DEPUTY COMMISSIONER OF INCOME TAX, AHMEDABAD V. SAFAL GOYAL REALTY LLP, AHMEDABAD

ITSSA 37/AHD/2024

AI Insights

The case revolves around the Revenue's appeal against the order of the Ld. Commissioner of Income-tax (Appeals)-11, Ahmedabad, which had deleted the additions made by the Assessing Officer on account of alleged unexplained investments and expenditures by Safal Goyal Realty LLP. The additions were initially based on a Memorandum of Understanding (MoU) and the statement of a broker, Mr. Suresh Thakkar, suggesting that substantial 'on-money' payments were made in cash for real estate transactions. The CIT(A) found that the MoU relied upon by the Assessing Officer was not acted upon and that a subsequent MoU, which reduced the sale consideration, was ignored by the Assessing Officer. The Tribunal agreed with the CIT(A)'s findings, noting the lack of substantive evidence to support the Revenue's claims and the higher than market value paid by the assessee, which contradicted the allegations of underreporting.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669117 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-06-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2019-2020
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARTIKCHOKSHI
• Assessee Lawyers: PRATHVI RAJ MEENA
• Keywords: Business income; Revised return; Corroborative evidences; Unexplained expenditure; Unexplained investment; Sale consideration of property below Jantri Value
• Section: 132; 131; 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 (Assessment Year: 2019-20) Deputy Commissioner of Income-tax, Ahmedabad Vs. Safal Goyal Realty LLP, 101, 10th Floor, Commerce House IV, Beside Reliance Petrol Pump, Satellite Road, Ahmedabad, Gujarat-15 [PAN : ACIFS 8356 D] (Appellant) .. (Respondent & Cross-Objector) Appellant by : Shri Vartik Chokshi, AR Respondent by: Shri Prathvi Raj Meena, CIT-DR Date of Hearing 07.04.2025 Date of Pronouncement 26 .06.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the Revenue against the order passed by the Ld. Commissioner of Income-tax (Appeals)-11, Ahmedabad (hereinafter referred to as \"CIT(A)\" for short) dated 18.03.2024 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as \"the Act\" for short], for Assessment Year (AY) 2019-2020. On receipt of notice in the Revenue’s appeal, the assessee has filed Cross-Objection bearing No. 23/Ahd/2024. 2. The Revenue has taken following grounds of appeal:- “1. In the facts and on the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of Rs. 36,82,91,993/- on account of unexplained investment u/s 69B r.w.s. 115BBE of the Act. 2. In the facts and on the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of Rs.33,16,460/- on account of unexplained investment u/s 69C r.w.s. 115BBE of the Act.” IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 Assessee : Safal Goyal Realty LLP Asst. Year : 2019-20 - 2– Addition on account of unexplained investment u/s 69B of the Act:- 3. The assessee-firm, engaged in the business of construction, filed its original return on 17.10.2019 declaring income of Rs. 71,66,91,010/-, and a revised return on 24.09.2020 declaring Rs. 70,71,86,430/-. During a search & seizure action u/s 132 of the Act carried out in the case of Shri Suresh Thakkar on 15.10.2019, a MoU dated 01.12.2017 was found showing land sale details involving the assessee. The MoU indicated land having 36,543 sq. yds. at Shela Village, Sanand was sold at Rs. 18,151 per sq. yd., totaling Rs. 66,32,91,993/-. The registered price was only Rs. 29,50,00,000/-, with the balance Rs. 36,82,91,993/- allegedly paid in cash. Based on the MoU and Thakkar’s statement under section 131 of the Act, the Assessing Officer treated the cash portion (on-money paid in cash) as unexplained investment and added Rs. 36,82,91,993/- to the assessee’s income under section 69B r.w.s. 115BBE of the Act. 4. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A) who deleted the addition made by the Assessing Officer u/s 69B of the Act by observing as follows: “5.3 During the course of appellate proceedings, the appellant has contended that during the course of search at the premises of Shri Suresh Thakkar, no incriminating evidences or cash trail representing on-money payment by appellant to seller was found. Further, the appellant argued that AO has incorrectly decoded MoU and arrive at on-money and also not considered the revised price in 2nd MoU which was revised on account of pending litigation, thus addition is not justified mainly on following grounds: (i) AO has worked out agreed