AVYAA DEVELOPERS,SURAT V. THE ACIT, CENTRAL CIRCLE-1(3), AHMEDABAD

ITSSA 120/AHD/2024

AI Insights

The case involves a series of appeals related to the partnership firm Avyaa Developers and its partners, concerning the assessments made under section 153C of the Income Tax Act for the assessment years 2016-17 to 2020-21. The primary issues revolved around the transfer of ownership and the consideration received for such transfer, which was scrutinized following a search operation. The Tribunal examined the validity of the assessments, the satisfaction notes recorded by the Assessing Officer, and the evidences presented, including various agreements and financial transactions. The Tribunal's decisions were influenced by the interpretation of these documents and the legal provisions applicable to the circumstances of each case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772658 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2018-2019
• Other Referred Cases: DCIT vs. Sunil Kumar Sharma, Indian National Congress vs. DCIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALPESH PARMAR
• Assessee Lawyers: SATYA PRAKASH
• Keywords: Set aside; Capital asset; Additional evidence; Corroborative evidences; Unexplained cash credit; Unexplained expenditure; Unexplained investment; Income from undisclosed sources; Cost of acquisition; Document seized; Documents seized; Capital Gains; TDS; Deemed to accrue or arise in india
• Section: 132; 153A; 68; 69C; 14A; 2(14); 10B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER IT(SS)A Nos.137, 138, 139 & 140/Ahd/2024 Assessment Years: 2016-17, 2017-18, 2018-19 & 2020-21 ACIT, Central Circle – 1(3), 3rd Floor, Room No.304, Aayakar Bhavan, Ashram Road, Ahmedabad – 380 009, Gujarat. Vs. Manish Surender Kumar Dalmia, SY No.1589/1 to 1589/11, FP 86 Dalmia House, Sagrampura Putli S.O., Surat - – 395 002. Gujarat. [PAN – AAMPK 8266 A] IT(SS)A Nos.141, 142 & 143/Ahd/2024 Assessment Years: 2016-17, 2017-18 & 2018-19 ACIT, Central Circle – 1(3), 3rd Floor, Room No.304, Aayakar Bhavan, Ashram Road, Ahmedabad – 380 009, Gujarat. Vs. Late Shri Surender Dalmia Legal Heir Shri Manish Dalmia, SY No.1589/1 to 1589/11 FB, 86 GR FL, Surat City, Surat Textile Market S.O., Surat – 395 002. Gujarat. [PAN – ABBPD 6389 H] IT(SS)A Nos.144, 145, 146 & 147/Ahd/2024 Assessment Years: 2016-17, 2017-18, 2018-19, & 2020-21 ACIT, Central Circle – 1(3), 3rd Floor, Room No.304, Aayakar Bhavan, Ashram Road, Ahmedabad – 380 009, Gujarat. Vs. Ashokbhai Jagubhai Kheni, 79, Sadhna Society Varachha Road, Surat City, Varachha Road S.O. Surat – 395 006, Gujarat. [PAN – ABQPK 7812 B] Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 2 of 63 IT(SS)A Nos.148, 149, 150 & 151/Ahd/2024 Assessment Years: 2016-17, 2017-18, 2018-19 & 2020-21 ACIT,Central Circle – 1(3), 3rd Floor, Room No.304, Aayakar Bhavan, Ashram Road, Ahmedabad – 380 009, Gujarat. Vs. Avyaa Developers, 30, Platinum Poinl, Opp. CNG Pump Chorasi, Mota Varachha S.O., SURAL, Gujarat – 394 101. [PAN – ABDFA 6121 A] IT(SS)A Nos.152, 153, 154 & 165/Ahd/2024 Assessment Years: 2017-18, 2018-19, 2020-21 & 2016-17 ACIT,Central Circle – 1(3), 3rd Floor, Room No.304, Aayakar Bhavan, Ashram Road, Ahmedabad – 380 009, Gujarat. Vs. Hiteshkumar Hiralal Patel, 2, Nandeshwari Society, Surat City, Varachha Road S.Q. Surat – 395 006. Gujarat. [PAN – ABEPP 6968 P] IT(SS)A Nos.120 & 121/Ahd/2024 Assessment Years: 2018-19 & 2020-21 Avyaa Developers, Dalmia House, Opp. Anmol Market, Ring Road, Surat – 394 101, (Gujarat). [PAN – ABDFA 6121 A] Vs. Assistant Commissioner of Income Tax, Central Circle – 1(3), Aayakar Bhavan, Ashram Road, Navrangpura, Ahmedabad – 380 009, Gujarat. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 3 of 63 IT(SS)A Nos.122 & 123/Ahd/2024 Assessment Years: 2018-19 & 2020-21 Manish Surendrakumar Dalmia, Dalmia House, Opp. Anmol Market, Ring Road, Surat – 395 002 (Gujarat). [PAN – AAMPK 8266 A] Vs. Assistant Commissioner of Income Tax, Central Circle – 1(3), Aayakar Bhavan, Ashram Road, Navrangpura, Ahmedabad – 380 009, Gujarat. IT(SS)A No.124/Ahd/2024 Assessment Years: 2018-19 Manish Dalmia Legal Heir of Late Surendra Dalmia, Dalmia House, Opp. Anmol Market, Ring Road, Surat – 395 002, (Gujarat). [PAN – ABBPD 6389 H] Vs. Assistant Commissioner of Income Tax, Central Circle – 1(3), Aayakar Bhavan, Ashram Road, Navrangpura, Ahmedabad – 380 009, Gujarat. (Appellants) (Respondents) Assessee by Shri Satyaprakash, CA Revenue by Shri Alpesh Parmar, CIT-DR Date of Hearing 08.07.2025 Date of Pronouncement 26.08.2025 O R D E R PER BENCH: The above 24 appeals pertain to Avyaa Developers, a partnership firm, and its four erstwhile partners namely Shri Ashokbhai Jagubhai Kheni, Shri Hiteshkumar Hiralal Patel, Shri Manish Surendrakumar Dalmia & Late Shri Surender Dalmia represented by his legal heir Shri Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 4 of 63 Manish Dalmia, in respect of the assessments completed u/s 153C of the Income Tax Act (hereinafter referred as “the Act”) for the Assessment Years (A.Y.) 2016-17 to 2020-21 (except AY 2019-20). All the 24 appeals filed by the Revenue as well as by the assessee were heard together as the facts involved in all the cases were identical and are being disposed off vide this common order for the sake of convenience. 2. Before we take up the individual appeals and adjudicate the grounds raised therein, it will be relevant to first recapitulate the facts of the case which has been considered in the assessment orders and based on which additions were made in different cases. The major controversy in these appeals pertain to transfer of ownership of the partnership firm M/s. Avyaa Developers and the consideration received for such transfer. The sequence of events and the evidences brought on record in this respect are as under: (i) M/s. Avyaa Developers was established as partnership firm on 01.10.2015 with Ashokbhai Jugulbhai Kheni, Manish Surendrakumar Dalmia and Hiteshkumar Hiralal Patel as three partners. Subsequently, the partnership was reconstituted on 30.01.2016 and Shri Surenderkumar Dalmia was introduced as 4th partner. (ii) Several land holdings were acquired by these four partners (hereinafter referred as “Old Partners”) in the name of Avyaa Developers (the firm) in the Financial Year (F.Y.) 2016-17. By August, 2017, the firm was in possession/ownership of eight properties viz. Ashutosh Society, Sumedha Society, Tenement 9A, 9B, 10A, 10B of Gopalbaug Tenement, 14A 14B of Vasant Nagar society. Further Ashokbhai J. Kheni had planned to purchase an agricultural land at plot no.64/1C located at Village Rajpur Hirapur in Maninagar. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 5 of 63 (iii) A search under Section 132 of the Act was conducted in Popular Group of cases on 08.10.2020. This group is engaged in real estate builder and developer, construction and land trading activities etc. A search was also conducted simultaneously at the premises of one Shri Virendra Amritbhai Patel. In the course of search, a loose paper file (Annexure A1) was seized from office premises (Party A9) which contained an agreement dated 05.08.2017 between Shri Virendra Amritbhai Patel and M/s. Avyaa Developers, the partnership firm. (iv) The agreement dated 05.08.2017 was for transfer of shares in the partnership firm M/s. Avyaa Developers to Shri Virendra Amritbhai Patel on payment of certain amount in cheque and in cash as mentioned in the said agreement. This agreement was signed by all the partners of the firm and notarised by registered Notary. (v) As per this agreement, M/s. Avyaa Developers had agreed to transfer the right in the partnership firm to Shri Virendra Amritbhai Patel and Shri Dhanesh Jain in lieu of the payments as mentioned in page nos.68 & 69 of Annexure A1. As per this schedule, cash payment of Rs.6.95 Crores was made by Shri Virendra Amritbhai Patel on various dates from 09.05.2017 to 26.07.2017 i.e. prior to the date of agreement. Further, payment of Rs.7.80 Crores was also made through banking channel (RTGS/Cheque) within the same period. On verification of bank statement of Sh. Virendra Amritbhai Patel, it was found that all the transactions through RTGS/Cheque had actually taken place, which confirmed that the arrangement and payments as mentioned in the agreement dated 05.08.2017 found in the course of search had actually materialized. In fact, the AO has also referred to total cash Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 6 of 63 payment of Rs.22.45 crores made by Shri Virendra A Patel as per another MOU found in the course of search. (vi) An amended agreement dated 14.08.2017 was also found in the course of search through which Shri Virendra Amritbhai Patel and Dhanesh Jain were introduced as partners in the firm. The profit-sharing ratio of the partners as per this agreement was as under :- 1) Ashokbhai Jugulbhai Kheni 66.85% 2) Manish Surendrakumar Dalmia 12.18% 3) Hiteshkumar Hiralal Patel 10% 4) Dhanesh Jain 3.10% 5) Virendra Amritbhai Patel 8.26% Thus, the arrangement for introduction of new partners and transfer of shares to them in the partnership firm was found initiated vide the agreement dated 14.08.2017. (vii) Subsequent to the introduction of two new partners, their shares in the partnership firm were gradually increased by series of reconstitution agreements, some of which were found and seized during the course of search. As per AO, the formal agreements contained details of cheque payments only whereas the informal agreement had details of both cheque as well as cash payments. (viii) The total payment to be made was calculated on the basis of actual market valuation of all the land and properties held by the firm just prior to the introduction of new partners. Thus, the actual amount introduced by the new partners was as per the informal agreement which contained details of cash as well as cheque payments. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 7 of 63 (ix) The working of total valuation of land-holding in possession of M/s. Avyaa Developers just prior to introduction of new partners was also appearing in the MOU and the total value of the assets of the firm was Rs.193,25,63,800/-. This value was utilised to determine the proportionate amount to be paid by the new partners for acquiring the desired percentage of shares in the partnership firm. (x) Ultimately, the entire shares and ownership of the partnership firm was transferred to the new partners by executing the final reconstitution agreement on 29.01.2020. (xi) The old partners had taken their initial capital as per the books at the time of their retirement. However, the actual cost of transfer as per the MOU was Rs.193,25,63,800/-. Therefore, the Assessing Officer had held that the balance amount was paid to the old partners by the new partners in cash and such amount was not recorded in the books of account. (xii) The recorded capital of Shri Virendra Amritbhai Patel and Shri Dhanesh Jain as appearing in the seized Tally Account was found at Rs.20,82,60,000/- and Rs.9,23,09,214/- respectively. However, the actual cost of acquisition of shares in the partnership firm was the total value of assets of the firm, which was Rs.193,25,63,800/-. Therefore, the total unaccounted investment by the new partners was found to be Rs.163,19,94,586/- (193,25,63,800/- minus (20,82,60,000/- + 9,23,09,214/-)). This amount of Rs.163,19,94,586/- was considered as unaccounted income of the old partners which was added in their hands in the ratio of their share-holding. (xiii) Accordingly, substantive addition of the cash received by the old partners for relinquishing their right in the partnership firm, was added in their respective hands. At the same time, in order to protect the interest of Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 8 of 63 Revenue, protective addition of Rs.163,19,94,586/- was also made in the hands of M/s. Avyaa Developers. (xiv) In addition to the above, the source of unsecured loans taken by the partnership firm was considered as unexplained and addition in this respect was also made in different years. 3. Aggrieved with the orders of the Assessing Officer, appeals were filed before the First Appellate Authority. The Ld. CIT(A) had deleted the substantive addition made in the hands of the partners in respect of cash receipt on relinquishment of partnership rights. The protective addition made in the hands of the partnership firm was also deleted. Further, partial relief was allowed in respect of addition made in respect of unsecured loans. 4. Now both the Revenue as well as the assess are in appeal before us against the order of the Ld. CIT(A). We will first take up the appeals where only legal ground is involved. IT(SS)A Nos.148 & 149/Ahd/2024 for A.Ys. 2016-17 & 2017-18 : M/s Avyaa Developers: 5. The identical grounds taken by the Revenue in these two appeals are as under: - “1) The Ld. CIT(A) has erred in holding the assessment order u/s.153C of the Act for the relevant Assessment Year as void ab-initio, by wrongly observing that in the Satisfaction Note the A.O. had not mentioned any material or facts which had any bearing on the income of the year, while the facts show the contrary and the detailed discussion by the A.O. in the Satisfaction Note clearly point out escapement of income in the assessee's case. 2) The Ld. CIT(A) has erred in not deciding the appeal on merit. 3) The Revenue craves leave to add/alter/armed and/or substitute any or all of the grounds of appeal.\" Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 9 of 63 6. Shri Alpesh Parmar, the Ld. CIT-DR submitted that the Ld. CIT(A) was not correct in holding that the assessment orders passed under Section 153C of the Act for the A.Y. 2016-17 and 2017-18 were void ab- initio for the reason that in the satisfaction note recorded by the Assessing Officer there was no mention of any material fact having any bearing on the income for these two years. The Ld. CIT-DR has taken us through the assessment orders for the A.Y.s 2016-17 & 2017-18 and submitted that the addition in these two years were made on the basis of specific documents found in the course of search. 7. Per contra, Shri Satyaprakash, Ld. AR of the assessee submitted that the Assessing Officer had not recorded any satisfaction note under Section 153C of the Act for the A.Ys. 2016-17 & 2017-18. According to the Ld. AR, the satisfaction note was required to be recorded for each assessment year separately, failing which it vitiates the entire assessment proceeding. In this regard, he placed reliance on the decision of the Hon’ble Karnataka High Court in the case of DCIT vs. Sunil Kumar Sharma (159 taxmann.com 179). He further submitted that the SLP filed by the Department in this case was dismissed by the Hon’ble Supreme Court as reported in (165 taxmann.com 846) (SC). The Ld. AR further submitted that even in the common satisfaction note as recorded by the Assessing Officer, there was no reference of any seized material based on which the additions were made in the A.Ys. 2016-17 & 2017-18. Thus, the basic condition that the seized documents had any bearing on the income for A.Ys. 2016-17 & 2017-18 was not satisfied in the satisfaction as recorded by the AO for initiating proceeding u/s 153C of the Act. He, therefore, strongly supported the order of the Ld. CIT(A) on this issue. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 10 of 63 8. We have carefully considered the rival submissions. In the A.Y. 2016-17, the Assessing Officer had made addition of Rs.27,33,61,540/- in respect of cash payment made by the assessee to the owners of 22 tenements of Ashutosh Co-operative Housing Society Limited which was purchased by the assessee. The Assessing Officer has referred to MOU pertaining to this transaction seized in the course of search. Further, the addition of Rs.9,25,000/- was also made in respect of unexplained loan considered as cash credit under Section 68 of the Act. In the A.Y. 2017- 18, the Assessing Officer had made addition of Rs.19,26,48,752/- in respect of cash payment made towards purchase of 16 tenements in Sumedha Co-operative Housing Society Limited on the basis of seized MOU. Further, unsecured loan of Rs.15,32,50,000/- was also considered as unexplained and added under Section 68 of the Act. 8.1 In order to invoke the provisions of Section 153C of the Act, it is incumbent upon the Assessing Officer to record his satisfaction that the books of account or documents or asset seized or requisitioned have a bearing on determination on the total income of the non-searched person. In the present case, the Assessing Officer had recorded a common satisfaction for the A.Ys. 2015-16 to 2021-22 and no separate satisfaction was recorded for each assessment year. The contention of the assessee is that the common satisfaction recorded by the Assessing Officer for different assessment years was not in accordance with the provisions of law and had vitiated the entire assessment proceedings. The provision of section 153C of the Act does not require that satisfaction of the AO has to be recorded for each assessment year separately. In fact, the Ld. CIT(A) had discussed the decision of Hon’ble Karnataka High Court in the case of DCIT vs. Sunil Kumar Sharma, (supra) in his orders and distinguished the same on facts. The SLP filed by the Department against this order Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 11 of 63 was summarily dismissed and no decision was given on the merits of the case. Therefore, what is relevant is to consider in this case is whether the AO had recorded any satisfaction that the seized documents had any bearing on the income of the assessee for the AYs 2016-17 & 2017-18. 8.2 In the case of Indian National Congress vs. DCIT, 160 taxmann.com 606 (Delhi) relied upon by the Revenue, the Hon’ble Delhi High Court has held that it is not incumbent upon the Assessing Officer to draw separate or independent satisfaction notes for each assessment year and a composite satisfaction note would suffice the requirement of Section 153C of the Act. The observations of the Hon’ble High Court in this regard is found to be as under: - 23. For the purposes of invoking Section 153C of the Act it is incumbent upon the AO to be satisfied that the material gathered in the course of the search and pertaining to the non-searched person would have a bearing on the determination of the total income of such other person either for six AYs’ or for the relevant AY or AYs’. Since the provision itself requires and enables the AO to undertake an assessment for a block period of 10 years, it would clearly not be incumbent upon it to draw separate or independent satisfaction notes for each AY. A composite Satisfaction Note would suffice the requirements of Section 153C of the Act provided it embody details of the material gathered in the course of the search and pertaining to the AYs forming part of the block as a whole. As long as the Common Satisfaction Note includes sufficient particulars of the incriminating material relevant to the block of AYs, the same would, in our considered opinion, satisfy the statutory requirement as imposed by the Act. …. 24. The provision only requires the AO to be satisfied that the material collated and handed over is likely to have an impact on the total income for the relevant AY or AYs’. While an assessment would necessarily have to be made in respect of each of the relevant AY or AYs’, we find ourselves unable to read Section 153A or 153C as mandating separate Satisfaction Notes being drawn for each assessment year. Our conclusion in this respect stands fortified from the language of Section 153A(1)(a) which contemplates a notice being issued calling upon the person to furnish a return of income for each of the six AYs’ or the relevant AY or AYs’. This too appears to suggest that while the notice could be composite and based on a common satisfaction note which encapsulates the incriminating material pertaining to the AYs’ in question, it is only returns which must and mandatorily be filed separately. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 12 of 63 25. Regard must be had to the indubitable fact that the Satisfaction Note merely forms the foundation for initiation of action and which would enable us to evaluate whether an opinion has been validly formed. As long as it rests on incriminating material which pertains to the AYs’ in question, the same would qualify the requirement of Section 153C. We deem it apposite to observe that while it would be imperative for the Satisfaction Note to refer to the material pertaining to the AYs’ which are sought to be reopened, a consolidated Satisfaction Note clearly does not appear to be an anathema provided it rests on material which pertains to the AYs’ which are sought to be reopened. (Emphasis supplied). 8.3 The Hon’ble Delhi High Court has categorically held that a consolidated satisfaction note can be recorded for all the assessment years involved. What is relevant is to examine whether the AO had drawn the satisfaction for all the years on the basis of the materials found in the course of search. In the present case, the composite satisfaction note recorded by the Assessing Officer technically meets the requirement of provision of Section 153C of the Act. However, we have to consider as to whether any incriminating material pertaining to AYs 2016-17 and 2017- 18 was referred in the common satisfaction note. It is necessary to examine this aspect as only on the basis of books of account or documents or assets pertaining to these years, the Assessing Officer could have recorded his satisfaction that these have a bearing on determination of the total income of the assessee for these two years. 8.4 A copy of the common satisfaction recorded by the Assessing Officer for the A.Ys. 2015-16 to 2021-22 in the case of M/s. Avyaa Developers has been brought on record. It is found that this common satisfaction note refers to the documents found in the course of search pertaining to transfer of shareholding of M/s. Avyaa Developers. The satisfaction note dwells upon the agreement dated 05.08.2017 wherein schedule of payment for transfer of rights in the partnership firm to the new partners was mentioned. Reference to the subsequent reconstituted Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 13 of 63 agreements also appears in the satisfaction note. However, we do not find any reference of MOUs based on which additions were made by the Assessing Officer in the A.Ys. 2016-17 & A.Y. 2017-18. In the A.Y. 2016-17, the Assessing Officer had made addition of Rs.27,33,51,540/- in respect of cash payment for purchase of 22 tenements of Ashutosh Co- operative Housing Society. Similarly, in A.Y. 2017-18, addition of Rs.19,26,48,752/- was made in respect of cash payment for purchase of 16 tenements of Sumedha Co-operative Housing Society. In the common satisfaction recorded by the Assessing Officer, we do not find any reference of MOU with Ashutosh Co-operative Housing Society and Sumedha Co-operative Housing Society or any other document pertaining to these transactions. In the absence of reference to any document pertaining to the transactions of the assessee pertaining to acquisition of properties in Ashutosh Co-operative Housing Society and Sumedha Co-operative Housing Society in the satisfaction note, the AO could not have drawn his satisfaction about their bearing on the income of the assessee for these two years. Therefore, without reference to any material pertaining to A.Y. 2016-17 and 2017-18 in the satisfaction note, the Assessing Officer could not have validly assumed the jurisdiction under Section 153C of the Act. Since there was no reference of any material pertaining to A.Y. 2016-17 and 2017-18 in the common satisfaction note, the Ld. CIT(A) has rightly held that there was no proper satisfaction record by the AO for assumption of jurisdiction u/s 153C of the Act for the AYs 2016-17 and 2017-18. Therefore, the finding of the Ld. CIT(A) on this issue is found to be correct and is upheld. The grounds taken by the Revenue in both the appeals are dismissed. 9. In the result, the Revenue’s appeal in IT(SS)A Nos.148 & 149/Ahd/2024 for A.Ys. 2016-17 & 2017-18, both are dismissed. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 14 of 63 IT(SS)A Nos.137 & 138/Ahd/2024 for A.Ys. 2016-17 & 2017-18 : Manish Surendrakumar Dalmia 10. These two appeals filed by the Revenue pertain to Shri Manish Surender Kumar Dalmia for the A.Ys. 2016-17 & 2017-18 respectively. The identical grounds taken by the Revenue in these wo appeals are as under: - “1. The Learned CIT(A) has erred in holding the assessment order u/s. 153C of the Act for the relevant Assessment Year as void ab-initio, by wrongly observing that in the Satisfaction Note the A.O. had not mentioned any material or facts which had any bearing on the income of the year, while the facts show the contrary and the detailed discussion by the A.O. in the Satisfaction Note clearly point out escapement of income in the assessee's case. The Learned CIT(A) has erred in not deciding the appeal on merit. The Revenue craves leave to add/alter/amend and/or substitute any or all of the grounds of appeal.” 11. The facts involved in these two appeals are identical to IT(SS)A Nos.148 & 149/Ahd/2024 discussed earlier. Shri Manish Surender Kumar Dalmia is a partner of M/s. Avyaa Developers w.e.f. 01.10.2015. The partners of the firm namely Shri Ashokbhai Jagubhai Kheni, Shri Manish Surendrakumar Dalmia and Shri Hiteshkumar Hiralal Patel had signed a common MOU with owners of the tenements in Ashutosh Co-operative Housing Society and Sumedha Co-operative Housing Society on 28.09.2015 i.e. before the constitution of the firm on 01.10.2015, for purchase of tenements. As per the seized MOU/Banakhat, M/s. Avyaa Developers had paid Rs.27,33,51,540/- in cash to the owners of 22 tenements of Ashutosh Co-operative Housing Society, over and above the documented sale deed value. In the course of assessment, the Assessing Officer had held that since the partnership firm cannot purchase immovable/movable property in its name, the purchase was Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 15 of 63 made by the partners and the real beneficiary owners who made the investment in the property were the partners of M/s. Avyaa Developers. Therefore, substantive addition for unexplained investment made in cash for purchase of 22 tenements of Ashutosh Co-operative Housing Society was made in the hands of the partners and protective addition was made in the hands of the firm M/s. Avyaa Developers. Accordingly, the Assessing Officer had made an addition of Rs.3,41,68,943/- in the hands of the assessee in the A.Y. 2016-17, in proportion to the shareholding in the partnership firm, as unexplained investment in Ashutosh Co-operative Housing Society. Similarly, an addition of Rs.2,40,81,094/- was also made in the A.Y. 2017-18 on this account. Certain other additions were also made in these two years which were not based on any seized material. The contention of the assessee was that the Assessing Officer had not recorded any satisfaction under Section 153C of the Act in the case of the assessee for the A.Y. 2016-17 and 2017-18 and the Ld. CIT(A) had upheld this view, against which the Revenue in in appeal. 