01,452/- disallowed separately in relevant AY's of the assessee) added to the total income. The Ld. AO relied solely on the contents of the loose papers which was found during the course of search in the case of Shri Tarun Vohra. During the course of search contents of the loose papers duly explained by Mr. Dheeraj Vohra while recording of his statement u/s 132(4) of the Act in reply to Question No. 32. Further, during the assessment, the assessee submitted before the AO that a marketing staff member of M/s. Sai Estate Consultants Chembur Private Limited had visited the office of the assessee and had dropped the said chart showing the projected sales he would procure and the brokerage payable to him @2% of the sale price. The assessee submitted that the estimated realizable value of 8 flats was Rs. 11.88 crores, whereas the actual sale consideration received was Rs. 10.71 crores, ....
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.....05.2019 against the sales and marketing fees to be received from Sarvapriya Leasing Pvt Ltd. Further, one more shop No.1, A-Wing in Raj Ekjyot Sukriti Building was given to Mr. Vicky Wadhavani for a consideration of Rs. 1,80,00,000/- vide agreement dated 27.08.2019. The above office and shop are transferred to Mr. Vicky Wadhavani against the total amount due from Mr. Vohra for commission/brokerage of Rs. 3,10,10,497/-. 14. The Ld. AR argued that the assessee has transferred one office and one shop to Mr. Vicky Wadhavani of Rs. 2,45,00,000/- and Rs. 1,80,00,000/- totaling to Rs. 4,25,00,000/-. As the Sarvpriya Leasing Pvt. Ltd. has 50% shareholding in the project which means Rs. 2,12,50,000/- has been adjusted against the brokerage of Mr. Vicky Wadhavani. In view of the above, the brokerage of Rs. 1,18,34,548/- (Rs.2,12,50,000-Rs.94,15,452) (As brokerage of Rs. 43,15,000 disallowed separately in Ekjyot Properties for AY 2019-20) (As brokerage of Rs. 51,01,452/- disallowed separately in relevant AY's of the assessee) paid in lieu of the office and shop should not be disallowed and added to total income of the assessee. Aggrieved assessee filed before the Ld. CIT(A). The Ld. CIT(A) ....
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....oney under question.". On account of the same reasoning, the addition of Rs. 1,18,34,548/- u/s. 69C is not sustained. D.12. Besides, the AO noted that Mr. Kishor D Soda had booked a flat measuring 68.08 square meters for Rs. 1,68,21,000/- whereas Shri Amit Bhagwan Wadhwani had booked a flat for same measurement at Rs. 1,40,00,000/-. Accordingly, after a discussion on this issue, the AO was of the view that the appellant had accepted cash of Rs. 28,21,000/- over and above the agreement value. For the reasons mentioned in the preceding para and also that an addition cannot be made on presumptive basis, this addition of Rs. 28,21,000/- u/s. 69A also stands deleted." 15. The Ld. CIT(A) rejected the assessee's contention that action u/s 153C should not have been taken based on the loose papers, which do not have any evidentiary value, but the appeal was allowed on merit. Being aggrieved the revenue filed an appeal before us. The assessee has not filed any cross-objection or cross-appeal in respect of this issue in response to the revenue's appeal. Hence, the Ld. AR of the assessee in accordance with Rule 27 of the Income Tax Appellate Tribunal Rules, 1962 submitted letter dated 28-05....
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....in motion against important constitutional functionaries on the basis of fictitious entries, in absence of cogent and admissible material on record, lest liberty of an individual be compromised unnecessarily. We find the materials which have been placed on record either in the case of Birla or in the case of Sahara are not maintained in regular course of business and thus lack in required reliability to be made the foundation of a police investigation. 18. The Ld. AR further respectfully relied in the case of Hon'ble Supreme Court in the case of Commissioner of Income Tax (Appeals) 11 Bengaluru & Ors. v. Sunil Kumar Sharma, SLP Diary No. 21526/2024, dated 20-08-2024, wherein it has been held as under: "Section 153C, read with section 153A, of the Income-tax Act, 1961 - Search and seizure - Assessment of any other person (Recovery of loose sheets of paper) - Assessment years 2012- 13 to 2018-19 - High Court held that it is established in law that a sheet of paper containing typed entries and in loose form, not shown to form part of books of account regularly maintained by assessee or his business entities, do not constitute material evidence and, therefore, action taken by re....
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....In response, M/s. Sai Estate Consultants categorically denied having accrued or received any commission income from the assessee during F.Y. 2013- 14 to F.Y. 2019-20 or having raised any invoices towards such brokerage. Similarly, Sai Estate Consultants Chembur Pvt. Ltd., where both Shri Amit and Shri Vicky Wadhwani are directors, also denied receipt of any brokerage or commission. Regarding the reference to an FIR mentioned by the Ld. AO, the Ld. CIT(A), at paras 4.23 and 4.24 (page 61 of the appellate order), recorded the assessee's detailed submission, stating that there existed a dispute between the assessee and M/s. Sai Estate Consultant concerning dues on account of sale of shops/flats in a project named "Raj Ekjyot Sukriti." It was explained that the cheques issued by Sai Estate Consultant were dishonoured, leading the assessee to file a criminal complaint under section 138 of the Negotiable Instruments Act. The assessee had also initiated civil recovery suits before the Hon'ble Bombay High Court on 09.06.2022 and 30.08.2022. In retaliation, a counter-complaint was filed by Sai Estate Consultant. During the assessment proceedings, the Ld. AO again issued notice under section....