purchase consideration as per 1st MoU at Rs. 66,32,92,993/- by multiplying total plot area i.e. 36,543 Sq. yds. With rate per Sq. yard and made present on-money addition. However, in fact such rate was agreed for final plot area which is actually allotted to appellant i.e. 21,925 Sq. yard. Thus, even as per 1st MoU, agreed purchase consideration comes to IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 Assessee : Safal Goyal Realty LLP Asst. Year : 2019-20 - 3– Rs.39,79,60,675/- (final plot area 21,925 Sq. yds. x Rs.18,151) and not Rs.66,32,92,993/- (Total plot area 36,543 Sq. yds. x Rs. 18,151). (ii) A.O. has placed reliance on statement of Shri Suresh R. Thakkar_for interpreting such MoU and making addition. However, 1st MoU in which Shri Suresh Thakkar was acted as broker, cancelled subsequently and not acted upon and deal based on such MoU could not be completed by Shri Suresh Thakkar due to his inability to resolve dispute and litigation pertaining to title and possession of land which is evident from absence of signature of Shri Suresh Thakkar on final/2nd MoU. Further, Shri Suresh Thakkar has denied any transaction as per MoU dated 01.12.2017, which is also mentioned by the AO at para 5.10 of his order. (iii) The AO has neither brought on record anything to prove that statement of Shri Suresh Thakkar is correct nor provided any cross- examination of Shri Suresh Thakkar though specifically asked by appellant during the assessment proceedings. (iv) Value of land arrived by the AO i.e. Rs.66.32 Crore is nowhere mentioned in 1 MoU. Further, such MoU was executed on 01.12.2017 and search in case of Suresh Thakkar had taken place on 15.10.2019 after almost two years from execution of such MoU and it is impossible for such prominent broker who is engaged in many deals to remember exact deal value of such land more particularly when it is nowhere mentioned in MoU. (v) The AO had not found anything from the premises of Shri Suresh Thakkar except such 1st MoU even though exhaustive search action was carried out. Further, search action was also carried out at premise of M/s. Shivalik Jhanvi Infraspace LLP (seller), still no evidence proving such alleged on-money has been found and Second MoU explaining the need for changing terms and agreement as per 1st MoU and revised value was found during the course of search at the premises of seller itself. (vi) The AO in assessment order has stated that there is no proper justification for reduction of sale consideration in 2nd MoU and rejected the same without considering copy of complaints filed by appellant for resolving disputes which was not resolved yet, such copies were also submitted during the course of assessment proceedings. The appellant has also explained that on land purchased by it, scheme was developed and such scheme was not made on entire bunch of land as purchased by it as possession of IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 Assessee : Safal Goyal Realty LLP Asst. Year : 2019-20 - 4– certain part of land is still in dispute which fact is also mentioned in \"development permission\" which was submitted before the AO. (vii) The appellant had stated that notice u/s.153C of the Act was already issued before the search carried out at the premises of seller wherein first and second MoU was found. During the course of search as well as post search inquiry, the authorised officer has not doubted the veracity of such MoU or not asked any questions to sellers. Even during post search inquiry, no statement of partner of appellant LLP or Shri Suresh Thakkar was recorded which prove beyond doubt that both purchaser and seller has acted upon second MoU only and no on money payment was made. (vii) The appellant has claimed that it has executed purchase agreement at 16092/- per square meter whereas prevailing JANTRI was only 2075/-per square meter which also suggest that appellant has executed deed at prevailing market value. (viii) The appellant has also stated that though in first MoU, Shri Suresh Thakkar has signed as witness but in second MoU, Shri Suresh Thakkar has no where signed in MoU which clearly suggest that he was not party to final transaction. 