12. We have heard the Ld. CIT-DR as well as the Ld. AR on this issue and gone through the common satisfaction recorded by the Assessing Officer for the A.Ys. 2015-16 to 2021-22 in the case of Shri Manish Surender Kumar Dalmia. It is found that the common satisfaction note contains only reference to the documents found in the course of search pertaining to transfer of shareholding of M/s. Avyaa Developers to the new partners. We do not find any reference of MOU/Banakhat entered into by the partners of M/s. Avyaa Developers with Ashutosh Co-operative Housing Society and with Sumedha Co-operative Housing Society in the satisfaction note. In the absence of any reference to the MOU/Banakhat with Ashutosh Co-operative Housing Society and Sumedha Co-operative Housing Society, in the satisfaction note, the Assessing Officer could not Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 16 of 63 have drawn satisfaction that there was any document which had bearing on income of the assessee for the A.Ys. 2016-17 and 2017-18. In view of this fact, we are of the considered opinion that the Ld. CIT(A) had rightly held that there was no satisfaction drawn by the Assessing Officer for the A.Ys. 2016-17 and 2017-18 in the case of the assessee. The Revenue has been unable to bring on record any evidence in support of its contention that the Assessing Officer had recoded satisfaction based on seized documents in the case of the assessee for the A.Ys. 2016-17 & 2017-18. Therefore, the finding of the Ld. CIT(A) on this issue is upheld and grounds taken by the Revenue are dismissed. 13. In the result, Revenue’s appeal IT(SS)A Nos.137 & 138/Ahd/2024 for the A.Ys. 2016-17 & 2017-18 are dismissed. IT(SS)A Nos.141, 142, 144 & 145/Ahd/2024 for A.Ys. 2016-17 & 2017-18 : Late Surendra Kumar Dalmia & Sh. Ashokbhai Kheni 14. The facts involved in all these appeals filed by the Revenue in the case of Late Shri Surender Kumar Dalmia represented by Legal Heir Shri Manish Dalmia and Shri Ashokbhai Jagubhai Kheni for the A.Ys. 2016-17 & 2017-18 are identical to the facts as discussed earlier in IT(SS)A Nos.137 & 138/Ahd/2024. The common satisfaction notes drawn by the Assessing Officer in the case of late Shri Surender Dalmia and Shri Ashokbhai Jagubhai Kheni is found identical to the satisfaction note in the case of Shri Manish Surender Kumar Dalmia, as discussed earlier. We do not find any reference of the MOU/Banakhat with Ashutosh Co- operative Housing Society and with Sumedha Co-operative Housing Society in these satisfaction notes as well. Therefore, the findings and the decision as given in the appeals in IT(SS)A nos.137 & 138/Ahd/2024 for A.Ys. 2016-17 & 2017-18 is applicable mutatis mutandis in these four Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 17 of 63 appeals as well. Accordingly, all these four appeals filed by the Revenue are dismissed. IT(SS)A Nos.165 & 152/Ahd/2024 for A.Ys. 2016-17 & 2017-18 : Sh. Hitesh H Patel 15. These two appeals filed by the Revenue pertain to Shri Hiteshkumar Hiralal Patel, partner of M/s. Avyaa Developers for the A.Ys. 2016-17 & 2017-18 respectively. The common ground taken by the Revenue in these two appeals are as under: - “1. The Learned CIT(A) has erred in holding the assessment order u/s. 153C of the Act for the relevant Assessment Year as void ab-initio, by wrongly observing that in the Satisfaction Note the A.O. had not mentioned any material or facts which had any bearing on the income of the year, while the facts show the contrary and the detailed discussion by the A.O. in the Satisfaction Note clearly point out escapement of income in the assessee's case. . 2. The Learned CIT(A) has erred in not deciding the appeal on merit. 3. The Revenue craves leave to add/alter/amend and/or substitute any or all of the grounds of appeal.” 16. We have heard the Ld. CIT-DR and the Ld. AR on the ground taken by the Revenue in these appeals. A copy of the common satisfaction recorded by the Assessing Officer in the case of Shri Hiteshkumar Hiralal Patel for the A.Ys. 2015-16 to 2021-22 has been brought on record. It is found that the common satisfaction note in this case is materially different from the common satisfaction note recorded by the Assessing Officer in the case of M/s. Avyaa Developers and other three partners of the firm. In the present common satisfaction note, we find specific mention of the seized documents pertaining to cash consideration for purchase of tenements in Ashutosh Co-operative Housing Society, in Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 18 of 63 addition to the documents pertaining to transfer of shareholding rights of M/s. Avyaa Developers to the new partners. It is found that in the common satisfaction note in this case, the Assessing Officer had recorded the following specific findings in respect of the seized documents pertaining to Ashutosh Co-operative Housing Society. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 19 of 63 ………………. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 20 of 63 Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 21 of 63 Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 22 of 63 Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 23 of 63 From the above, it is revealed that the assessee has sold property wherein the assessee has received an amount of Rs.1,24,25,070/-. 17. In the assessment order for the A.Y. 2016-17, the Assessing Officer had made the following specific additions in the case of the assessee: - 1. Unexplained investment [@ 25% share] for purchase of 22 Bungalows of Ashutosh Co-operative Housing Society under Section 69 of the Act Rs.6,83,37,885/- 2. Short Term Capital Gain on sale of Bungalow No.6 of Ashutosh Co- operative Housing Society Rs.60,00,000/- 3. Unexplained money received on sale of Bungalow No.6 of Ashutosh Co- operative Housing Society over the Sale Deed value Rs.1,24,25,070/- 4. Unexplained expenditure under Section 69C of the Act Rs.1,80,060/- 5. Unexplained cash credit Rs.17,75,000/- Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 24 of 63 18. From the reasons as recorded by the Assessing Officer, it is found that in the common satisfaction note, there was reference of certain seized materials, pertaining to first three additions as made by the Assessing Officer. It is found that the Ld. CIT(A) had considered this common satisfaction note but he was of the opinion that the Assessing Officer did not record his satisfaction regarding the material relied upon for making the additions in the year under consideration and, therefore, the assumption of jurisdiction under Section 153C of the Act was invalid and void. The finding of the Ld. CIT(A) in this regard is found to be as under:- “6.4 On reading of this satisfaction note, it transpires that satisfaction note contains information regarding following two issue :- (i) Issue of the cash consideration received by each of the individual members of Ashutosh Co-op. Housing Society from Avyaa Developers consequent to MoU executed with members of such society. (ii) Alleged introduction of unaccounted cash as partner’s capital in partnership firm (Avyaa Developers) by incoming partner i.e. Shri Virendra Patel and Shri Dhanesh Patel, which are admitted vide agreement entered into August, 2017. ……….. 6.8 In view of these decisions, it is clear that recording of satisfaction is a pre-requisite for the purpose of making assessment in the case of a person other than the searched person u/s.153C of the Act. In the present case, in entire satisfaction note, the AO has not mentioned any material or facts which are having bearing on income of year under consideration, thus it cannot be termed as a satisfaction note which could give power to the AO to assume jurisdiction u/s.153C of the Act for the Assessment Year in question. A reading of the aforesaid Satisfaction Notes would establish that jurisdictional AOs appear to have proceeded on the premise that the moment incriminating material is unearthed in respect of a particular AY, they would have the jurisdiction and authority to invoke Section 153C in respect of all the assessment years which could otherwise form part of the \"relevant assessment year\" as defined in Section 153A. However, the aforesaid understanding of Section 153C is clearly erroneous and unsustainable. Discovery of material likely to implicate the assessee and impact the assessment of total income for a particular AY is not intended to have a waterfall effect on all AYs which could Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 25 of 63 form part of the \"relevant assessment year\". For initiating assessment u/s.153C of the Act for the particular year, the AO should be satisfied that document found from search relates to the any other person. However, in the present case, the AO has not recorded his satisfaction regarding the material relied upon for making addition in year under consideration, and since there is no proper satisfaction note as required by the provisions of law, assumption of jurisdiction u/s.153C of the Act for Assessment Year 2016-17 is invalid void ab initio, and bad in law.” 19. We have carefully considered the satisfaction note as recorded by the Assessing Officer and the findings of the Ld. CIT(A) in this regard. The Ld. CIT(A) has observed that there was no reference to tenement no.6 in the satisfaction note (in Paragraph A.2) and thus the satisfaction recorded by the Assessing Officer in this regard was without any reference to incriminating material found in the course of search. Therefore, no addition of Rs.1,84,25,070/- could have been made in respect of cash received on sale of this bungalow. According to the Ld. CIT(A), this addition was based on mere presumption and without reference to any incriminating material found in the course of search. It is found that the Assessing Officer had specifically referred to common MOU dated 28.09.2015 signed between all 22 bungalows/tenements owners and M/s. Avyaa Developers in the satisfaction note. As per this common MOU, the properties were agreed to be sold at the rate of Rs.81,109/- per sq. mtr. The contention of Ld. CIT(A) is that Bungalow No.6 was not included in the list of 22 tenement owners who had signed the common agreement. It is found that the common MOU dated28.09.2025 was signed by only 19 of the 22 tenement owners, and this fact has not been denied by the Ld. CIT(A). The addition in respect of Bungalow No.6 was not made on the basis of this common MOU but on the strength of certain other material, which is extracted in the satisfaction note. The Assessing Officer had also referred in the satisfaction note to Banakhat dated 27.11.2015 signed Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 26 of 63 between each of the sellers and M/s. Avyaa Developers, which were found and seized vide Annexure-A16. On combined reading of the common MOU and the individual Banakhats along with the final registered deeds (also seized and referred in the satisfaction note), the Assessing Officer had recorded his satisfaction that the registered deeds were executed at much lower price and the remaining amount, as per common MOU, was exchanged in cash. Thus, there was categorical recording of the finding by the Assessing Officer, in the satisfaction note, that the seized documents pertaining to purchase of Ashutosh Co-operative Housing Society Bungalows/tenements had a bearing on the income of the assessee. It is found that the Ld. CIT(A) did not consider this specific finding recorded by the Assessing Officer and for this reason his order can’t be upheld. 19.1 The decision of the Ld. CIT(A) is based only on the finding that there was no reference to bungalow no.6 in the common MOU, referred by the AO in the satisfaction note. It is found that the Ld. CIT(A) did not properly consider the facts as brought on record in the assessment order in this regard. The Assessing Officer had recorded a finding that the tenement no.6 at Ashutosh Co-operative Housing Society was sold by the assessee himself to M/s. Avyaa Developers, on which TDS was also deducted, but the capital gain arising on this transaction was not reflected in the ITR filed by the assessee. It is for this reason that the Assessing Officer had treated the entire sale consideration of Rs.60,00,000/- (as per Sale Deed) as STCG derived by the assessee (cost of acquisition was taken as Nil in the absence of any compliance by the assessee). Further, the cash amount of Rs.1,24,25,070/- as per the common MOU agreed rate, was separately added under Section 69 of the Act. It is found that the Assessing Officer had referred to this amount in the common Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 27 of 63 satisfaction note. Therefore, the finding of Ld. CIT(A) that there was no proper satisfaction recorded by the Assessing Officer is not found correct. Further, the Ld. CIT(A) did not consider the findings recorded by the Assessing Officer in respect of sale of 19 tenements of Ashutosh Co-operative Housing Society as per common MOU and separate Banakhats referred in the common satisfaction note, the cash payment of which amounting to Rs.6,83,37,885/- was proportionately added in the hands of the assessee. The Ld. CIT(A) has neither considered this part of the satisfaction nor given any finding in this regard. Considering the lacuna as evident in the order of the Ld. CIT(A), we are of the considered opinion that the Ld. CIT(A) was not correct in holding that there was no reference to any incriminating material in the satisfaction note recorded by the Assessing Officer on the issues on which additions were made by the Assessing Officer. We find that the Assessing Officer had recorded specific satisfaction in respect of addition for unexplained investment of Rs.6,83,37,885/- on account of proportionate cash payment for acquisition of 19 bungalow of Ashutosh Co-operative Housing Society. Similarly, the reference to seized incriminating material in respect of sale of Bungalow no.6 is also appearing in the seized documents. 