TaxTMI 
TaxTMI 
2025 (11) TMI 1902
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....rified and unexplained receipts of Rs. 1,56,00,000/-, as well as the validity of the assessment framed under section 147. Facts of the Case 2. The brief facts leading to the assessment are that no return of income was filed by the assessee for the assessment year 2019-20. Subsequently, the case of the assessee was flagged under the Risk Management Strategy on the Insight Portal of the Department on the basis of information indicating that the assessee had entered into significant financial transactions exceeding taxable limits during the relevant previous year. The information flagged related to alleged unaccounted investment in immovable property amounting to Rs. 48,89,877. The Assessing Officer has recorded that the material forming the basis of this information had been found in the course of a search under section 132 carried out in the cases of Shivalik, Shilp and Sharda Group on 10.02.2022, and that such seized material contained information pertaining to several other persons including the assessee. 3. The Assessing Officer stated that since the information was gathered from documents seized in a search conducted after 01.04.2021, the proviso to section 148A was att....
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....f the alleged actual cash. 6. The Assessing Officer has further noted that among the various projects reflected in the seized diaries and digital files, the project "Sky City Floris" of M/s Safal Goyal Realty LLP was one of them, and that the entries in a particular diary identified at page T-14, A-16 belonging to Book 3 contained a reference to a transaction concerning "Unit No. 84" of Sky City Floris. The Assessing Officer recorded that this entry showed the date of finalization of the deal as 14.12.2018, total consideration of Rs. 1,75,00,000/-, the buyer being "C.O. Parthivbhai", and the Registered Document value being Rs. 1,26,10,123/-. The Assessing Officer specifically noted that the names recorded in the Sub-Registrar Office documents were "Neepa Rajsheel Patel and Rajsheel Jitendra Patel" with respective PANs, and that the cash component reflected in the diary entry amounted to Rs. 48,89,877. On the basis of this diary entry, the Assessing Officer concluded that the assessee had paid an unaccounted cash component of Rs. 48,89,877/- towards purchase of Unit No. 84 in the project Sky City Floris. 7. The Assessing Officer held that this alleged cash investment was unexp....
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....09.01.2025 repeating the additions of Rs. 48,89,877/- under section 69 read with section 115BBE and Rs. 1,56,00,000/- under section 56, giving rise to the present appeal. 11. Aggrieved by the order of the Assessing Officer, the assessee is in appeal before us raising following grounds: 1. That on facts, and in law, the learned AO has grievously erred in making addition of Rs. 48,89,877/- u/s 69 of the Act in respect of alleged payment of On Money on the basis of directions given by Hon'ble Dispute Resolution Panel (DRP). 2. That on facts, and on evidence on record, the Hon'ble DRP has made factually incorrect observations on page 24, para 6.2.1 and on page 28, para 6.2.4 and para 6.2.5 of its order, as the appellant has specifically demanded cross examination of concerned person which is not given till date. 3. That on facts and in law, the learned AO has grievously erred in making addition of Rs. 1,56,00,000/- as alleged unexplained receipts which is admittedly received for sale of joint property. 4. That on facts, in law, and on evidence on record, the Hon'ble DRP has made incorrect and irrelevant observations on pages 32 and 33 of its order....
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....ns based solely on alleged on-money entries in third-party material were deleted. 14. Regarding the addition of Rs. 1,56,00,000/-, the AR submitted that the assessee and his wife, Smt. Neepa Rajsheel Patel, were joint holders of Row House No. 17 situated in the scheme known as Shyamal Row House. The property was originally purchased by Smt. Neepa R. Patel vide purchase deed dated 14.12.1994, and her name was duly entered in the society share certificate on 27.11.1994 through Resolution No. 8. The transfer was formally noted on 22.01.1995. The AR explained that clause 11 of the sale deed has been misunderstood by the AO. He submitted that the full sale deed, when read holistically, clearly establishes the joint ownership of the assessee and his wife. He specifically referred to page 3 of the sale deed where the names of both Neepaben Rajsheel Patel and Rajsheel J. Patel appear as "Second Part". The AR pointed out that clause 12 of the sale deed records that Smt. Neepa Patel had requested the Society to enter the name of her husband, Shri Rajsheel J. Patel, as joint holder of the property, and that the Managing Committee passed Resolution No. 4, dated 07.12.1995, unanimously appro....
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....ing the requirements of Section 2(47)(vi). Consequently, the assessee's receipt of Rs. 1,56,00,000/- represented sale consideration of his share in the property, taxable as long-term capital gain, as correctly offered. The AR further submitted that the assessee has already filed purchase documents for claiming deduction under Section 54, and the investment in specified bonds qualifies for deduction under Section 54EC, both being within the stipulated time limits. 16. The Departmental Representative (DR) relied on the order of lower authorities. 17. We have carefully perused the assessment order passed under section 143(3) r.w.s. 144C, the directions of the Hon'ble DRP, submissions made before us, and the material placed in the paper book. The addition of Rs. 48,89,877/- has been made exclusively on the basis of an excel sheet recovered from the electronic device of one Shri Manish Brahmbhatt, who is alleged to be a broker of the seller. The assessee repeatedly stated that Shri Manish Brahmbhatt was never appointed as a broker by the assessee, and no brokerage was paid. The Department asserts that the assessee's name appears in the excel sheet. However, it is equally an admitt....
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....e bench decision in Kiritkumar Champaklal Shah (supra), along with other judicial principles governing the evidentiary value of third-party loose sheets, we hold that the excel sheet found from the premises of Shri Manish Brahmbhatt is a third-party uncorroborated material. The mere appearance of the assessee's name in such a document does not establish payment of any on-money. The presence of an incorrect seller's name further destroys the reliability of the document. The Department has failed to produce any corroborative evidence to substantiate the alleged cash payment, and the denial of cross-examination of the alleged broker vitiates the entire assessment proceedings. Accordingly, Ground Nos. 1 and 2 are allowed. 21. Ground Nos. 3, 4 and 5 relate to the addition of Rs. 1,56,00,000/- treated as alleged unverified and unexplained receipts arising from the sale of an immovable property jointly held by the assessee and his wife, and the consequential denial of the assessee's claim for exemption under sections 54 and 54EC. The DRP, while affirming the addition, recorded observations to the effect that the assessee's claim under sections 54 and 54EC remained unverified. The asses....
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....56,00,000/- each. The buyer deducted TDS under section 194IA on the entire sale consideration and issued separate cheques as recorded in Clause 22 of the sale deed. These evidences directly contradict the Assessing Officer's finding that ownership and receipt were unverified. 24. The assessee also placed on record the purchase deed of the new residential property and proof of investment in specified bonds of NHAI within the statutory time limit for the purposes of sections 54 and 54EC. The DRP's observation that the claim remained unverified is contrary to record, as the assessee had furnished all requisite primary documents which were neither rejected nor disproved. Once the ownership, receipt of consideration, and investment of capital gains stand duly proved by registered documents and statutory certificates, the inference of "unverified and unexplained receipts" cannot survive. 25. We also note that the Assessing Officer has not invoked any particular sub-clause or charging limb of section 56, nor has he demonstrated how a receipt arising from a registered transfer of a capital asset, already subjected to capital gains computation, could fall within the ambit of section 5....