5.4 In this background, appellant has contended that whole addition made by A.O. is based on 1st MoU and statement of Shri Suresh Thakkar. The appellant contended that the AO had not considered the fact that 1st MoU was not acted upon and cancelled due to inability of Shri Suresh Thakkar to resolved pending disputes. Further, Shri Suresh Thakkar in his statement has not spoken anything about the 2nd MoU which was executed on 18.01.2018, which proves that he was not having full and correct information as regards to appellant's land purchase transaction. Appellant emphasized that value of land decoded by the AO i.e. Rs.66.32 Crore (multiplying total plot area with rate per Sq. yard and not final plot are) is nowhere mentioned in 1st MoU. Further, such MoU was executed on 01.12.2017 and search in case of Suresh Thakkar had taken place on 15.10.2019 after almost two years from execution of first MoU, thus it is practically impossible for such prominent broker who is engaged in many deals to remember exact deal value of such land more particularly when it is nowhere mentioned in MoU. Further, Shri Suresh Thakkar has himself denied such transaction during the course of his assessment proceedings vide letter dated 23/07/2021, however the AO had neither considered the same nor provided cross-examination of Shri Suresh Thakkar. The appellant has also provided affidavit of Shri Mukesh Agarwal partner of appellant firm denying such on-money transaction, which was also not IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 Assessee : Safal Goyal Realty LLP Asst. Year : 2019-20 - 5– considered by A.O. Furthermore, appellant stated that search action was also carried out at seller's premise i.e. M/s. Shivalik Jhanvi Infraspace LLP. However, no evidence of such alleged on-money transaction has been found except 2nd MOU. Thus, appellant contended that appellant, seller party (M/s. Shivalik Jhanvi Infraspace LLP and Shri Suresh Thakkar (searched party) have categorically denied such alleged on-money transaction, thus addition made by A.O. disregarding all such statements is grossly incorrect. Appellant has placed reliance on certain judicial pronouncements which are mentioned at para 4.6 of its submission. 5.5 Further, appellant has contended that in assessment order, the AO had stated that there is no proper justification for reduction of sale consideration in 2nd MoU. In this regard, appellant submitted that land in question was subject to pooling and due to such pooling and as per communication received from Ahmedabad Urban Development Authority, for total land block of Land bearing Final Block no. 14, the F.P. area allotted was with Block no. 8, 8/1 and 8/2. In other words, for Land bearing survey no. 14 Shela, previously owned by M/s Shivalik Jhanvi Infraspace LLP, certain portion of F.P. area allotted by AUDA was on Blocks no. 8, 8/1, 8/2 and 13. Hence, the seller as per terms agreed upon vide MoU dated 01/12/2017 needed to obtain FP Possession of FP Block no. 14 i.e. from land owners of block no. 9, 8/1, 8/2 and 13 situated near to Block no. 14 to form a complete Final Plot no. 14 of T.P. Scheme 3 (Shela). However, the land in question was subject to various litigation as regards to possession, title clearance etc. The appellant has filed chart showing events relating to various disputes and litigation during the course of assessment proceedings as well as appellate proceedings. As per MoU dated 01.12.2017 it was obligation of seller i.e. Shivalik Jhanvi Infraspace LLP to gel the title of land block no. 14 clear and marketable, free from all encumbrances including all pending litigations however it could not obtain complete Final Plot's (F.P. 14 of T.P. Shela 3) possession which is made up of land bearing block no. 14 from land owners of block no. 8, 8/1, 8/2 and 13 as various litigation were going on block no. 8, 8/1 and 8/2, 13. As the seller failed to obtain the possession of the land and due to pending litigations and disputes, purchase price was reduced to Rs. 29.50 crores vide 2nd MoU dated 18.01.2018 as against Rs. 39 crores as decided by 1st MoU dated 01.12.2017. Appellant has emphasized that due to such pending litigation, appellant company could not begin development and construction of its Real Estate Project called \"Orchid valley\" built on Final block no. 14 Shela till 2 years from purchase of land resulting in huge financial loss. Even after execution of purchase deed, the appellant could not get possession of land forrning Block no. 14 Shela admeasuring about 4,527 Sq. yard out of 36,543 sq. yard. This fact proves that there were genuine circumstances for revising price as seller could not obtain IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 Assessee : Safal Goyal Realty LLP Asst. Year : 2019-20 - 6– complete possession of land, thus price was revised to 29,50,00,000/-, Hence, action of the A.O. disregarding the 2nd MoU is grossly incorrect and addition made by the AO is also incorrect. 