19.2 In view of the above facts and discussions, the ground taken by the Revenue in IT(SS)A no.165/Ahd/2024 is allowed. However, as the Ld. CIT(A) did not consider the additions made by the Assessing Officer on merits, we deem it proper to set aside the matter to the file of Ld. CIT(A) with a direction to adjudicate the grounds taken by the assessee on merits. The appeal of the Revenue in IT(SS)A no.165/Ahd/2024 for A.Y. 2016-17 is allowed for statistical purpose. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 28 of 63 20. As regarding appeal in IT(SS)A No.152/Ahd/2024 for A.Y. 2017-18, the only addition made by the Assessing Officer in this year was on account of unexplained proportionate investment of Rs.4,81,62,188/- in purchase of tenement in Sumedha Co-operative Housing Society. In the common satisfaction note, the Assessing Officer has not referred to any seized material pertaining to acquisition of property of Sumedha Co- operative Housing Society. Only reference of purchase of certain immovable property (in F.Y. 2015-16) from 2 cooperative housing societies namely Ashutosh Co-operative Housing Society and Sumedha Co-operative Housing Society appears in the satisfaction note. However, no details of the properties of Sumedha Co-operative Housing Society purchased and no reference to any MOU/sale deed in this regard, is found appearing in the common satisfaction note. Neither there is reference of acquisition of any property in the F.Y. 2016-17 (relevant to A.Y. 2017-18) in the common satisfaction note. In view of these facts, the finding of the Ld. CIT(A) that Assessing Officer had not recorded his satisfaction in respect of any seized incriminating material in the satisfaction note which could be relied upon for making the addition in the A.Y. 2017-18, is upheld. The ground taken by the Revenue is, therefore, dismissed. Accordingly, the appeal of the Revenue in IT(SS)A No.152/Ahd/2024 for the A.Y. 2017-18 is dismissed. Substantive addition for cash receipts on transfer of rights in the partnership firm 21. As discussed earlier, on the basis of seized agreements, the Assessing Officer had worked out cash payment of Rs.163,19,94,586/- made by the new partners Shri Virendra Amrutbhai Patel and Shri Dhanesh Jain for acquiring their share in the partnership firm M/s. Avyaa Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 29 of 63 Developers. The Assessing Officer had made addition for the cash receipt of Rs.163,19,94,586/- on substantive basis in the hands of the old partners on proportionate basis for relinquishing their rights in the partnership firm and protective addition of the entire amount was made in the hands of M/s Avyaa Developers. We will first consider the substantive addition made in the hands of the old partners. It is found that this issue was primarily adjudicated by the Ld. CIT(A) in the AY 2018-19 in the case of Late Shri Surender Dalmia and the finding as given in this case was applied in the case of other partners. Therefore, we will first take up the appeal filed by the Revenue in the case of Sh. Surender Dalmia. IT(SS)A No.143/Ahd/2024 - A.Y. 2018-19: Late Shri Surendra Dalmia 22. This appeal by the Revenue against the order of the Ld. CIT(A) dated 19.08.2024 in the case of Late Shri Surender Dalmia represented by the Legal Heir Shri Manish Dalmia, for the A.Y. 2018-19, contains the following grounds: - “1. The Learned CIT(A) has erred in deleting the addition of unexplained money of Rs.3,06,19,041/- u/s.69A of the Income Tax Act without appreciating the seized incriminating documents & registered agreement dated 05.08.2017 2. The Learned CIT(A) has erred in not considering the reconstitution agreements of the partnership firm 'Avyaa Developers' including the latest agreement dated 29.01.2020, duly notarized and found during the search, which showed that the assessee had retired from the partnership firm. 3. The Learned CIT(A) has erred in not appreciating that filing of another agreement after the date of search, particularly when the firm did not file its regular return before due date, was only an afterthought and not valid in the eyes of law, and any such agreement cannot have retrospective operation but may only be considered as fresh agreement. 4. The Revenue craves leave to add/alter/amend and/or substitute any or all of the grounds of appeal.” Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 30 of 63 23. All the grounds taken by the Revenue pertain to proportionate addition of Rs.3,06,19,041/- in the hands of the assessee, in respect of cash payments made by the new partners during the year. Shri Alpesh Parmar, the Ld. CIT-DR has taken us through the facts as recorded in the assessment order. He explained that the cash payment made by the new partners, as recorded in the seized documents, was not denied. Further, the Ld. CIT(A) had also given a categorical finding that there was specific reference to unaccounted cash payments made by Shri Virendra Amrutbhai Patel, in connection with the partner’s contribution in the assessment year under question. Further that, the agreement dated 05.08.2017 found in the course of search, had details of cheque and cash payments which was duly signed by all the parties/partners and notarised by a registered Notary. It was agreed that in lieu of sums to be paid both in cash and through banking channels, Shri Virendra Amrutbhai Patel and Shri Dhanesh Jain would be given share in the partnership firm. The Ld. CIT-DR further submitted that the cheque payments as mentioned in the seized documents were found duly reflected in the books of M/s. Avyaa Developers, but there was no recording of the cash payments as mentioned therein in the firm’s accounts. Therefore, the Assessing Officer had rightly held that the cash payments were received by the existing partners for relinquishing of their rights in the partnership firm. The Ld. CIT-DR further pointed out that before each of the formal reconstitution agreement between the partners, an informal agreement was signed and these informal agreements were crucial evidence as they contained exact details of total valuation of firm’s properties, based on which total actual amount to be paid by the new partners was calculated. He submitted that these calculations were also corroborated from the hand-written calculations in a loose paper sheet in the seized material Annexure-A1. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 31 of 63 The Ld. CIT-DR explained that the total valuation of the land holdings of the firm was Rs.193,25,63,800/-, which was considered as the basis for determining the proportionate amount to be paid by the new members for acquiring the desired proportion of shares in the partnership firm, at the time of each reconstitution. On the basis of the seized documents, the Assessing Officer had found that the total cash consideration as per the seized document, paid in the current year by the two new partners was Rs.24,49,52,330/-. Since the assessee was holding 12.5% shares in the firm, proportionate addition of Rs.3,06,19,041/- was made in the hands of the assessee in respect of the cash component received, as evident from the seized documents. 23.1 The Ld. CIT-DR pointed out that the Ld. CIT(A) had upheld that the cash payment of Rs.22.54 Crores made by Shri Virendra Amrutbhai Patel, as appearing in the seized documents, was correct. This finding was given on the basis that the cheque payments written in the same document were duly matching with the entries in the books of account of Aavya Developers and, therefore, all the entries in the seized documents were held as correct. He emphasized that the Ld. CIT(A) had rightly held that the seized documents had to be read as a whole and not in part. The Ld. CIT-DR, however, submitted that the Ld. CIT(A) was not correct in holding that the cash payments as noted in the MOU, were made by the new partners directly to the sellers of certain land parcels which was required to be purchased by the new partners as their capital contribution. He strongly disputed the findings of the Ld. CIT(A) that the cash payments noted in the seized MOU were on-money in relation to properties purchased by the new partners, as no such narration was appearing anywhere in the seized documents. The Ld. CIT-DR further submitted that the Ld. CIT(A) was not correct in holding that the addition made by Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 32 of 63 the AO was based on presumptions and not on any concrete evidence. He contended that the evidences found in the course of search were self- speaking, which was never disputed by the signing parties. 24. Per contra, Shri Satya Prakash, Ld. AR of the assessee, submitted that the cheque amount mentioned in the seized documents reflected capital contribution by the new partners in the partnership firm, which was subsequently utilised towards purchase of land by the firm. He explained that, in order to avoid double stamp duty, it was agreed upon that the new partners will purchase certain residential properties directly in the name of the firm. He further submitted that since the cheque amounts paid by the new partners to the partnership firm was utilised for purchase of land, cash amount mentioned in the seized documents was also utilised for the same purpose. The Ld. AR submitted that Ld. CIT(A) had verified the utilisation of cheque payments as appearing in the seized documents towards acquisition of the land and thereafter given his finding about utilization of cash payments for the same purpose. He further submitted that no evidence was found in the course of search that cash amount mentioned in the seized material was received by the existing partners. The Ld. AR submitted that the cash considerations as noted in the seized material was paid by Shri Virendra Amrutbhai Patel directly to the owners of the properties and not to the firm or to the existing partners. He, therefore, strongly supported the order of the Ld. CIT(A). An alternate plea was also taken by the Ld. AR that the cash receipts as per seized documents were on account of capital contribution of the new partners to the partnership firm M/s Aavya Developers and, therefore, its taxability was to be considered in the hands of the firm and not in the hands of the existing partners. He contended that neither the cash was received by the assessee partner nor was it taxable in his hands. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 33 of 63 Our Findings 25. We have carefully considered the rival submissions. It transpires that no statement was recorded during the course of search in respect of the seized documents, on the basis of which the addition has been made in the present case. In the course of assessment proceedings also, no statement was recorded by the Assessing Officer nor any clarification was sought from the persons from whose possession the documents were seized. In fact, no explanation was given by the assessee in respect of the seized documents in the course of assessment proceeding and the AO had completed the assessment to the best of his judgement u/s 144 of the Act, on the basis of the materials available on record. We have to, therefore, examine the contents of the seized documents vis-à-vis the addition made by the AO and also examine the correctness the explanation offered in respect of these documents in the course of the appellate proceeding before the Ld. CIT(A). But before that it will be apposite to discuss the other objections taken by the assessee and the relevant facts considered by the Ld. CIT(A). 25.1 The assessee had challenged the validity of the proceeding initiated under section 153C of the Act and the Ld. CIT(A) had dismissed the objection of the assessee. The Ld. CIT(A) had held that the proceeding u/s 153C was validly initiated for this year in the case of the assessee. According to Ld. CIT(A), the assessee was a partner of the firm during the year under consideration and the cash payment made by Shri Virendra Patel in connection with the partner’s contribution had a bearing on income of the assessee. In fact, the assessee had contended that he had retired from the firm before the MoU was executed with the new partners and that his name was not appearing in the MOU and, therefore, no cash Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 34 of 63 could have been received by him. It is found that the assessee was admitted as a partner in the partnership firm M/s Aavya Developers on 30.01.2016 and he was very much a partner on 05.08.2017, when the MoU was executed between the old and the new partners. The MoU dated 05.08.2017 was signed by only three of the old partners and the name of the assessee wasn’t appearing therein. However, it is found that the three signatory partners of MoU represented “First Party Patnership Firm present and time to time Partners, Partners, Agents and present and time to time children, parents, heirs etc. all”. Thus, the assessee was also represented by the three signatory partners of the MoU. The assessee had retired from the partnership only on 14.08.2017, when the new partnership deed was signed between the old partners and the new partners and the name of the assessee was not appearing therein. The assessee has been unable to bring on record any evidence that he had retired from the partnership prior to 14.08.2017. Therefore, the contention of the assessee that he was not a beneficiary of the cash received from the new partners, cannot be accepted. The assessee was bound by the terms of the settlement made vide MOU dated 05.08.2017 and also a beneficiary of the said settlement. 