2026 (5) TMI 50

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.... 4. 5650/Del/2025 2023-24 -Do- -Do- 143(3) of the Act 2. Since all the appeals filed by the respective assessee are having common, identical and similar issues, therefore, they are decided by a common order. 3. First we take appeal of the assessee in the case of Sandeep Kapoor in ITA No. 5647/Del/2025 [Assessment Year 2021-22]. ITA No. 5647/Del/2025 [Assessment Year 2021-22] [Sandeep Kapoor] 4. Brief facts of the case are that the assessee had e-filed his return of income u/s 139(1) on 15.03.2022, declaring total income of INR 2,18,58,700/-. The assessee is Director of M/s. Kapoor Waters Company Ltd. and a search and seizure action was carried out u/s 132 on 31.10.2022 on Johnson Watch & Kapoor Watch Group of cases and residential premises of the assessee was also covered. During the course of search, various loose papers and incriminating material were found and seized based on which the AO recorded the satisfaction and after obtaining the approval of Competent Authority, case of the assessee was re-opened by issue of notice u/s 148 on 16.05.2023. In response thereto, assessee filed return of income on 14.06.2023, declaring same income as was declare....

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....as part of sale consideration for the purpose of computing the income under the heard "Income from Capital Gains" and cannot be taxed u/s 69A of the Act as unexplained money. Ld. AR further submits that the source of the said money is explained as received from the buyer of the property and thus the provisions of section 69A are not applicable. He prayed accordingly. 11. On the other hand, Ld. CIT DR for the Revenue vehemently supported the orders of the lower authorities and submits that the assessee has received on money in cash from the sale of immovable property which was not disclosed in the regular books of accounts and therefore the same is unexplained money as per section 69A of the Act and requested for the confirmation of the action of AO in making the addition of the said sum u/s 69A of the Act. 12. Heard the contentions of both the parties at length and perused the material available on records. It is not in dispute that the assessee alongwith two other joint owners had received 'on money' of Rs. 67.00 lacs in cash in addition to the sale consideration declared in registered Sale Deed. Thus, the same cannot be deleted. However, it is observed that the AO made the ....

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....tant conditions to trigger the applicability of section 69A of the Act is that the assessee is found to be the owner of money, bullion, etc. or other valuable article in the financial year. The initial burden is on the Assessing Officer to establish that the assessee is the owner of the unexplained asset. This must be based on facts and evidence, not mere suspicion or presumption. Once ownership and non-recording are established, the burden shifts to the assessee to provide a satisfactory explanation for the asset's source. If the explanation is reasonable and supported by evidence, no addition should be made. 15. In the instant case, as observed above, there is no dispute that the said amount was received as a part of sale consideration and the identity of the seller is also disclosed thus it cannot be said that the source of this sum is not explained, rather the AO himself has observed that assessee has received this cash from the buyer thus the source is duly accepted by the AO. Once the source is established, provision of section 69A cannot be invoked for making addition of sale consideration received over and above the declared sale consideration in cash. 16. It is f....

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....nded that the same should be treated as part of the sales consideration and should be added to the Capital gains declared by the assessee from the sale of subject property under the head "Income from Capital Gains". 21. Before us, both the parties have agreed that the issue in hand is identical with the issue in ITA No.5647/Del/2025 for Assessment Year 2021-22 where under identical circumstances, the on moony received by the assessee was treated as unexplained money u/s 69A of the Act by the AO. While deciding the aforesaid appeal of the assessee in ITA No.5647/Del/2025, we have held that the on money received by the assessee should be treated sale consideration and should be taxed under the head "Income from capital gain" and not u/s 69A of the Act. Since facts are same, thus, by following the aforesaid observations in ITA No.5647/Del/2025 which are Mutatis Mutandis applicable to the facts of present case also, we direct the AO to recompute the income from Capital gains by including the on money of 36,66,666/- in the total value of sales consideration and charge tax as per the rates prescribed under the Act. The, Ground of appeal No.2 raised by the assessee is thus partly allow....