5.6 On consideration of relevant facts on record, it is observed that the appellant had purchased land from M/s. Shivalik Jhanvi Infraspace LLP in year under consideration for Rs.29.50 crores. During the course of search at premises of Shri Suresh Thakkar, MoU dated 01.12.2017 was found and seized from his mobile which is reproduced at page No. 3 and 4 of assessment order. The English translation of such MoU was provided by appellant in assessment proceedings as well as in appellate proceedings. The relevant part of such MoU was also reproduced at page No. 21 of appellant's submission reproduced herein above. The first clause of such MoU contains area of land at Survey No. 14 which is mentioned as 30554 sq. mtr., which is equivalent to 36,543 sq. yds. Such MoU also contains selling rate of land for Rs.18,151/- per sq. yard and final plot area being 21925 Sq. yds. During the course of search at the premises of Mr. Suresh Thakkar, his statement was recorded which is reproduced at page No. 4 and 5 of assessment order wherein he has mentioned that total consideration of land is Rs.66,32,92,993/-. Based on such MoU and statement of Shri Suresh Thakkar, AO has arrived at value of land at Rs.66,32,92,993/- (36,543 Sq. yds. X Rs.18,151) and made addition of Rs. 36,82,91,993/- (66,32,92,993 29,50,00,000 being documental value of land) as on money in hands of appellant. 5.7 During the course of appellate proceeding, the appellant has stated that the AO has worked out agreed purchase consideration as per 1st MoU at Rs.66,32,92,993/- by multiplying total plot area i.e. 36,543 Sq. yds. with rate per sq. yard i.e. 18,151 per Sq. yard. However, such rate was agreed for final plot area which is actually allotted to appellant i.e. 21,925 Sq. yard. Thus, as per 1st MoU, agreed purchase consideration comes to Rs. Rs.39,79,60,675/- (final plot area 21,925 Sq. yds. x Rs.18,151) and not Rs.66,32,92,993/- (Total plot area 36,543 Sq. yds. x Rs. 18,151). Considering appellant's submission, it is found that value of purchase consideration arrived by A.O. is nowhere mentioned in MoU dated 01.12.2017. It is undisputed fact that purchase consideration arrived at by A.O. is solely arrived by relying on statement of Shri Suresh Thakkar. However, Shri Suresh Thakkar has himself denied such transaction during the course of his assessment proceedings, thus mere reliance on statement of Shri Suresh 3 Thakkar ignoring Clear terms mentioned in second MoU and explained by appellant is not correct. It is relevant to note that first MoU was executed on 01-12-2017 whereas search at the premises of Mr. Suresh Thakkar was carried out on 15-10-2019 when no evidences of exchange of on-money was found during the course of search. It is IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 Assessee : Safal Goyal Realty LLP Asst. Year : 2019-20 - 7– observed that though Mr Suresh Thakkar has signed first MoU as witness, he has not signed second MoU which also suggest that he was not party to final land deal. It is also observed that second MoU was executed between two parties only as Shri Suresh Thakkar was not able to get through the conditions mentioned in first MoU and it is undisputed fact that one of the major condition regarding possession of land without any encumbrance was not completed and the land deal fell into various litigation and cost of obtaining peaceful possession as per the first MoU was on the seller however due to various reasons as stated by appellant vide second MoU, the cost was to be incurred by the buyer ie appellant. It is also observed that in 1st MoU, terms of payment have been mentioned wherein one of the clauses was regarding token amount of Rs. 5 crores. However, it has never mentioned that such token amount was paid in cash. On the contrary, appellant has stated that there was payment of Rs.4.5 crores within the month of execution of 1st MoU and such payment is also mentioned in 2nd MoU discussed in subsequent para. 5.8 In the present case, the appellant has claimed that 1 MoU dated 01.12.2017 was not acted upon and cancelled due to dispute in possession and parties entered into 2nd MOU dated 18.01.2018, wherein they reduced consideration to Rs. 29,50,00,000/-. It is pertinent to note that 2nd MOU and tally data was found from search conducted at seller's premise i.e. M/s. Shivalik Jhanvi Infraspace LLP. It is pertinent to note that veracity of such second MoU is not doubted by A.O. nor there is any allegation that such MoU was not found during the course of search at the premises of seller of the property. However, A.O. not considered such 2nd MOU and rejected it