25.2 The agreement of understanding (MOU) dated 05.08.2017 found in the course of search was relied upon by the Assessing Officer for making the addition in this case and the said MOU was also referred by the Ld. CIT(A) for deleting the addition. It is found that the said MOU was signed between M/s. Avyaa Developers and its three partners namely Shri Ashokbhai Jagubhai Kheni, Shri Manish Surendra Dalmia & Shri Hiteshkumar Hiralal Patel as First party; Shri Ashokbhai Jagubhai Kheni as Second party and Shri Dhanesh Badarmal Jain and Shri Virendra Amrutbhai Patel as Third party. The MOU starts with listing the details Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 35 of 63 of the properties under ownership and physical possession of the First party. The nine properties owned by the First party and described in the MOU are as under: - 1. Non-agricultural land at plot no.11 measuring 4371 Sq. Mtr. in Maninagar 2. Non-agricultural land at plot nos.12 & 13 measuring 3332 Sq. Mtr. in Maninagar 3. Bungalow No.9A of Gopalbagh Society at Maninagar 4. Bungalow No.9B of Gopalbagh Society, Maninagar 5. Bungalow No.10A of Gopalbagh Society, Maninagar 6. Bungalow No.10B Gopalbagh Society, Maninagar 7. Bungalow No.14B Vasantnagar Society, Maninagar 8. Bungalow No.14A, Vasantnagar Society, Maninagar 9. Property No.9 was agricultural land owned by Shri Ashokbhai Jagubhai Kheni in his individual name, which was to be converted into non-agricultural and thereafter the property was to be executed in the name of firm. 25.3 It was categorically mentioned in the MOU that property nos.1 to 3 was under full, independent ownership and physical possession of the First party M/s. Aavya Developers, the partnership firm. Further, property Nos.3 to 9 was decided to be taken on sale by the First party. As per the MOU, all the three parties vide this agreement had decided to develop the above referred lands for construction of a Commercial Mall. The valuation of the properties was also mentioned in the MOU which is reproduced below: - “Accordingly the first party, second party and third party have together under this Agreement of Understanding decided to develop the said land relying over the conditions mentioned hereunder. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 36 of 63 (1) The said property No.1, 2 & 9 property total 10386 Sq. Yard area land the half share of land means 5193 Sq. Yard land calculating at Rs.1,62,000/- Rupees One Lakh Sixty Two Thousands only per square yard at Two Thousands only per square yard in in Rs.84,12,66,000/- Rupees Eighty Four Crore Twelve Lakh Sixty Six Thousands only. (2) The said property of 3, 4, 5, 6, 7 & 8 total 1848 Sq. Yard area of land the half share of land means 957.50 Sq. Yard land calculating Rs.1,38,700/- Rupees One Lakh Thirty Eight Thousands Seven Hundred only per square yard in Rs.13,28,05,250/- in Rupees Thirteen Crore Twenty Eight Lakhs Five Thousands Two Hundred Fifty only. Thus paying the amount mentioned in (I) and (II) the properties shown herein above the third party has decided to take on sell from the first party and second party, the said amount on the basis of the said Agreement of Understanding as per the details shown hereunder the third party shall have to pay to the first party and second party. The third party shall join in the said partnership firm as partner and accordingly three parties have in the said land jointly shall have to carry out the construction of Commercial Mall.” [Emphasis supplied] 25.4 It was thus agreed in the MOU that the Third party namely Shri Dhanesh Badarmal Jain & Virendra Amrutbhai Patel will acquire 50% share of all the nine properties mentioned in the MOU and join the partnership firm as partners in order to jointly carry out the construction of the Commercial Mall. It is further mentioned in the MOU that the Third party had already paid earnest money to the First party by cash/cheque/RTGS, the details of which is appearing therein, which was also reproduced in the assessment order. The earnest money paid by Shri Virendra Amrutbhai Patel during the period 09.05.2017 to 26.07.2017, in cash, was Rs.6.95 crore whereas an amount of Rs.7.80 Crores was paid through cheque/RTGS during the same period. Similarly, Shri Dhanesh Badarmal Jain had made payment of Rs.70,00,000/- in cash and Rs.2.5 Crores in cheque during the aforesaid period. Thus, total consideration of Rs.18,00,00,000/- was already paid by the Third party to the First and Second parties prior to the signing of this agreement. It was explicit from the MOU that this payment made was on account of sale Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 37 of 63 proceeds of 50% share of the nine properties mentioned in the MOU and for joining the partnership. 25.5 The total cost of acquisition of 50% share in the properties listed in the MOU was also worked out in the MOU itself on the basis of prevailing market price of the properties. The details as appearing in this regard as well as the terms of payment appearing in the MOU, is reproduced below: “1) The said property No.1,2 and 8 property total 10647.66 Sq. Yard area land the half share of land means 5323.83 Sq. Yard land calculating at Rs.1,62,000/- Rupees One Lakh Sixty Two Thousands only per square yard in Rs.86,24,60,460/- Rupees Eighty Six Crore Twenty Four Lakhs Sixty Thousands Four Hundred Sixty only. (2) The said property of 3, 4, 5, 6 and 7 total 1915 Sq. Yard area of land the half share of land means 957.05 Sq.Yard land calculating Rs.1,38,700/- Rupees One Lakh Thirty Eight Thousands Seven Hundred only per square yard in Rs.13,28,05,250/- in Rupees Thirteen Crore Twenty Eight Lakhs Five Thousands Two Hundred Fifty only. In all total Rs.99,52,65,710/- Rupees Ninety Nine Crore Fifty Two Lakhs Sixty Five Thousands Seven Hundred Ten only paid by the third party to the first party on equal share as total consideration within the period of every three months. Rs.33,17,55,236/- Rupees Thirty Three Crore Seventeen Lakhs Fifty Five Thousands Two Hundred Thirty Six only shall be paid up to the Date: 31/07/2017. Rs.33,17,55,236/- Rupees Thirty Three Crore Seventeen Lakhs Fifty Five Thousands Two Hundred Thirty Six only shall be paid up to the Date: 31/10/2017. Rs.33,17,55,236 Rupees Thirty Three Crore Seventeen Lakhs Fifty Five Thousands Two Hundred Thirty Six only shall be paid up to the Date: 31.01.2018. From the amount shown herein above after total payment rest of Rs.4,75,00,000/- Rupees Four Crore Seventy Five Lakhs only by the third party to first party, in proportion to the instalment paid by the third party they have been given partnership right in the partnership firm and the right, share of the both the third party partners shall be in proportion to their paid consideration. And the rest of the amount of first instalment and as per the payment of second and third instalment their share shall be increased in the Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 38 of 63 partnership firm and in the same proportion the share of first party decreasing from the partnership firm and every time an Agreement of Modification shall be done in the partnership firm and on payment of full amount the third party shall have right, share 50% in the partnership firm and thereafter only the said partnership firm has been registered. And depositing necessary stamp duty in the office of Hon'ble Sub-Registrar Ahmedabad-7 (Odhav) have to register the Deed of Partnership.” [Emphasis supplied]. It is thus apparent that the new partners had to pay Rs.99,52,65,710/- for acquiring 50% share in the nine properties listed in the MOU, which would have entitled them to have 50% share in the partnership as well. The share in the partnership of the new partners was required to be increased periodically depending upon the payments as per the terms agreed upon. 25.6 Before the CIT(A), the assessee for the first time had taken a plea that the cash payments as noted in the signed MOU dated 05.08.2017 and undated MOUs, were made by the new partners, not to the existing partners of the firm but to the owners of the properties, for acquiring the same as their capital contribution. It was contended that the new partners were to bring-in additional land/properties as their capital contribution to the firm, for which the properties as referred in the MoU dated 05.08.2017 were identified. It was explained that in order to save the cost of the stamp duty, those properties, except the agricultural land, were registered directly in the name of the firm, as capital contribution of new partners. In order to acquire those properties, the cash payments were made by the new partners directly to the owners of the properties whereas the consideration paid through banking channel was routed through the account of the partnership firm. The Ld. CIT(A) had accepted this explanation of the assessee and primarily on this basis he has deleted the addition as made by the AO. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 39 of 63 25.7 The explanation of the assessee made before the Ld. CIT(A) falls flat considering the facts as discussed above and the terms and conditions of the MOU dated 05.08.2017 reproduced earlier. There was no clause in the MOU which required the new partners to bring in properties as their capital contribution. The nine properties referred in the MOU were the properties already owned by the firm and its existing partners and these were not the properties to be brought in by the new partners. It appears that the Ld. CIT(A) had blindly accepted the explanation of the assessee without even going through the clauses of the MOU. The CIT(A) has not referred to any material found in the course of search in support of his findings. We find that there is no mention of any capital contribution by the new partners in the form of immovable properties in the MOU or any other seized document. The contention of the assessee that the cash payments as noted in the MOU were made by the new partners directly to the sellers of the properties, is not backed by any documentary evidence found in the course of search. Therefore, the findings of Ld. CIT(A) that the cash payments as recorded in the seized documents were made by the new partners to the owners of the properties, is found to be fallacious, contrary to the facts on record and can’t be upheld. 25.8 As is evident from the contents of the MOU dated 05.08.2017 reproduced earlier, there was no mention of any capital contribution in the form of land/properties to be made by the new partners (Third party), in the said MOU. Rather, the payment made as per MOU was for acquiring 50% ownership of the 9 properties belonging to the First Party (i.e. the firm and its old partners) as listed in the MOU, by the new partners namely Shri Dhanesh Badarmal Jain and Shri Virendra Amrutbhai Patel, and for acquiring proportionate partnership rights in the firm. The MOU Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 40 of 63 categorically mentions that the total payment of Rs.18,00,00,000/- made during the period 09.05.2017 to 26/07/2017 in cash and by cheque/RTGS was towards consideration for half share of the land. As already mentioned earlier, it was stipulated in the agreement that on payment of 3 instalments as mentioned in the MOU, the shares of the new partners will be increased in the partnership firm in the proportion of the payments made by them. Accordingly, a partnership deed was executed on 14.08.2017 wherein Shri Dhanesh Badarmal Jain and Shri Virendra Amrutbhai Patel were allowed 3.01% and 8.26% share in the partnership in proportion to the payments made by them as per the MOU dated 05.08.2017. In the partnership deed dated 14.08.2017, there was no reference of any cash/cheque payment as appearing in the MOU dated 05.08.2017 and each partner was required to deposit Rs.1,00,000/- only towards their capital contribution. In view of these categorical stipulations in the MOUs, the finding of the Ld. CIT(A) that the cash payment referred in the MOU dated 05.08.2017 was in respect of payment made by the new partners to the owners of the properties for acquiring the same for their capital contribution, is found to be patently wrong and perverse. 25.9 The AO has also referred that as per seized document the total cash payment made by the new partners Sri Virender Patel and Sh. Dhanesh Jain was Rs.24,49,52,330/-. The Revenue has brought on record a copy of another Agreement of Understanding (MOU) executed in April 2018 which is identical to the MOU dated 05.08.2017. In the second MOU also, all the nine properties of the firm/existing partners are found listed. The details of total payment made by the two new partners as per the second MOU is significantly higher than the first MOU. As per this MOU, Shri Virendra Amrutbhai Patel had made cash payment of Rs.22.45 Crores and cheque payment of Rs.13,76,08,500/- during the period from Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 41 of 63 09.05.2017 till the date of this MOU. Similarly, Shri Dhanesh Badarmal Jain had made cash payment of Rs.5,76,84,500/- and cheque payment of Rs.11,32,87,512/- during the same period. This substantiates that the terms of payment as mentioned in the MOU dated 05.08.2017 was acted upon and the payments were periodically made by the new partners to the First party, including the old partners. 