TaxTMI 
TaxTMI 
2026 (5) TMI 1410
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....on the assessee. 3. During the course of assessment proceedings, the Assessing Officer noted that there was information that the purchase value of property declared by the assessee along with income offered under section 56(2)(x) was substantially less than the value adopted by the Stamp Valuation Authority. Accordingly, notices under section 142(1) dated 04.11.2021 and 26.11.2021 were issued calling for details such as purchase deed, source of payment and supporting evidences for deductions claimed. Initially, no compliance was made by the assessee. 4. Subsequently, in response to notices issued through the Verification Unit, the assessee furnished computation of income, inflow-outflow statement, bank account statement of Central Bank of India, proof of deduction under section 80C and copy of the "Permanent Alternate Accommodation Agreement". On perusal of the said agreement, the Assessing Officer observed that the document did not mention the value of the property or the stamp duty value. However, it was noted that the assessee had made payment of Rs. 1,00,00,000/- to the developer M/s Sanghvi Parsssva Enterprise LLP and Rs. 25,00,000/- to the outgoing tenant Shri Jayesh Ch....
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....acting provisions of section 56(2)(x). It was also contended that the Assessing Officer had wrongly relied upon information from the Insight Portal without establishing the actual nature and value of the property. 11. The Ld. CIT(A) examined the Permanent Alternate Accommodation Agreement and noted that the assessee, along with his wife, had entered into an agreement with the developer, owner and outgoing tenant for redevelopment of property and relocation of tenants. It was observed that the assessee paid Rs. 25,00,000/- for acquisition of tenancy rights and Rs. 1,00,00,000/- for allotment of additional area. 12. The Ld. CIT(A) further noted that the bank statements and cash flow statements demonstrated that the payments were made through banking channels and there was no evidence of unaccounted cash transactions. Accordingly, it was held that the assessee had satisfactorily explained the source of investment and the addition of Rs. 1,25,00,000/- under section 69 was deleted. 13. With regard to the addition under section 56(2)(x), the Ld. CIT(A) observed that the Assessing Officer had not established the exact nature of the property or the applicability of stamp duty valu....
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....essee without properly considering the remand report and without appreciating the deficiencies pointed out by the Assessing Officer during the assessment proceedings. In this regard, the Ld. DR drew our attention to the specific findings recorded by the Assessing Officer in the assessment order in para 6. The Ld. DR submitted that the Assessing Officer had specifically called upon the assessee to explain the source of the cheque deposits which were utilised for making payment to the developer, and the assessee had failed to discharge the onus cast upon him during the assessment proceedings. It was thus contended that the Ld. CIT(A), without ensuring proper verification of the source of such funds and without addressing the concerns raised by the Assessing Officer in the remand proceedings, has erroneously accepted the assessee's explanation merely on the basis of bank entries and thereby deleted the additions. The Ld. DR further invited our attention to the relevant clauses of the "Permanent Alternate Accommodation Agreement", particularly clause "L", to contend that the payment of Rs. 1,00,00,000/- was not merely towards transfer of tenancy rights but was in the nature of consider....
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....ds. 19. The Ld. AR further invited our attention to the remand proceedings initiated by the Assessing Officer and the corresponding reply filed by the assessee, as placed in the paper book at pages 157 to 172. Referring to the remand notice issued by the Assessing Officer dated 10.01.2024, it was submitted that the Assessing Officer had specifically called upon the assessee to submit relevant documents for verification in connection with the remand report to be furnished before the Ld. CIT(A). In response thereto, the assessee had duly filed a detailed reply through the e-proceedings portal. The Ld. AR pointed out that in the said reply, the assessee had categorically stated that he was submitting the following documents: * Reply to show cause notice as called by the Assessing Officer * Proof of payment of Rs. 1.25 crore along with complete source thereof * Copy of the Permanent Alternate Accommodation Agreement * Copy of Clause 12 of the said agreement * Computation of total income 20. It was further submitted that along with the above reply, the assessee had also furnished comprehensive documentary evidences including bank statem....
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....sactions are clearly verifiable from the bank account statements of the appellant, his wife and the HUF... All the payments to the developers have been made through cheques and banking channels... Had the transactions been done through some unaccounted means such as cash deposits, the same could be considered as unexplained. However, the bank account statements clearly indicate that there is nothing suspicious about the transactions..." "The bank account statements were admitted as additional evidence and yet the AO, in remand report, failed to consider the transactions done by the appellant and his wife through banking channels... The nature and source of funds used for making the payments are self-explanatory and hence, the appellant has discharged the onus of explanation... the addition of Rs. 1,25,00,000/- u/s 69 is deleted." 25. From the above findings, it is evident that the Ld. CIT(A) has not granted relief merely on technical grounds but after examining the evidences placed on record and after calling for remand report. We further note that the record clearly demonstrates that: i. The assessee had filed application under Rule 46A along with documentary ....
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...." "In this state of inconclusiveness, the AO ought to have referred the valuation... However, the AO... merely relied on the information received from Insight Portal..." "It is not possible to conclude to which property the amount of Rs. 2.585 crore pertains to. Hence, the benefit of doubt shifts towards the appellant... the addition of Rs. 1,33,50,000/- is not sustainable..." 29. From the above, it is clear that the Ld. CIT(A) has examined three crucial aspects: i. Nature of transaction (tenancy vs transfer) ii. Absence of conclusive valuation evidence iii. Failure of the AO to establish applicability of section 56(2)(x) 30. We further note that the Ld. CIT(A) has specifically dealt with the nature of agreement and recorded that the transaction arises out of redevelopment arrangement involving tenancy rights and allotment of alternate accommodation. The Ld. CIT(A) has also taken note of the fact that the agreement does not clearly specify stamp duty value of the subject property, the extent and nature of additional area is not determined, and the Assessing Officer has not carried out any independent valuation nor invoked provision....