on ground that there are no specific reasons for reduction of sales consideration has been mentioned in 2nd MOU and token money mentioned in 1ª MOU has been paid by appellant which is recorded in tally data of M/s Shivalik Jhanvi Infraspace LLP. During the course of appellate proceedings, appellant has contended that that land in question was subject to pooling and as per MoU dated 01.12.2017 the seller as per terms agreed upon vide MoU dated 01/12/2017 needed to obtain, F. P Possession of FP Block no. 14 i.e. from land owners of block no 9 8/1, 82 and 13 situated near to Block no. 14 to form a complete Final Plot no, 14 of T.P. Scheme 3 (Shela). It was obligation of seller i.e. Shivalik Jhanvi Infraspace LLP to get the title of land block no. 14 clear and marketable, free from all encumbrances including all pending litigations however it could not obtain complete Final Plot's (F.P. 14 of T.P. Shela 3) possession due to various litigation. As the seller failed to obtain the possession of the land and due to pending litigations and disputes, purchase price was reduced to Rs. 29.50 crores vide 2nd MoU dated 18.01.2018 as against Rs. 39 crores as decided by 1st MoU dated 01.12.2017. Appellant has also submitted chart showing events relating to various disputes and litigation IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 Assessee : Safal Goyal Realty LLP Asst. Year : 2019-20 - 8– and the fact relating to such disputes has never been disputed by A.O. in assessment order. Considering all these facts and written submission of appellant, it is observed that 2nd MoU cannot be rejected due to following reasons: (1) It is pertinent to note that 2nd MoU was found in search at seller's premise and in this MoU dated 18.01.2018, it is factually clarified that 1st MoU dated 01.12.2017 is not executed due to pending litigations. At para 2 of 2nd MoU, it is clearly mentioned that as per 1st MoU dated 01.12.2017 \"As per the Memorandum of Understanding, the possession of the Final Plot on its actual spot was to be obtained by Seller and then was to be handed over to the Purchaser. Similarly, it was the responsibility of the Seller to obtain the Possession Agreement from the third-party land owners and thereafter fumish the same to the Purchaser. A huge expenditure is needed to be incurred for obtaining the possession of that Final Plot as well as the Possession Agreement and it might even consume more time. Hence, the Seller has requested the Purchaser that the Purchaser, at its own costs, consequences and risks, can obtain the possession of the land of that Final Plot as well as get executed the Possession Agreement from the third-party land owners. The Seller is in urgent need of funds and hence, the Seller has become ready to lessen the total sales price of the said land.\" On reading of above MoU, it is clear that seller has agreed to reduce the consideration as it is in urgent need of money and there is huge cost involved for getting possession of final plot. (ii) In 1st MoU, responsibility of clearing title, possession of land was entrusted to seller, however by entering into 2nd MoU, appellant has taken over responsibility of clearing possession in its hand which is clearly mentioned in para 5 of 2nd MoU. (iii) On perusal of copy of the complaints filed by appellant, it is clear that there is genuine dispute in possession of land. Further, on perusal of purchase deed it is clear that appellant has acquired 30,554 sq. mtr land, final plot from the same is 18,332 sq. mtr land. (30,554*60%). However, due to litigation, appellant could not get complete possession of land and not utilized it for its project. This fact is also proved by development permission from AUDA submitted by appellant wherein area approved for IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 Assessee : Safal Goyal Realty LLP Asst. Year : 2019-20 - 9– project is 16,181 Sq. mtr out of 18,332 sq. mtr which means that it is undisputed fact that appellant has not got possession of 2151 Sq. mtr land. (iv) The AO observed that normally as per norms of MoU prevalent, token amount is paid at the time of signing of MoU and assessee has also paid token amount of Rs. 5,00,00,000/- on date of 1st MoU on 01.12.2017. With this regard, it is submitted that such payment was made as per 1st MoU and it is also made through cheque. Further, in 2 ^ (nd) MoU, there is clarification regarding such token amount wherein at para 3, it is clarified that purchaser i.e. appellant is required to pay Rs.5,00,00,000/- and till date of 2nd MoU, it has paid Rs.4,50,00,000/-. This transaction