TaxTMI 
TaxTMI 
2026 (10) TMI 55
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..... 283/Mum/2026 and the appeal for A.Y. 2020-21 is IT(SS)A No. 284/Mum/2026. The reference to Appeal Nos. 383 and 384 in the written submission appears to be a typographical error. 2. The relevant background is that a search under section 132 of the Income-tax Act, 1961 ("the Act") was conducted on 15 January 2021 in the case of Bloomstrende Buildwell Pvt. Ltd. and others. The premises of Shri Amit Chauhan, a property broker, were also covered. Among the documents stated to have been found there was an "Agreement to Sell" concerning the assessee's property at B-130, Sector 44, Noida. The document is dated 25 November 2019 and purports to record a sale by the assessee to Smt. Mamta Wadhwa for a total consideration of Rs. 4.50 crore. It recites that Rs. 1 crore had been received by cheque No. 044495 dated 12 August 2019 and that the balance of Rs. 3.50 crore was payable by 30 November 2019. The document bears a signature in the vendor's execution space attributed to Shri Rajesh Yadav, stated to have acted for the assessee; it does not bear the assessee's personal signature, and the vendee's execution space is blank. The assessee disputes the signature attributed to Shri Yadav and h....
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....ed to Mumbai, he described the figure as an estimate or calculation. When confronted with another communication dated 2 December 2020, which the Assessing Officer read as referring to a figure of approximately Rs. 3.73 crore or Rs. 3.80 crore for the Noida property, he again described the figure as a future estimate. He also stated during the questioning that he had not paid any cash. However, when shown the separate WhatsApp communication dated 28 October 2020, which the Assessing Officer construed as giving a bifurcation of Rs. 3.83 crore in cash and Rs. 11 lakh by cheque for the Noida property, Shri Wadhwa acknowledged that the message was his but stated that he had no explanation for it at that time. His responses, therefore, are not uniform: he expressly denied cash payment and described some figures as estimates, but acknowledged authorship of the message upon which the Assessing Officer principally relied for the figure of Rs. 3.83 crore. 5. Shri Amit Chauhan's statement also refers to the transaction, but the figures and manner of payment attributed to him differ from those appearing in the purported agreement and from the account given by the proposed purchasers. When c....
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....r with Shri Chauhan's statement, to compute the alleged cash consideration at Rs. 3.83 crore. The material thus includes both the Assessing Officer's inference of actual payment and the explanations or denials given by the persons whose statements and messages were relied upon. 7. For A.Y. 2019-20, the Assessing Officer obtained information from Bank of India and found a credit of Rs. 11 lakh in the assessee's account on 27 February 2019. The bank identified the cheque as cheque No. 0267 drawn by Eight Petalled Lotus, the proprietary concern of Smt. Mamta Wadhwa. This credit preceded the purported agreement dated 25 November 2019 by about nine months; the agreement, in turn, refers to a different payment of Rs. 1 crore by cheque dated 12 August 2019. The Assessing Officer treated the Rs. 11 lakh credit as unexplained money under section 69A and added it to the assessee's returned income. The assessee's case in appeal is that the cheque was the advance paid during negotiations for the proposed transfer, that its source was identified, and that it was disclosed in her records and return. For A.Y. 2020-21, the Assessing Officer treated Rs. 3.83 crore as cash consideration allegedly....
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....ce received in negotiations and its treatment was governed by section 51 when the property was later transferred; he also relied on the property's subsequent sale to Smt. Varsha Singh. The learned counsel contended that the learned CIT(A) had not properly dealt with the statements, the discrepancies in the agreement and payment figures, the subsequent sale or the assessee's plea under section 51. The learned Departmental Representative supported the orders below, relying on Shri Chauhan's statement, the WhatsApp message dated 28 October 2020 and the fact that the buyer and her husband did not attend the offered cross-examination. The assessee has also raised objections concerning the notices under sections 143(2) and 153C, the opportunity and material furnished during assessment, and the invocation of section 69A. The merits issue is whether the evidence establishes, separately for each assessment year, that the assessee received or owned the amount brought to tax; the statements, agreement and electronic material must accordingly be considered together, including the portions that support and those that contradict the respective accounts. 10. We have considered the material on ....
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.... computing the cost of acquisition, of advance money received and retained during negotiations for transfer of a capital asset. The appellate order and the statements contain differing accounts as to whether the amount was later returned or retained; that question need not be determined in deciding whether the original cheque credit was unexplained. Its source and nature are established, and its appropriate subsequent treatment, if any, falls to be considered under the applicable provisions in the relevant year. The addition under section 69A is therefore deleted. 13. The addition of Rs. 3.83 crore for A.Y. 2020-21 rests principally on Shri Chauhan's statement and the WhatsApp communications between him and Shri Manish Wadhwa. We have not overlooked the communication dated 28 October 2020. Shri Wadhwa acknowledged that it was his message but, when confronted with the Assessing Officer's reading of it as showing Rs. 3.83 crore in cash and Rs. 11 lakh by cheque, stated that he had no explanation for the message at that time. This is an adverse circumstance and has been weighed. His acknowledgment establishes authorship of the message and his failure then to explain it; it does not....
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....heir denials. The assessment order also records that the assessee's representative did not avail himself of the opportunity to cross-examine Shri Chauhan. These circumstances have been taken into account; nevertheless, non-attendance does not, by itself, establish the amount, recipient or year of the alleged payment. The statement must still be assessed with the other material, and the inconsistencies and absence of particulars do not establish that Rs. 3.83 crore was delivered to the assessee during FY 2019-20. 16. The registered sale of the property to Smt. Varsha Singh in April 2023 also forms part of the record. We do not treat that subsequent sale, standing alone, as proof that no money could have been paid during earlier negotiations; a proposed transaction may fail even after a payment or advance. It does, however, support the assessee's case that the property was not conveyed to Smt. Wadhwa and remained available for transfer to another purchaser. Considered with the absence of a mutually executed or otherwise reliably established agreement with the Wadhwas, the discrepancy between the agreement's Rs. 1 crore cheque recital and the established Rs. 11 lakh credit, th....