25.10 It is found that the Ld. CIT(A) has also given an erroneous finding that the total value of the lands i.e. existing land parcel plus land parcel to be purchased by the new partners as their capital contribution was Rs.193,25,63,800/-. As already demonstrated earlier, no land parcel was required to be brought in by the new partners as their capital contribution. The Assessing Officer, on the basis of the seized documents, had given a categorical finding that the amount of Rs.193,25,63,800/- represented the valuation of land holdings in possession of M/s. Avyaa Developers just prior to introduction of new partners and this finding is found to be correct. Further, at the time of each reconstitution agreement, this value was utilised as a base to determine the proportionate amount to be paid by the new partners for acquiring the desired percentage of share in the partnership firm. In view of this categorical clause in the MOU, the finding of the Ld. CIT(A) that the amount of Rs.193,25,63,800/- represented value of land parcels to be brought in the new partners as their capital contribution, is not found correct. 25.11 The Ld. CIT(A) was guided by the contention of the assessee that the cheque payments made by the new partners towards their capital contribution to the firm was utilised for purchase of immovable properties, which were required to be brought as capital contribution by the new partners. According to the Ld. CIT(A), if the cheque contribution Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 42 of 63 of new partners were utilised towards purchase of land, the cash component mentioned in the same seized material cannot be termed as unaccounted payment to the existing partners. Further, the Ld. CIT(A) held that the cash contribution of the new partners was neither taxable in the hands of the partnership firms nor the existing partners, as the firm was only a conduit for the acquisition of land to be brought as capital contribution by the new partners. Further that, there was no clinching evidence in the seized documents that cash amount was paid to the existing partners. The entire finding of Ld. CIT(A) to allow the relief is based on the wrong premise that the new partners were required to bring in certain properties as their capital contribution. As already mentioned earlier, there was no reference of any immovable property to be brought as capital contribution by the new partners, in the seized MOU. There was nothing unnatural if the cheque payment made by the new partners was subsequently utilised by the firm for acquisition of certain properties, as it was dealing in land development activity. But this does not establish that the cash payment as referred in the seized MOU was made to the land owners for purchase of those properties. At the cost of repetition, we would like to emphasize that the cheque and cash payments appearing in the seized document was the total payment made by the new partners for acquisition of 50% share in the nine properties of the firm as listed in the MOU, in proportion of which their shareholding in the firm was periodically increased. All the existing partners had subsequently retired from the partnership vide final reconstitution agreement made on 29.01.2020 and they had taken their initial capital as per the books only at the time of their retirement. The moot question not examined by the Ld. CIT(A) was why the old partners had taken only their initial capital as per the books, at their retirement; when the actual value of assets Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 43 of 63 of the partnership firm was Rs.193,25,63,800/-. Since the cash component mentioned in the MOU was not accounted for in the books of the partnership firm, the Assessing Officer had rightly concluded that the cash amount was shared by the existing partners for relinquishing their right in properties of the firm as well as in the partnership firm. As the cash payment referred in MOU was not recorded in books of the partnership firm, the cash amount cannot be considered as capital contribution by their new partners. As per MOU also, the cash payment was towards cost of properties of the firm which was being shared with the new partners for joint development of a commercial mall. As all the old partners as well as the new partners were signatory to the MOU dated 5/8/2017, the AO had rightly concluded that the cash amount appearing in the MOUs , and which were not accounted for in the books of the firm, were paid by the new partners to the existing partners towards the cost of the properties of the firm and for relinquishment of their rights in the partnership firm. The cash payment made by the new partners was never denied or disputed. Therefore, the addition of total cash payment of Rs.163,19,94,586/- was rightly made by the Assessing Officer in the hands of the existing partners, which was justified considering the fact that the existing partners had only taken their initial capital in the books of the firm at the time of their retirement. 25.12 It is further found that the Ld. CIT(A) had considered certain extraneous material for allowing relief to the assessee. The Ld. CIT(A) had relied upon the order passed by him in the case of Sh. Virendra Amrutbhai Patel, the new partner, which was not at all relevant for deciding the issue at hand. We cannot go solely by the subsequent explanation of the new partners regarding the utilization of the cash payments, which is not backed by any evidence, and disregarding the Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 44 of 63 evidences found in the course of search. We have to examine the nature of transactions on the basis of the entries as appearing in the seized documents. Further, merely because Shri Virendra Amrutabhai Patel, the new partner, had admitted cash payment and disclosed the same in his return of income, this does not absolve the assessee to explain the nature of cash receipts in his hand. The Ld. CIT(A) had observed that there was no evidence found in the course of search which can prove that Shri Virendra Amrutbhai Patel had paid the cash to the existing partners. In fact, no evidence was found in the course of search which could establish that the cash payments were made to the land owners for acquisition of certain properties by the new partners as their capital contribution, as contended. Rather the MOU dated 05.08.2017 and subsequent agreements between the old partners and the new partners substantiate the fact that the cash payment was received by the old partners for relinquishing their rights in the partnership firm, as the cash payments were not recorded in the books of the firm. The evidences found in the course of search and all other circumstantial evidences lead to the only conclusion that the cash payments mentioned in the MOU were received by the existing partners and not by the land owners for any property transactions. 25.13 In view of the above facts, we are of the considered opinion that the Ld. CIT(A) was not correct in holding that the cash amount mentioned in the MOU was paid to the owners of the properties and not to the firm or its existing (old) partners. This finding of the Ld. CIT(A) is found to be perverse and not on the basis of any evidence found in the course of search. Therefore, the order of the Ld. CIT(A) is quashed and the addition of Rs.3,06,19,041/- as made by the Assessing Officer in respect of cash contribution received by the assessee towards Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 45 of 63 relinquishment of his share in the partnership firm, is upheld. The grounds taken by the Revenue are allowed. 25.14 In the result, the appeal of the Revenue is allowed. IT(SS)A No.139/Ahd/2024 – AY – 2018-19 Manish S Dalmia IT(SS)A No.146/Ahd/2024 – AY 2018-19 Ashokbhai Jagubhai Kheni, and IT(SS)A No.153/Ahd/2024 – AY 2018-19 Sh. Hiteshkumar Hiralal Patel 26. All the grounds taken by the Revenue in these three appeals are identical to IT(SS)A No.143/Ahd/2024 in the case of Late Shri Surender Dalmia for AY 2018-19, except for the quantum of addition as appearing in ground no.1. The Ld. CIT(A) too has followed the decision in the case of Late Surendra Dalmia to decide these appeals. As the facts of these three appeals are identical to the facts of Late Shri Surender Dalmia, the decision taken in IT(SS)A No.143/Ahd/2024 is applicable mutatis mutandis to these appeals as well. Accordingly, these three appeals of the Revenue, are allowed. IT(SS)A No.124/Ahd/2024 – AY 2018-19 - Late Surendra Kumar Dalmia 27. This appeal is filed by the assessee and the grounds taken in this appeal are as under: “1. On the facts and circumstances of the case, the learned CIT(A) has erred in disallowing the expenses of Rs.13,17,728/- rightly claimed by the Assessee u/s. 57 of the Act. 2. On the facts and circumstances of the case as well as law on the matter, the CIT(A) has erred in proposing to tax the addition made to Assessee's income at rate specified u/s. 115BBE of the Act 3. On the facts and circumstances of the case as well as law on the matter, the CIT(A) has erred in proposing penalty u/s. 270A of the Act, in the case of Assessee, when the primary addition made to his income is itself devoid of any merits. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 46 of 63 4. On the facts and circumstances of the case as well as law on the matter, when the primary addition made to the income of Assessee do not stand any merit, demand raised on such addition needs to be deleted. 5. On the facts and circumstances of the case as well as law on the matter, the CIT(A) has erred in non-consideration of additional evidence submitted by the Assessee. 6. The appellant craves leave to add, alter, modify or delete any or all he grounds of appeal during the appeal proceedings.” 28. The first ground taken by the assessee is regarding disallowance of expense of Rs.13,17,728/- u/s 57 of the Act. In the course of assessment, the AO required the assessee to provide the evidences in support of the expenses incurred and the deduction claimed u/s 57 of the Act. Since there was no compliance by the assessee, the AO disallowed the claim of Rs.13,17,728/-. The Ld. CIT(A), while upholding the addition made, had directed the AO to verify the disallowance of Rs.13,17,728/-; as according to the assessee an expenditure of Rs.2,78,815/- only was claimed u/s 57 of the Act. Shri Satya Prakash, Ld. AR of the assessee submitted that the Ld. CIT(A) was not correct in confirming the deduction claimed u/s 57 of the Act. On the other hand, the Ld. CIT-DR supported the order of the Ld. CIT(A) on this issue. 29. We have considered the rival submissions. Before the AO, no compliance was made by the assessee and, therefore, the AO had made the disallowance of Rs.13,17,728/- u/s 57 of the Act. However, the basis of the disallowance was nowhere mentioned in the assessment order. Before the Ld. CIT(A) the assessee had submitted that the expense of Rs.2,78,815/- only was claimed as deduction u/s 57 of the Act, the details of which was also filed. However, the assessee had not explained as to how this expense of Rs.2,78,815/- was laid out wholly and exclusively for the purpose of earning of the income from other sources. Before us also, Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 47 of 63 no explanation has been given in this respect. Under the circumstances, we do not find any reason to interfere with the order of the Ld. CIT(A) on this issue. As regarding quantum of disallowance, the Ld. CIT(A) has already directed the AO to verify the correctness of the amount of disallowance as made u/s 57 of the Act. Therefore, the order of the Ld. CIT(A) does not call for any interference. Accordingly, the ground taken by the assessee is dismissed. 30. The second ground pertains to invoking the provisions of section 115BBE of the Act for taxing the addition of Rs.3,06,19,041/- made u/s 69 of the Act. We find that the ground taken by the assessee in this regard before the Ld. CIT(A) was allowed for the reason that the addition made u/s 69 of the Act in respect of cash received on relinquishment of share- holding right was deleted. It is found that the Assessing Officer had made the addition of Rs.3,06,19,041/- u/s 69A of the Act. As per the provisions of section 69A of the Act, if the assessee is found to be owner of any money, bullion, jewellery or other valuable articles, which is not recorded in the books of account and the assessee offers no explanation about the nature and source of the assets, then such assets will be treated as deemed income. In the present case, no money, bullion, jewellery or other valuable articles were found and no addition has been made in this respect. Therefore, the provisions of section 69A of the Act is not found attracted in the present case. The amount received by the assessee towards relinquishment of his rights in the partnership firm is required to be taxed as capital gains. Capital asset has been defined in section 2(14) of the Act, as meaning \"Property\" of any kind held by the assessee, whether or not connected with his business or profession. The share or interest of a partner in the partnership and its assets would be property and, therefore, a capital asset within the meaning of the aforesaid Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 48 of 63 definition. The transfer of interest in the partnership firm by an existing or a retiring partner in favour of new or its continuing partners would attract a charge under section 45 of the Act. Accordingly, the amount received by the assessee from the new partners towards relinquishment of his rights in the partnership firm, over and above the sum outstanding to the credit of capital account of the partner in the firm, is required to be taxed as income from capital gains. Accordingly, the ground taken by the assessee is allowed. 31. All other grounds taken by the assessee are only consequential in nature. In fact, the ground no.5 taken by the assessee is not found applicable as no addition for any unsecured loan was made in this year. Therefore, all the other grounds, as taken by the assessee, are rejected. 32. In the result, the appeal of the assessee is partly allowed. IT(SS)A No.122/Ahd/2024– AY – 2018-19 Manish Surendrakumar Dalmia 33. The grounds taken by the assessee in this appeal are under: - 1. On the facts and circumstances of the case, the learned CIT(A) has erred in disallowing the expenses of Rs.13,17,728/- rightly claimed by the Assessee u/s. 57 of the Act 2. On the facts and circumstances of the case as well as law on the matter, the CIT(A) has erred in proposing to tax the addition made to the Assessee's income at rate specified u/s.115BBE of the Act 3. On the facts and circumstances of the case as well as law on the matter, the CIT(A) has erred in proposing penalty u/s. 270A of the Act, in the case of Assessee, when the primary addition made to his income is itself devoid of any merits. 4. On the facts and circumstances of the case as well as law on the matter, when the primary addition made to the income of Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 49 of 63 Assessee do not stand any merit, demand raised on such addition needs to be deleted. 5. On the facts and circumstances of the case as well as law on the matter, the CIT(A) has erred in non-consideration of additional evidence submitted by the Assessee. 6. The appellant craves leave to add, alter, modify or delete any or all the grounds of appeal during the appeal proceedings.” 34. Ground no.1 pertains to disallowance of Rs.13,17,728/- made u/s 57 of the Act. The AO had made the addition for the reason that no details in this respect were filed by the assessee in the course of assessment. Before the Ld. CIT(A), the assessee had filed the details of expense of Rs.13,17,728/- claimed as deduction u/s 157 of the Act. However, the assessee was unable to establish that these expenses were laid out or expended wholly and exclusively for the purpose of earning of income taxable under the head “income from other source”. In the absence of any justification/explanation on the part of the assessee, the Ld. CIT(A) had confirmed the addition made by the AO. Before us also, the assessee has been unable to produce any evidence to explain as to how the expense of Rs.13,17,728/-, incurred mostly on account of interest on unsecured loans, professional fee, bank charges etc., was laid out wholly and exclusively for the purpose of earning of other income. In the absence of any material to justify the deduction u/s 57 of the Act, we do not find any reason to interfere with the order of the Ld. CIT(A). Accordingly, the decision of the Ld. CIT(A) on this issue is upheld and the ground taken by the assessee is dismissed. 35. The other grounds taken by the assessee in this appeal are identical to the ground taken in IT(SS)A No.124/Ahd/2024 in the case of Late Shri Surender Dalmia for the A.Y. 2018-19. Therefore, the decision taken by Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 50 of 63 us in that appeal on these grounds is applicable to the grounds taken by the assessee in the present appeal as well. Accordingly, the appeal of the assessee is partly allowed. IT(SS)A No.140/Ahd/2024 – AY - 2020-21 : Shri Manish S Dalmia 36. This appeal filed by the Revenue pertains to A.Y. 2020-21. The grounds taken by the Revenue in this appeal are as under: “1. The Learned CIT(A) has erred in deleting the addition of unexplained money of Rs.17,33,80,282/- u/s.69A of the Income Tax Act without appreciating the seized incriminating documents & registered agreement dated 05.08.2017 2. The Learned CIT(A) has erred in not considering the reconstitution agreements of the partnership firm 'Avyaa Developers' including the latest agreement dated 29.01.2020, duly notarized and found during the search, which showed that the assessee had retired from the partnership firm. 3. The Learned CIT(A) has erred in not appreciating that filing of another agreement after the date of search, particularly when the firm did not file its regular return before due date, was only an afterthought and not valid in the eyes of law, and any such agreement cannot have retrospective operation but may only be considered as fresh agreement. 4. The Learned CIT(A) has erred in deleting the addition of unexplained investment of Rs.45,50,000/- u/s. 69 of the Income tax Act ignoring the facts of the case that the assessee had not sufficient balance to purchase shop. 5. The Revenue craves leave to add/alter/amend and/or substitute any or all of the grounds of appeal.” 37. The first three grounds taken by the Revenue are identical to the grounds taken in the case of Late Surendra Kumar Dalmia for AY 2018- 19 (IT(SS)A No.143/AHD/2024) adjudicated earlier. The specific facts pertaining to this year are that in the course of search, a deed of retirement dated 29.01.2022 was found, as per which the three old partners, namely Shri Ashokbhai Jagubhai Kheni, Shri Manish Surendra Dalmia & Shri Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 51 of 63 Hiteshkumar Hiralal Patel were retired from the partnership of M/s. Avyaa Developers. As per this deed of retirement, the share of two continuing partners Shri Virendra Amrutbhai Patel and Shri Dhanesh Badarmal Jain was increased to 79.20% and 20.80% respectively. This deed was duly notarised and signed by all the partners and is found reproduced in the assessment order. Since the entire ownership of the partnership firm was taken over by the new partners in this year, the Assessing Officer had concluded that the old partners had taken away their initial capital as per books of account at the time of retirement. However, the total actual consideration of transaction as per MOU dated 05.08.2017 was Rs.193,25,63,800/-. The Assessing Officer found that the recorded capital of Shri Virendra Amrautbhai Patel and Shri Dhanesh Bardarmal Jain, the two continuing partners, as on 30.03.2020 was Rs.20,82,60,000/- and Rs.9,23,09,214/- respectively. Thus, the total unaccounted investment of new partners for acquiring total control of the partnership was Rs.163,19,94,586/- which was held as unaccounted income of the old partners. The Assessing Officer had apportioned this unaccounted income in the hands of three retiring partners in the proportion of their share-holding and accordingly made the addition after reducing the amounts as already added in this respect in the A.Y. 2018-19. Accordingly, an addition of Rs.17,33,80,282/- was made in the case of the assessee in this year. The Ld. CIT(A) had deleted this addition for the reason that the addition made in the A.Y. 2018-19 was already deleted by him and also on the basis of his finding that the deed of retirement dated 29.01.2020 was never acted upon. 38. We have extensively heard the Ld. CIT-DR and the Ld. AR and carefully gone through the facts and findings as recorded by the Ld. CIT(A). The finding of Ld. CIT(A) that the cash payment, as noted in the Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 52 of 63 MOU dated 05.08.2017, was made by the new partners directly to the sellers of the properties and not to the firm or the existing partners, has already been discussed in detail while adjudicating the appeals of the Revenue for the A.Y. 2018-19 and this finding has been reversed. As regards the deed of retirement dated 29.01.2020, the Ld. CIT(A) has given a finding that this deed was never acted upon and the old partners had not retired from the partnership, for the reason that the old partners had not taken away their capital balance from the firm. He has also relied upon the return of income filed by M/s Avyaa Developers for A.Y. 2020- 21, wherein the share of the new partners Shri Virendra Amrutbhai Patel was shown at 25% only. The Ld. CIT(A), on the basis of the additional evidences filed before him, had given a finding that no old partners had retired but one of the new partners, Shri Virendra Amrutbhai Patel, had subsequently retired from the partnership. 38.1 We have carefully gone through the deed of retirement dated 29.01.2022 which is reproduced in the assessment order. It transpires that the partnership had commenced on 01.10.2015 and was amended on 30.01.2016, 14.08.2017, 06.12.2018 and on 17.05.2019; before the execution of the present retirement deed on 29.01.2020. As per this retirement deed, all the three old partners, Shri Ashokbhai Jagubhai Kheni, Shri Manish Surendra Dalmia & Shri Hiteshkumar Hiralal Patel had retired from the partnership w.e.f. 29.01.2020 and the partnership was continued by the two remaining partners Shri Virendra Amrutbhai Patel and Shri Dhanesh Badarmal Jain, having share of 79.20% and 20.80% respectively. Merely because the share of Shri Virendra Amrutbhai Patel in the partnership deed was disclosed at 25% in the Income-tax return of the firm for the AY 2020-21, it cannot be concluded that that the deed of retirement dated 29.01.2020 was not acted upon. The Ld. CIT(A) did not Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 53 of 63 examine the percentage of shareholding of the partners at the time of each of the earlier reconstitution of the partnership deed on 30.01.2016, 14.08.2017, 06.12.2018 and 15.05.2019 and verified as to whether the ratio of the partnership as per these deeds were correctly disclosed in the Income-tax return of the partnership firm for different years. Merely because the share of partners was wrongly reported in the Income-tax return, it cannot be held that the deed of retirement dated 29.01.2020 was not acted upon. Similarly, the non-withdrawal of the capital of the retiring partners also cannot be adversely considered for negating the retirement deed. The profit or loss till the date of retirement is required to be accounted for in the capital account of the retiring partners in the year of retirement and for this reason their account may not be immediately squared off. The non-withdrawal of the capital of the retiring partners may also be for the reason that no liquid cash is available with the firm. Similarly, there can be many other reasons for immediate non-withdrawal of the capital of the retiring partners and that does not prove that the partners had not retired. 38.2 The provisions of Section 292C of the Act stipulates that the contents of the books of account and other documents found during the course of search will be considered as true and correct. Therefore, the retirement deed dated 29.01.2022 found in the course of search must be held as correct. This retirement deed was not a dumb document but clearly stipulated the retirement of the three old partners, was duly signed by the all the partners and also notarized by a Registered Notary and there was no reason to disbelieve the same. The Revenue has raised objection that the Ld. CIT(A) was not correct in relying upon certain additional evidences, which was for the period subsequent to the date of search and not found in the course of search, to negate the evidences found in the Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 54 of 63 course of search. The objection of the Revenue is valid and well founded, as there is no guarantee that certain evidences are not manufactured after the date of search, in order to negate the evidentiary value of the documents found in the course of search. Therefore, the Ld. CIT(A) was not correct in relying upon the evidences filed before him which pertained to the period after the search. 38.3 The Ld. CIT(A) has observed that no evidence for payment of cash pertaining to this year was found in the course of search. The undisputed fact is that there were payments of cash, which were categorically mentioned in the original MOU dated 05.08.2017 and also in the subsequent MOU, as already discussed earlier. Further, the payment of cash was neither denied by the new partners. The total valuation of the properties and the amount to be paid by the new partners was already documented in the MOU dated 05.08.2017 which was also not disputed by the new partners. The finding of the Ld. CIT(A) that the cash was paid to the land owners and not to the existing partners, has already been negated by us earlier while deciding the appeals for the A.Y. 2018-19 and it has been held that the cash was received by the existing partners only. Thus, the decision of the Ld. CIT(A) to delete the addition of Rs.17,33,82,800/- made in the current year is based on incorrect findings and, therefore, his decision is liable to be reversed. 38.4 The AO, on the basis of the retirement deed dated 29.01.2020 had concluded that the entire payment as per original MOU dated 05.08.2017 was received in the current year. Accordingly, the AO had made addition for the entire unaccounted investment of new partners of Rs.163,19,94,586/- in the current year, after allowing relief for cash amount already brought to tax in the AY 2018-19. However, the fact that Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 55 of 63 there was reconstitution of the partnership deed on 6th December 18, in FY 2018-19 relevant to AY2019-20 was not considered by the AO. He didn’t examine all the reconstitution agreements and worked out the cash amount flowing to the old partners on the basis of percentage of shareholding allotted to the new members at the time of each reconstitution. Considering this fact, the addition of Rs.17,33,82,800/- as made by the AO in the current year cannot be upheld. It is trite law that the income has to be brought to tax in the correct year. We, therefore, deem it proper to set aside the matter to the file of the AO with a direction to examine the reconstitution agreements of the partnership deed made in the preceding years and bring to tax only the differential amount of the cash received during the year vis-à-vis the earlier deeds. 