is duly recorded in tally data found from premises of seller. It is not any unexplained transaction but part of purchase consideration i.e. Rs.29,50,00,000/-. Thus, no adverse inference can be drawn from such tally data in appellant's case more particularly when transaction recorded in such tally data is part of purchase consideration and there is no entry of cash transaction In such tally data. The AO at page NO. 26 has referred to tally data seized from the seller of the land wherein also cheques given by appellant are mentioned and no seized data was referred in assessment order which can suggest that Assessee has made any on-money payment in such transaction. (v) The AO has not brought any material on record which prove contrary to what has been mentioned in 2 ^ (nd) MoU. 5.9 In view of above discussion, it is clear that 2 ^ (nd) MoU dated 18.01.2018 cannot be ignored as there existed genuine circumstantial situation which lead to cancellation of 1 ^ (st) MoU and execution of 2 ^ (sd) MoU. Further, A.O. has not brought on record anything contrary to 2 ^ (ra) MoU which was found during the course of search at the premises of seller of the land. Even in search action carried out at premises of Shri Suresh Thakkar and Seller i.e. M/s Shivalik Jhanvi Infraspace LLP, neither any cash trail nor any evidence of on-money payment in form of loose paper, digital data was found regarding the said land deal. During the course of search at the premises of seller also, there was no trail of on money receipt from appellant LLP or some evidence in form of loose paper, cash trail, digital data was found which prove that appellant had made on money payment to them. Further, tally data found in search of seller is also not represents any cash transaction and amount of Rs. 4,50,00,000/- recorded in such tally data is also duly explained by appellant and also it is clearly mentioned in 2nd MoU. Thus, no single clinching/concrete/corroborative evidence found in both searches which can prove on-money transaction. The only basis of making present addition is statement of Suresh Thakkar. Regarding such statement of Shri IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 Assessee : Safal Goyal Realty LLP Asst. Year : 2019-20 - 10– Suresh Thakkar, it is observed that Suresh Thakkar is not party to 2nd MoU, which was agreed by parties afterwards on cancellation of 1st MoU. Further, Shri Suresh Thakkar in his statement stated about 1st MoU only which prove that he was not having full knowledge of deal. It is pertinent to note that he has also retracted his statement vide affidavit dated 11.09.2019 and 05.05.2021, which was submitted by appellant during the assessment proceedings. Thus, mere reliance on statement of Shri Suresh Thakkar given during post search inquiry in his case and ignoring all other vital facts and evidence on record found & seized during the course of second search on seller itself is incorrect. It is observed that addition cannot be made based only upon statement of third party without bringing any clinching evidences on record that on-money has been exchanged between buyers and sellers wherein both the parties have denied such payment and no evidences suggesting on money payment was found either in the case of Shri Suresh Thakkar or even during the course of search at the premise of sellers of the property as elaborately discussed herein above. ………………………………. 5.11 It is observed that while making addition of on money payment, no other cogent/clinching/corroborative evidence found in both searches i.e. search at place of Suresh Thakkar and seller's premise, thus addition merely on the basis of statement of Mr Suresh Thakkar is unjustified. In addition to this, purchase consideration paid by appellant in the present case is higher than stamp duty value by almost 8 times (2075 per Sq. meter being JANTRI rate and purchase rate is Rs 16092/- per Sq. meter), hence no addition is justified in absence of any clinching evidence which is absent in the present case. Further, affidavit filed by partner of appellant firm, i.e. Mukesh Agarwal cannot be ignored more particularly when seller and broker i.e. Suresh Thakkar both have categorically denied existence of on- money payment and A.O. has not brought on record any evidence to prove actual on-money payment by appellant. 