TaxTMI 
TaxTMI 
2026 (6) TMI 338
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.... 2. The Ld. CIT(A) has dismissed the appeal without considering the facts and circumstances of the case. 3. The Ld. CIT(A) has erred in sustaining the additions made by the Ld.AO u/ s. 56 of the Act. 4. The Ld. CIT(A) erred in sustaining the additions even though the provisions of sec.56 will not be applicable to the present case of the appellant. 5. The Ld. CIT(A) ought to have observe the fact that the Ld. AO has not bought any corroborative evidence on record and made addition of Rs. 50,00,000/-, and therefore the additions made are bad in law. 6. The Ld. CIT(A) ought to have observe the fact that the Ld. AO has erred in sustaining the addition merely on the basis of Tally data found during the search, without establishing that such data constituted incriminating material showing undisclosed income of the appellant. 7. The Ld. CIT(A)ought to have observe the fact that the Ld. AO has erred in making the addition without considering the submissions made by the Appellant and the failure to consider such submission is not valid. 8. The Ld. CIT(A) ought to have observed that the Ld. AO has not offered to cross-examine the witnes....
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....y corroborative evidence on record. Further, the Ld. AR invited our attention to the copy of the JDA placed in the paper book, particularly referring to the relevant clauses placed at page no. 34 of the paper book, and submitted that as per the terms of the JDA, the assessee has not received any monetary consideration. It was submitted that the consideration agreed between the parties is in the form of built-up area receivable in future. The Ld. AR further invited our attention to the seized document reproduced by the Ld. AO at page no. 4 of the assessment order and submitted that the said document is merely a dumb document found from the premises of the developer. He submitted that the said document does not bear the signature of the assessee, nor does it contain any acknowledgment of receipt of cash by the assessee. The Ld. AR further submitted that during the course of statement recorded under section 131 of the Act on 02.02.2023, the assessee has categorically denied having received any cash from the developer. He submitted that despite such categorical denial, the Ld. AO has proceeded to make the addition without bringing any material to contradict the statement of the assesse....
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....taxable capital gains unless conditions of transfer are satisfied. It was thus contended that the addition made by the Ld. AO under an incorrect head of income and without determining the correct year of taxability is not sustainable in law and is liable to be deleted. Accordingly, the Ld. AR prayed that the addition made by the Ld. AO be deleted. 7. Per contra, the Learned Departmental Representative ("Ld. DR") strongly supported the orders of the lower authorities. The Ld. DR submitted that the seized document clearly evidences payment of Rs. 50,00,000/- by the developer to the assessee. He submitted that the document contains complete details including the name of the payer, name of the recipient, date, and amount of payment. The Ld. DR contended that in view of the detailed nature of the entries in the seized document, the same cannot be treated as a dumb document. He further submitted that the existence of the JDA corroborates the transaction reflected in the seized document and therefore no further corroboration is required. He also submitted that the reliance placed by the assessee on the decision of the Tribunal in the case of SVS Projects India Pvt. Ltd.(Supra) is mispl....
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....m seized tally data. 11. On perusal of the above, we find that the assessee has categorically denied having received any cash from the developer. We further find that the seized document does not bear the signature of the assessee, nor is there any acknowledgment or receipt evidencing actual receipt of cash. We also find that the Ld. AO has not brought on record any independent evidence to establish the movement of cash from the developer to the assessee. No corroborative material such as bank withdrawals, confirmation, or any cash trail has been brought on record. We have gone through para no. 15 of the order of the Coordinate Bench of this Tribunal in the case of SVS Projects India Pvt. Ltd. (Supra), which is to the following effect: "15. We have gone through the relevant arguments of learned counsel for the assessee and we found that, the additions made by the AO are on the basis of documents found from the premises of a third party. It is a well- established principle of law by the decisions of various Courts that the documents found from the premises of a third party, the rebuttable presumption as per ITA Nos.2139 to 2141 and 2358 to 2360/Hyd/2025 S.V.S. Projects I....
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.... transaction of cash received by the assessee. Therefore, a mere entry in a loose sheet/document found unsigned from a third party in the absence of any corroborative evidence cannot be a basis for the addition in the hands of the assessee. Accordingly, respectfully following the order of the Tribunal, we hold that in the present case also, the presumption under section 132(4A) read with section 292C of the Act is not applicable in the hands of the assessee. Therefore, in the absence of corroborative evidence, the addition made by the Ld. AO solely on the basis of third-party material cannot be sustained. Accordingly, ground nos. 5 to 7 of the assessee are allowed. 13. Further, as far as the alternate argument of the assessee is concerned, we also find merit in the alternative contention of the assessee. The assessee has raised an alternative legal argument under Ground Nos. 3 and 4. The Ld. AR has submitted that even assuming, without admitting, that any amount was received, the same cannot be taxed under section 56 of the Act. In this regard, we have gone through the JDA placed at page nos. 34 to 66 of the paper book and on perusal of the same, we find that the assessee has en....
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....e with law. We have also gone through para nos. 8 and 9 of the decision of the Coordinate Bench in the case of Sahodhar Reddy Vs. DCIT (Supra) relied upon by the Ld. AR, which is to the following effect: 8. On a perusal of the above, we find that Shri Manohar Reddy Cheruku was also one of the landowners and party to the same JDA. We further observe that the facts of the present case are identical to the facts involved in the case of Shri Manohar Reddy Cheruku vs. DCIT (supra). In this regard, we have also gone through para nos. 7 and 8 of the order of the Tribunal in the case of Shri Manohar Reddy Cheruku vs. DCIT (supra), which is to the following effect: "7. We have considered the rival submission and perused the material available on record. The Ld. AR has contended that the assessee had not received any consideration whatsoever during the year of JDA and the possession, if any, was handed over only for the limited purpose of facilitating the developer to undertake construction, and not in the nature of possession contemplated under section 2(47) of the Act read with section 53A of the Transfer of Property Act. Therefore, the Ld. AR has argued that no taxable e....
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....over under Section 53A of the Transfer of Property Act, 1882. Therefore, the aforesaid decision also has no application to the fact situation of the case." 8. On a perusal of the above, we find that the Hon'ble High Court after considering the judgment in Potla Nageswara Rao (supra), has held that unless consideration is received or accrues to the assessee, or unless possession is handed over in the manner contemplated under section 53A of the Transfer of Property Act, no transfer can be said to have occurred for the purpose of section 45 of the Act. In the present case, the revenue has not brought on record any material to show that the assessee received any consideration, monetary or otherwise, during the year of execution of JDA; or the assessee handed over possession to the developer otherwise than for the limited purpose of development. In absence of such essential conditions, the very foundation of invoking section 45(1) of the Act in the year of JDA fails. Respectfully following the binding judgment of the Hon'ble Telangana High Court in the case of Smt. Shantha Vidyasagar Annam vs. ITO (supra), we hold that no taxable capital gains arise in the hands of the....