38.5 The grounds taken by the Revenue are allowed for statistical purpose. 39. Ground No-4 taken by the Revenue pertains to addition of Rs.45,50,000/- on account unexplained investment in certain properties. Before the AO, no explanation was given by the assessee regarding the source of the investment in the properties. The assessee had, however, furnished all the details of investment before the Ld. CIT(A) which was forwarded to the AO for comments. In the remand report, the AO didn’t make any adverse comment on the additional evidences filed before the Ld. CIT(A) explaining the source of investment in the properties. The Ld. CIT(A) after considering the evidences brought on record and the fact that the investment was made out of the saving bank’s account of the assessee, had held that the source of investment made by the assessee was duly explained. The Revenue has been unable to controvert the Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 56 of 63 findings of Ld. CIT(A) on this issue. Therefore, we do not find any reason to interfere with the order of the Ld. CIT(A). The ground taken by the Revenue is dismissed. 40. In the result the appeal of the Revenue is partly allowed for statistical purpose. IT(SS)A No.147/Ahd/2024 – AY 2020-21 Sh. Ashokbhai J Kheni, and IT(SS)A No.154/Ahd/2024 – AY 2020-21 Sh. Hiteshkumar Hiralal Patel 41. All the grounds taken by the Revenue in these two appeals are identical to IT(SS)A No.140/Ahd/2024 in the case of Shri Manish Surendra Kumar Dalmia except for the quantum of addition as appearing in ground no.1. In the case of Sh. Ashokbhai Kheni, an addition of Rs.95,34,38,820/- was made in the AY 2020-21 in respect of proportionate cash receipts during this year for retiring and complete relinquishment of his right in the partnership firm M/s. Avyaa Developers. Similarly, in the case of Sh. Hiteshkumar Patel, addition of Rs.13,88,24,263/- was made in the AY 2020-21 on this account. The Ld. CIT(A) has followed his decision in the case of Shri Manish Surendra Dalmia to decide these appeals. As the facts of these two appeals are identical to the facts of Shri Manish Surender Dalmia, the decision taken in IT(SS)A No.140/Ahd/2024 is applicable mutatis mutandis to these appeals as well. Accordingly, these two appeals of the Revenue, are allowed for statistical purpose. IT(SS)A No.123/Ahd/2024 – AY – 2020-21 – Shri Manish S Dalmia 42. The grounds taken by the assessee in IT(SS)A No.123/Ahd/2024 for AY 2020-21 are identical to the grounds in IT(SS)A No.122/Ahd/2024, except the quantum of addition in ground-1. The facts being identical, the decision of IT(SS)A No.122/Ahd/2024 is applicable mutatis mutandis to Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 57 of 63 IT(SS)A No.123/Ahd/2024 as well. Accordingly, the appeal of the assessee in IT(SS)A No.123/Ahd/2024 for AY 2020-21 is partly allowed. Protective addition for cash receipts in M/s. Avyaa Developers: IT(SS)A No.150/Ahd/2024 & IT(SS)A No.120/Ahd/2024 – AY 2018-19 – IT(SS)A No.151/Ahd/2024 & IT(SS)A No.121/Ahd/2024 – AY 2020-21 – 43. These cross appeals are filed by the Revenue and the assessee for the AY 2018-19 & 2020-21 respectively. We will first take up the appeals of the Revenue. IT(SS)A No.150/Ahd/2024 - AY 2018-19 44. The grounds taken by the Revenue in this appeal are as under: - “1. The Learned CIT(A) has erred in deleting the addition of unexplained money of Rs.24,49,52,330/- u/s. 69A of the Income Tax Act without appreciating the seized incriminating documents & registered agreement dated 05.08.2017. 2. The Learned CIT(A) has erred in deleting the protective addition of the assessee firm by observing that substantive additions has been made in the case of partners whereas the substantive additions made in the hands of the partners had been deleted by him. 3. The Learned CIT(A) has erred in deleting the addition of unexplained credits of Rs.4,54,33,517/- out of total addition of Rs.9,03,28,725/- u/s.68 of the Income Tax Act ignoring the facts of the case that during the assessment proceedings the assessee firm failed to provide the complete details of lenders. 5. The Revenue craves leave to add/alter/amend and/or substitute any or all of the grounds of appeal.” Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 58 of 63 45. The first two grounds taken by the Revenue pertain to addition of Rs.24,49,52,330/- made on protective basis in the hands of the assessee in respect of cash receipts from the new partners for the acquisition of right in the partnership firm. We have heard the Ld. CIT-DR and the Ld. AR on this issue. It is found that the substantive addition for this amount was made in the hands of the old partners on proportionate basis. The Ld. CIT(A) had deleted the protective addition made in the case of the assessee for the reason that the substantive addition made in the case of the old partners was also deleted. We have, however, upheld the substantive addition in the hands of the old partners. Since the addition in respect of cash receipts by the old partners for relinquishment of their rights in the partnership firm is already confirmed in the hands of the old partners, the same amount cannot be added in the hands of the partnership firm, as it will tantamount to double addition. Therefore, the protective addition made in the hands of the partnership firm is liable to be deleted. Accordingly, the grounds taken by the Revenue are rejected. 46. The ground no.3 taken by the Revenue pertains to addition in respect of unexplained credit of Rs.9,03,28,725/- in respect of unsecured loans taken during the year. The Assessing Officer had made the addition for the reason that the assessee had submitted only list of unsecured lenders but identity of the lenders, their creditworthiness and the genuineness of the transactions were not established. The Ld. CIT(A) had upheld the addition to the extent of Rs.4,48,96,208/- and deleted the balance addition of Rs.4,54,33,517/-. Both the Revenue and the assessee are in appeal on this issue. 47. We have heard the Ld. CIT-DR as well as the Ld. AR and carefully gone through the order of the Ld. CIT(A). It is found that the loan of Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 59 of 63 Rs.9,03,28,725/- was taken from 24 creditors. In the course of appeal proceedings, the assessee had furnished additional evidences in support of the loans taken which was forwarded to the AO for his report. The remand report sent by the AO was provided to the assessee, who had filed its rejoinder. Considering the additional evidences brought on record in the course of appeal proceedings, the remand report of the AO as well as the rejoinder of the assessee, the Ld. CIT(A) had deleted the addition of Rs.4,54,33,517/- in respect of unexplained credits. It is found that the Ld. CIT(A) had extensively discussed the evidences brought on record in respect of creditors and, thereafter, allowed relief to the assessee. The Ld. CIT(A) had deleted the additions to this extent by considering the fact that the repayment of certain loans was already made by the assessee and, therefore, it couldn’t be treated as unexplained. Further, the creditworthiness of the lenders was also established with supporting evidences in the form of balance sheet, capital account, copy of income tax return etc. The Revenue has been unable to controvert the findings of the Ld. CIT(A) in respect of deletion of unexplained credit of Rs.4,54,33,517/- in respect of unsecured loan. Therefore, we do not find any reason to interfere with the order of the Ld. CIT(A). Since we don’t find any infirmity in the order of the Ld. CIT(A) on this issue, the ground taken by the Revenue is dismissed. 48. In the result, the appeal filed by the Revenue is dismissed. IT(SS)A No.151/Ahd/2024 - AY 2020-21 49. The two grounds taken by the Revenue in this appeal are identical to the first two grounds in IT(SS)A No.150/Ahd/2024 except the quantum of addition in ground no.-1. There is no ground in respect of addition in respect of unexplained credit in this year. The facts being identical, the Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 60 of 63 decision of IT(SS)A No.150/Ahd/2024 is applicable mutatis mutandis to IT(SS)A No.151/Ahd/2024. Accordingly, the appeal of the Revenue in IT(SS)A No.151/Ahd/2024 for AY 2020-21 is dismissed. IT(SS)A No.120/Ahd/2024 – AY 2018-19 50. The grounds taken by the assessee in this appeal are as under: “1. On the facts and circumstances of the case as well as law on the matter, the CIT(A) has erred in sustaining addition of Rs.4,48,95,208/- out of the total addition of Rs.9,03,28,725/- as unexplained cash credit u/s.68 of the act. 2. On the facts and circumstances of the case as well as law on the matter, the Assessing Officer has erred in proposing to tax the addition made to Assessee's income at rate specified u/s.115BBE of the Act 3. On the facts and circumstances of the case as well as law on the matter, the Assessing officer has erred in proposing penalty u/s. 271AAC of the Act, in the case of Assessee, when the primary addition made to its income is protective in nature and not substantive. 4. On the facts and circumstances of the case as well as law on the matter, when the primary addition made to the income of Assessee do not stand any merit, demand raised on such addition needs to be deleted. 5. The appellant craves leave to submit additional evidences during the course of appeal proceedings pertaining to the unsecured loans addition which is sustained. 6. The appellant craves leave to add, alter, modify or delete any or all the grounds of appeal during the appeal proceedings.” 51. The first ground taken by the assessee is in respect of addition of Rs.4,48,95,208/- in respect of unsecured loan confirmed by the Ld. CIT(A). The Ld. AR has submitted that unsecured loan was confirmed by the Ld. CIT(A) to this extent for the reason that the assessee was unable Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 61 of 63 to produce copy of balance sheet/capital account and other supporting documents in respect of the some of the loan creditors. The assessee has filed an application under Rule 29 of the Income Tax (Appellate) Tribunal’s Rule for admission of additional evidences in respect of loan creditors. The Ld. AR has explained that these evidences were not available with the assessee, hence it could not be filed before the AO or before the Ld. CIT(A). He submitted that it had taken considerable time to collect the evidences from the concerned loan creditors, hence the request for admission of the additional evidences. Considering the explanation of the assessee, we are of the considered opinion that the matter regarding confirmation of addition of Rs.4,48,95,208/- in respect of unsecured loan needs to be set aside to the file of the AO in order to examine the additional evidences brought on record by the assessee in the course of present appeal. The assessee is directed to file these additional evidences before the AO in the course of set aside proceedings. At the same time, the Assessing Officer is directed to admit these additional evidences and re-adjudicate the issues of addition of unexplained credit in respect of loan of Rs.4,54,33,517/-, confirmed by the Ld. CIT(A), after examining the additional evidences filed by the assessee. Needless to mention, the AO will be free to conduct enquiry in respect of these additional evidences, as deemed fit. The ground of the assessee is allowed for statistical purpose. 52. The other grounds taken by the assessee are identical to the grounds as taken in the case in IT(SS)A No.124/Ahd/2024 in the case of Late Shri Surender Dalmia. Therefore, the decision taken by us in that appeal is applicable in the present case as well. 53. In the result, the appeal filed by the assessee is partly allowed. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 62 of 63 IT(SS)A No.121/Ahd/2024 - AY 2020-21 54. The grounds taken by the assessee in this appeal are identical to the grounds in IT(SS)A No.120/Ahd/2024 except the quantum of addition in ground no.-1. The facts being identical, the decision of IT(SS)A No.120/Ahd/2024 is applicable mutatis mutandis to IT(SS)A No.121/Ahd/2024. Accordingly, the appeal of the assessee in IT(SS)A No.121/Ahd/2024 for AY 2020-21 is partly allowed. 55. The final outcome of these appeals is summarized in the table below: Sl. No. ITA No. A.Y. Appeal filed by Outcome 1-2 IT(SS)A Nos.148 & 149/Ahd/2024 2016-17 & 2017-18 Revenue Dismissed 3-4 IT(SS)A Nos.137 & 138/Ahd/2024 2016-17 & 2017-18 Revenue Dismissed 5-8 IT(SS)A Nos.141, 142, 144 & 145/Ahd/2024 2016-17 & 2017-18 Revenue Dismissed 9 IT(SS)A Nos.165/Ahd/2024 2016-17 Revenue Allowed for statistical purpose. 10 IT(SS)A Nos.152/Ahd/2024 2017-18 Revenue Dismissed 11 IT(SS)A Nos.143/Ahd/2024 2018-19 Revenue Allowed 12- 14 IT(SS)A Nos.139, 146, 153/Ahd/2024 2018-19 Revenue Allowed 15- 16 IT(SS)A Nos.122 & 124/Ahd/2024 2018-19 Assessee Partly Allowed 17 IT(SS)A Nos.140/Ahd/2024 2020-21 Revenue Partly Allowed for statistical purpose. Printed from counselvise.com IT(SS)A No. 137/Ahd/2024 and 23 others (Avyaa Developers Group) Assessment Years:2016-17, 17-18,18-19 & 20-21 Page 63 of 63 18- 19 IT(SS)A Nos.147 & 154/Ahd/2024 2020-21 Revenue Allowed for statistical purpose. 20 IT(SS)A No.123/Ahd/2024 2020-21 Assessee Partly Allowed 21- 22 IT(SS)A No.150 & 151/Ahd/2024 2018-19 & 2020-21 Revenue Dismissed 23- 24 IT(SS)A No.120 & 121/Ahd/2024 2018-19 & 2020-21 Assessee Partly Allowed Order pronounced in the open Court on this 26th August, 2025. Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 26th August, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) The PCIT (4) The CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad Printed from counselvise.com "