5.12 Considering the facts of the case, as observed herein above, and relying upon decision referred supra, entire addition made by the AO under section 69B of the Act for Rs.36,82,91,993/- is deleted. Further, while passing the assessment order, AO has observed that appellant had paid brokerage @ 0.5% of transaction value to Mr Suresh Thakkar but same is not supported by any independent evidence that such payment has actually been made by appellant. Even Shri Suresh Thakkar in his statement recorded during post search inquiry has not stated anything about quantum of such brokerage. It is observed that Shri Suresh Thakkar in his assessment proceedings has also stated that he was not party to final IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 Assessee : Safal Goyal Realty LLP Asst. Year : 2019-20 - 11– transaction which is corroborated form the fact that he was not witness in second MoU hence addition made by the AO for unexplained expenditure u/s.69C for Rs.33,16,460/- relying on 1st MoU which was not acted upon and statement which is retracted subsequently and not corroborated by any supporting evidence, is deleted. Thus, entire addition made by the AO for Rs.36,82,91,993/- and Rs.33,16,460/- is deleted. Thus, the grounds of appeal no. 4 & 5 are allowed.” 5. Aggrieved by the aforesaid deletion by the Ld. CIT(A), the Revenue is in appeal before the Tribunal. 6. Before us, Ld. DR submitted that since the sale deed reflects a lower documented price, it is inferred that an 'on-money' payment of Rs. 36,82,91,993/- was made by the assessee; therefore, the Assessing Officer has rightly invoked the provisions of Section 69B of the Act. 7. The Ld. AR on the other hand relied upon the order of the Ld. CIT(A) and submitted that the Ld. CIT(A) has rightly deleted the addition made by the Assessing Officer on this issue in view of the lack of substantive evidence and relying on established legal precedents as referred by the Ld. CIT(A) in the impugned order. 8. We have heard the rival contentions and perused the material available on record. We find that the Ld. CIT(A) held that the addition made by the Assessing Officer on account of alleged on-money payment was solely based on the statement of Mr. Suresh Thakkar a real estate broker, without any corroborative evidence found during searches conducted at the premises of Mr. Thakkar and the seller. The Ld. CIT(A) also found that the purchase consideration paid by the assessee was significantly higher—almost eight times—than the Jantri value, indicating no suppression of value. The Ld. CIT(A) also held that both the seller and broker have categorically denied any on-money transaction, and the affidavit submitted by the assessee's partner, Mr. Mukesh Agarwal, further supports this. IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 Assessee : Safal Goyal Realty LLP Asst. Year : 2019-20 - 12– The Ld. A.O. considered the land value at Rs.66.33 crores based on the MoU-1 dated 01-12-2017 wherein Mr. Suresh Thakkar was one of the witness. However the above MoU-1 was not acted upon as the seller was not able to obtain clear possession of land and clear title. Therefore a fresh MoU-2 was entered on 18-01- 2018 wherein Mr. Suresh Thakkar was not a party/witness, wherein the sale consideration is for Rs. 29.5 crores . In fact this MoU-2 and tally data were found during the search operation conducted at the premises of the seller namely M/s Shivalik Jhanvi Infraspace LLP. Further during the course of search, no on-money trial or cash trial found during the search operation at the premises of the seller. Further affidavit filed by the Partner of the assessee firm cannot be ignored when the seller as well as the broker have denied the existence of on-money transaction. The Assessing Officer could not disprove the MoU-2 entered on 18-01-2018. Moreover, the Assessing Officer failed to bring any substantive evidence on record to establish the actual on-money payment by the assessee. In view of the above, we are of the considered opinion that the order of the learned CIT(A) on this issue requires no interference. Accordingly, the appeal of the Revenue on this ground is dismissed. 9. The second issue raised by the Revenue relates to the deletion of addition of Rs.33,16,460/- on account of unexplained investment u/s 69C of the Act. The Assessing Officer made the impugned addition by observing as under:- “From the aforesaid sworn statement of Shri Suresh R Thakkar as well as seized images, it is abundantly clear that Shri Suresh R Thakkar has facilitated the underlying land deal between the purchaser and sellers of the land and in turn has earned brokerage income. Though the quantum of brokerage income has not been specified by Shri Suresh R Thakkar but it is pertinent to mention that during post search inquiry, Shri Suresh R Thakkar himself has stated that as per prevalent market practice in real estate, brokerage @ 0.5% is charged when the aggregate deal value exceeds Rs.10 crores. Since, the underlying deal value stands at Rs.66,32,91,9931- which exceeds Rs.10 crores, hence, the rate of 0.5% is applied and accordingly IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 Assessee : Safal Goyal Realty LLP Asst. Year : 2019-20 - 13– brokerage expenditure is worked out at Rs.33,16,460/-. Since, the assessee had not given the source of such payment of brokerage and had not accounted the same in its books of accounts; it is treated as unexplained expenditure in the hands of the assessee u/s.69C r.w.s. 115BBE of the Act and is added to the total income of the assessee.” 10. Aggrieved by the order of the Assessing Officer, the assessee has preferred an appeal before the Ld. CIT(A) who deleted the impugned addition by observing as under:- “… Further, while passing the assessment order, AO has observed that appellant had paid brokerage @ 0.5% of transaction value to Mr Suresh Thakkar but same is not supported by any independent evidence that such payment has actually been made by appellant. Even Shri Suresh Thakkar in his statement recorded during post search inquiry has not stated anything about quantum of such brokerage. It is observed that Shri Suresh Thakkar in his assessment proceedings has also stated that he was not party to final transaction which is corroborated form the fact that he was not witness in second MoU hence addition made by the AO for unexplained expenditure u/s.69C for Rs.33,16,460/- relying on 1st MoU which was not acted upon and statement which is retracted subsequently and not corroborated by any supporting evidence, is deleted.” 11. Aggrieved by the order of the Ld. CIT(A), the Revenue is now in appeal before us by way of Ground No.2. 12. We have heard the rival contentions, findings of the Ld. CIT(A) and the material available on record. The Ld. CIT(A) has rightly observed that the addition of Rs. 33,16,460/- under Section 69C, made on account of alleged brokerage payment to Shri Suresh Thakkar, is not supported by any independent or corroborative evidence. The Assessing Officer relied solely on the assumption of brokerage @ 0.5% without any proof of actual payment by the assessee. Further, Shri Suresh Thakkar, in his post-search statement, did not quantify any brokerage, and during his own assessment proceedings, clarified that he was not a party to the final transaction. In the absence of any substantive material on record to IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 Assessee : Safal Goyal Realty LLP Asst. Year : 2019-20 - 14– establish that the assessee incurred such expenditure, we find no infirmity in the order of the Ld. CIT(A) in deleting the said addition. Accordingly, the Revenue’s ground on this issue is dismissed. 13. In the result, the appeal filed by the Revenue in IT(SS)A No. 37/Ahd/2024 is hereby dismissed. 14. The Grounds of Appeal raised by the assessee in its Cross Objection are as follows:- 1. In law and in the facts of the appellant's case, Ld. CIT(A) has erred in dismissing ground that the order passed u/s 153C of the Act is Bad in law and deserves to be quashed. 2. In law and in the facts of the appellant's case, Ld. CIT(A) has erred in dismissing ground that notice issued under section 153C of the Act dated 20/04/2021 is invalid and bad in law. Hence consequential assessment proceedings and order dated 30/03/2023 is void ab initio and bad in law. The order dated 30/03/2023 deserves to be quashed. 3. In law and in the facts of the appellant's case, Ld. CIT(A) has erred in dismissing ground that notice issued under section 153C of the Act on 30/03/2023 is barred by limitation of time prescribed under section 153 of the Act and is invalid and deserves to be quashed. 15. Ld. Counsel appearing for the assessee submitted that if the issue on merits is to be decided in favour of the assessee upholding the order passed by the Ld. CIT(A), the assessee is not pressing the Cross Objection. 15.1. Recording the same, since the Revenue appeal is already dismissed, the Cross Objection filed by the Assessee are hereby dismissed IT(SS)A No. 37/Ahd/2024 & CO No. 23/Ahd/2024 Assessee : Safal Goyal Realty LLP Asst. Year : 2019-20 - 15– 16. In the result, the C.O. No. 23/Ahd/2024 filed by the Assessee is also dismissed. The order is pronounced in the open Court on 26.06.2025 Sd/- Sd/- Sd/- Sd/- (T.R. SENTHIL KUMAR) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 26/06/2025 आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad "