PRADYUMNA AGROS PRIVATE LIMITED,HYDERABAD V. ACIT., CENTRAL CIRCLE-2(4), HYDERABAD

ITA 1033/HYD/2024

AI Insights

The case involves Pradyumna Agro Private Limited, which appealed against the order of the Commissioner of Income Tax (Appeals) -12, Hyderabad, concerning the assessment year 2020-21. The primary contention was regarding the validity of the jurisdiction assumed under section 153C of the Income Tax Act, 1961, and the subsequent addition of Rs.4,65,40,000 as unexplained investment towards on-money payments for property purchases. The Tribunal examined the satisfaction note recorded by the Assessing Officer and the incriminating materials seized during the search operations, which included documents and statements from key individuals like Shri D.Venugopal Reddy and Shri MSN Reddy. The Tribunal concluded that the additions made by the Assessing Officer were not substantiated for A.Y.2020-21, as the relevant transactions pertained to A.Y.2019-20.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29008 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2020-2021
• Other Referred Cases: CIT Vs. Sinhgad Technical Education Society, Banganga Cooperative Housing Society Ltd. Vs. Mrs. Vasanti Gajanan Nerurkar
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M.V. PRASAD; K.S. RAJENDRA KUMAR
• Keywords: Unexplained investment; Document seized; Documents seized; Search and seizure; Loose papers
• Section: 132; 69; 13; 153C; 10; 20

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad Before Shri Manjunatha G., Accountant Member and Shri K. Narasimha Chary, Judicial Member आ.अपी.सं /ITA No.1033/Hyd/2024 (निर्धारण वर्ा/Assessment Year: 2020-21) Pradyumna Agro Private Limited Hyderabad [PAN : AAJCP4282H] Vs. ACIT Central Circle-2(4) Hyderabad (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri M.V.Prasad & Shri K.S.Rajendra Kumar, AR Shri Srinath Sadanala, DR सुिवधई की तधरीख/Date of Hearing: 09/12/2024 घोर्णध की तधरीख/Date of Pronouncement: 10/01/2025 आदेश / ORDER PER. MANJUNATHA G., A.M: This appeal filed by the assessee is directed against the order dated 17.09.2024 of the learned Commissioner of Income Tax (Appeals) [Ld.CIT(A)]-12, Hyderabad, pertaining to A.Y.2020-21 on the following grounds : 1. The order of the Learned Commissioner of Income Tax (Appeals)-12, Hyderabad is erroneous and opposed to the facts of the case and law. 2 2. On the facts and circumstances of the case and in law, the Ld.CIT(A), erred in failing to consider that the assumption of jurisdiction and issue of notice u/s 153C by the Assessing Officer for the instant assessment year is bad in law in the absence of fulfillment of the jurisdictional conditions in terms of the provisions of section 153C(1) of the Act for the said assessment year. 3. The Ld.CIT(A) ought to have considered that the satisfaction note recorded by the Assessing Officer to enable him to assume jurisdiction u/s 153C is invalid in law as it is completely silent regarding the reasons to co- relate the contents of the seized material with instant assessment year so as to arrive at the satisfaction that the said seized material has a bearing on the determination of total income of the said assessment year. 4. The Ld.CIT(A) erred in law in holding that the Assessing Officer is bound to issue notice u/s 153C for each of the six assessment years immediately preceding the assessment year relevant to the previous year in which search was conducted after recording satisfaction after the amendment made to section 153C by the Finance Act, 2017 disregarding the law laid down by the Hon'ble Supreme Court. 5. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in upholding the addition of Rs.4,65,40,000/- made u/s 69 of the Act towards alleged on-money payments in cash for purchase of land and buildings of MNR Dairy Farms' 6. The Ld.CIT(A) erred on facts in holding that the on- money payments in cash have been made during the F.Y 2019-20 relevant to A.Y.2020-21 contrary to his own observation regarding absence of any mention of the exact dates of the said cash payments in the seized material and despite the contradiction regarding the relevant assessment year between the sworn statement dated 27.04.2021 and the subsequent affidavit of Sri M.S.N.Reddy. 7. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in failing to consider that the 3 finding of the Assessing officer that it is evident from the seized material that the on-money payments were made during the previous year relevant to A.Y 2020-21 is factually incorrect and that the said finding is based on a mere surmise and conjecture which is legally not permissible as per settled law. 8. On the facts and circumstances of the case and in law, the Ld.CIT(A) failed to appreciate that addition u/s 69 of the Act for the A'Y 2020-21 is not legally sustainable when the seized material contains no evidence of making on-money payments during the relevant previous year, which is a sine qua non for making such addition for the year. 9. On the facts and circumstances of the case, the Ld.CIT(A) failed to appreciate that the seized material has no tangible evidence of actual passing of on-money of Rs,4,65,40,000/-between the parties per se and the noting in respect of the said amount found therein merely appeared as \"balance to be paid\" . 10. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in placing reliance on a dumb document seized from the premises of a third party showing a mere scribbling of partial payment of on-money of Rs.1.85 crores, which neither contains required particulars of the payment such as date, name of the payer, name of recipient nor is corroborated by any independent evidence. 11. The Ld.CIT(A) erred in law in applying the presumption regarding the truthfulness of the contents of the seized documents as per the provisions of section 132(4A) and 292C to the case of the appellant though the relevant material was not found and seized during the course of search in the case of the appellant but was seized during the search in the case of an employee of a group company. 12. On the facts and circumstances of the case, the Ld.CIT(A) erred in failing to consider that the registration of one of the listed properties in the seized document has not taken place till the end of the relevant previous year and 4 the on-money payment could not have been made in full without such registration. 13. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in relying on the sworn statement of Sri.M.S.N Reddy dated 27.04.2021 and his affidavit dated 05.07.2021 to infer the payment of on-money by the appellant without appreciating that there is no unequivocal admission of such payment by him and he had merely admitted additional income in order to avoid litigation. 14. The Ld.CIT(A) erred in relying on the statement of Sri.D.Venugopal Reddy, a third party, though his averment regarding the payment of on-money is not supported by any corroborative evidence. 15. Any other legal and factual ground that may be urged at the time of hearing of the appeal. 2. The brief facts of the case are that the appellant company, involved in the business of Agriculture, hunting and related service activities, filed its return of income for the A.Y.2020-21 on 11.02.2021, declaring loss of Rs.14,020/-. A search and seizure operation u/s 132 of the Income Tax Act, 1961 (“the Act”) was conducted in the case of M/s MSN Laboratories Pvt. Ltd. and its associated entities on 06.02.2020. The assessee was also covered in the search and seizure operation. During the course of search and seizure operation in the case of Shri D.Venugopal Reddy, General Manager (Corporate Affairs), M/s MSN Laboratories Pvt. Ltd. on 24.02.2021, incriminating material was found and seized, vide Annexure A/DVR/Res/01, page 23 to 36 and found that the said documents relate to purchase of MNR Dairy Farm, Rajapur and Rayapally Village for a total consideration of Rs.14 crores and out of which, an amount of Rs.9,34,60,000/- was paid through RTGS/Cheque 5 and the balance amount of Rs.4,65,40,000/- was alleged to be paid in cash. A statement on oath u/s 132 of the Act was recorded from Shri D.Venugopal Reddy and in response to question No.10 of his sworn statement on 24.02.2021, he admitted that the appellant company is part of MSN group of companies and further, Shri MSN Reddy and family members purchased land and building from MNR Dairy Farm for a consideration of 14 crores, out of which Rs.9,34,60,000/- was paid through RTGS/Cheque and the balance amount of Rs.4,65,40,000/- was paid by cash. The statement recorded from Shri D.Venugopal Reddy was confronted to Shri MSN Reddy and a statement on oath was recorded 27.02.2021, where he has admitted the purchase of property from MNR Dairy Farm and also payment of on-money in cash for the A.Y.2020-21 in the name of appellant for an amount of Rs.4,65,40,000/- towards purchase of properties and also filed an affidavit, admitting additional income for the A.Y.2020-21. 3. Consequent to search, notice u/s 153C of the Act dated 09.12.2022 was issued. In response, the assessee has filed its return of income on 05.01.2023 and declared total loss of Rs.14,020/-. The case was selected for scrutiny and during the course of assessment proceedings, the Assessing Officer called upon the assessee to explain as to why the on-money payment for purchase of property from MNR Dairy Farm to the extent of Rs.4,65,40,000/- shall not be treated as unexplained investment. In response, the appellant submitted that the material found during the course of search in the residential premises of Shri D.Venugopal Reddy does not prove cash 6 payment for purchase of property over and above the sale consideration in the sale deed and therefore, the question of making additions towards on-money as unexplained investment on the basis of statement recorded from Shri D.Venugopal Reddy and Shri MSN Reddy does not arise. The appellant had also submitted that in the alleged loose sheets found during the course of search, there is no reference to any date of payment and also to whom the money has been paid, and therefore, the allegation that the appellant has paid on-money of Rs.4,65,40,000/- for the A.Y.2020-21 is not correct. The appellant further submitted that Shri MSN Reddy has filed further affidavit dated 05.07.2021 and admitted additional income of Rs.4,65,50,000/- towards purchase of property from MNR Dairy Farm in the name of appellant company for the A.Y.2019-20 on the basis of seized material, which is further proved with registration of the property in the financial year 2019-20. 4. The Assessing Officer, after considering the submissions of the appellant and also taking note of relevant seized material found during the course of search in the premises of Shri D.Venugopal Reddy, more particularly page No.23 to 36, coupled with statements recorded from Shri D.Venugopal Reddy and the affirmation by Shri MNS Reddy, observed that although the appellant company has admitted additional income of Rs.4,65,40,000/- towards purchase of property and payment of on-money in cash, but has filed the return of income, without declaring any income. Further, the seized material found during the course of search clearly shows the purchase of property by 7 the appellant company from MNR Dairy Farm for a consideration of Rs.14 crores, out of which Rs.9,34,60,000/- has been paid through RTGS / Cheque and the balance amount of Rs.4,65,40,000/- was paid in cash. This fact has been confirmed by Shri D.Venugopal Reddy in the statement recorded u/s 132(4) of the Act and further affirmed by Shri MSN Reddy in his statement recorded u/s132(4) and also by the affidavit filed during the course of search, admitting additional income. Therefore, the arguments of the appellant that the appellant company has not paid any on-money in cash and the properties have been purchased by payment of consideration through RTGS / Cheque is incorrect. Therefore, rejected the arguments of the appellant and by taking into account the total amount of investment shown in the books of accounts of the appellant towards purchase of property from MNR Dairy Farm amounting to Rs.7.57 crores, the balance amount of Rs.6.43 crores has been treated as unexplained investment and added back to the total income of the assessee. 5. Being aggrieved by the assessment order, the appellant preferred an appeal before the CIT(A). Before the Ld.CIT(A), the appellant challenged the jurisdiction of the Assessing Officer in assuming jurisdiction for assessment of income for the A.Y.2020-21, in light of satisfaction note recorded by the Assessing Officer for initiation of proceedings u/s 153C of the Act. The appellant had also challenged the additions made by the Assessing Officer towards on-money payment towards purchase of property as unexplained investment, in light of incriminating materials coupled with statements of the parties 8 and argued that nowhere in the incriminating material, it was stated that the cash payment was made for purchase of property, but what was stated in the said document is, balance to be paid. The Assessing Officer without appreciating the relevant facts simply presumed that the appellant has paid cash towards purchase of property and made additions towards the difference as unexplained investment. 6. The Ld.CIT(A), after considering the submissions of the appellant and also taking note of the remand report of the Assessing Officer on this issue, rejected the legal ground taken by the appellant, challenging the jurisdiction of the Assessing Officer for initiation of proceedings u/s 153C of the Act and held that the material found during the course of search, coupled with statement recorded from Shri D.Venugopal Reddy and Shri MSN Reddy, clearly suggest that the documents belong to the appellant company and have a bearing on the total income of the appellant for the A.Y.2020-21. Therefore, the arguments of the appellant that the Assessing Officer has not recorded satisfaction as required under law and further, the seized material does not indicate undisclosed income of the appellant for the A.Y.2020-21, is devoid of merit and therefore, rejected the arguments of the appellant on the legal issue. The relevant findings of the Ld.CIT(A) are as under : “6.2.4. 1n the remand report, the Ao has stated that the decision of Hon'ble supreme court in case of CIT Vs. Sinhgad Technical Education Society (2017) 397 ITR 344(SC) deals with the legal position of section 153C of the Act prior to the amendment made by the Finance Act, 2017 w.e.f' 01.04.2017 and the Finance Act, 2017 has amended the section 153C to include the following words \"for six assessment Years immediately preceding the 9 assessment year relevant to the previous year in which search is concluded or requisition is made.” This means with effect from 01.04.2017, the AO shall have to proceed against each such other person and issue notice for each of the six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. Also, the AO of the searched person as well as the AO of the appellant have recorded the satisfaction notes after duly complying with the provisions of the Act. Accordingly, the A0 stated that the mandatory jurisdictional requirements prescribed for the purpose of assuming jurisdiction u/s 153C of the Act have been duly complied with. The AO also stated that the amount of Rs.4,65,40,000/- was admitted as additional income for the AY 2020-21 in the affidavit dated O5.07.2O21 filed by Sri M. Satyanarayana Reddy, Director of appellant company and an affidavit is admissible evidence, the contents of the affidavit are deemed to be true unless proved otherwise. The AO also relied on the decision of Hon'ble Bombay High court in the case of \"Banganga Cooperative Housing Society Ltd. Vs. Mrs. Vasanti Gajanan Nerurkar in Chamber Summons (L) No.1678 of 20I4\". With regard to the reliance placed by AO in the remand report on the decision of Hon'ble Bombay High Court in the case of “Banganga Cooperative Housing Society Ltd. Vs. Mrs. Vasanti Gajanan Nerurkar in Chamber Summons (L) No.1678 of 2014\", it is pertinent to observe that the judgment of the Hon'ble Bombay High Court cited by the AO in his report is not applicable to the case on hand. The said judgment was rendered with reference to the provisions of Code of Civil Procedure, 1908 and it dealt with the issue of whether an Evidence Affidavit, which is filed before the court by the plaintiff in lieu of the examination-in-chief, could be withdrawn by the deponent without tendering himself to cross- examination. The Hon'ble Court held that such affidavit bears the character of examination-in-chief as soon as it is affirmed and filed and it is not thereafter possible to \"withdraw\" an Evidence Affidavit. The Hon'ble High Court held that the examination-in- chief of the deponent has, to all intents and purposes, begun once an Evidence Affidavit is filed and it is not permissible to withdraw such Evidence Affidavit on the ground that the deponent is unable to present himself for cross-examination. Thus, it is noticed that the said judgment is not relevant to the case of the appellant and the Assessing Officer has cited the same without appreciating the context in which it was rendered. However, I agree with the observations made by the Assessing Officer in the remand report that after amendment of 10 section 153C by Finance Act, 2017, i.e. after 01.04.2017, the AO is bound to issue notice for each of the six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made after recording the proper satisfaction. The AO after duly complying the provisions of section 153C only, issued notices u/s 153C of the Act for the AYs 2015-16 to 2021-22 (AY.2021-22 being the search year). It is also seen that the satisfaction for the AYs 2015-16 to 2021-22 in case of the appellant was recorded by the Assessing Officer based on the incriminating material seized vide Page No.23 to 36 of Annexure-1/DVR/RES/01. On perusal of the incriminating material, the Assessing Officer observed that the appellant has paid the sale consideration in cash amounting to Rs.4,65,40,000/-. Also, Sri M.Satyanarayana Reddy, CMD of the appellant company has admitted the additional income of Rs.4,65,40,000/- in the hands of the appellant on account of on- money paid towards purchase of lands from M/s MNR Dairy Farms. Therefore, relying on the incriminating material only, the Assessing Officer has reopened the proceedings u/s 153C of the Act in the case of the appellant after recording his satisfaction. Accordingly, the proceeding reopened by the Assessing Officer u/s 153C of the Act of the current AY 2020-21 is hereby held valid. The grounds no.3, 9 & 10 of the appeal are dismissed.” 7. In so far as the additions made towards on-money for purchase of property amounting to Rs.4,65,40,000/-, the Ld.CIT(A), by taking note of documents found during the course of search, coupled with statements recorded from Shri D.Venugopal Reddy and Shri MSN Reddy, held that the documents found during the course of search in the form of loose sheets clearly indicate purchase of land from MNR Dairy Farm by the appellant company and Directors for a consideration of Rs.14 crores. Further, the document clearly shows payment of Rs.9,34,60,000/-, through RTGS/Cheque. The document also specifies the balance amount of Rs.4,65,40,000/- is to be paid. Further, Sheet A2 shows that a sum of Rs.1,85,00,000/- has been paid and a balance of Rs.2,80,40,000/- is shown as balance to be paid. When these 11 documents were confronted to Shri D.Venugopal Reddy, he has admitted payment of on-money for purchase of property and this fact has been confirmed from Shri MSN Reddy in his statement recorded during the course of search and also filed affidavit, admitting additional income of Rs.4,65,40,000/- for the A.Y.2020-21. Although he has filed subsequent affidavit and admitted income for the A.Y.2019-20, but going by the incriminating material and statement recorded from the parties, it is very clear that the person, who dealt with the transaction is aware of the date of payment and therefore, the Assessing Officer has rightly assessed on-money payment for purchase of property as unexplained investment for the A.Y.2020-21. However, the Ld.CIT(A), by taking note of relevant evidences filed by the appellant, including the financial statement of the appellant for the A.Y.2020-21, observed that although the Assessing Officer has made additions of Rs.6,42,60,3000/- by considering the amount shown in the balance sheet at Rs.7,57,39,700/-, but the fact remains that the remaining amount of Rs.1,77,20,300/- has been directly paid by Shri MSN Reddy for purchase of the property, on behalf of the appellant company and this fact has not been considered by the Assessing Officer, while making additions towards on-money. Further, the appellant has filed complete details of the payment made by the appellant company and the payments directly made by Shri MSN Reddy on behalf of the appellant company and if we consider the total payments made through RTGS/Cheques, the appellant company could able to explain the source to the extent of Rs.9,34,60,000/- and thus taking into account, relevant evidences, accepted argument of the appellant towards 12 source for investment in purchase of property from MNR Dairy Farm to the extent of Rs.9,34,60,000/- and thus directed the Assessing Officer to delete the addition of Rs.1,77,20,300/- out of total additions made for Rs.6,42,60,300/-. In so far as the balance amount of Rs,4,65,40,000/-, the Ld.CIT(A) sustained the additions made by the Assessing Officer on the ground that the documents found during the course of search and the statement recorded from Shri D.Venugopal Reddy and Shri MSN Reddy clearly proves the payment of on-money for purchase of property and the same was not recorded in the books of accounts and also the source has not been explained. Therefore, sustained the additions made by the Assessing Officer for Rs.4,65,40,000/- as unexplained investment for purchase of property. 8. Aggrieved by the Ld.CIT(A) order, the appellant is now in appeal before the Tribunal. 9. The learned Counsel for the appellant, referring to Ground No. 2 to 4 of appellant’s appeal, submitted that the Ld.CIT(A) erred in failing to consider that the assumption of jurisdiction and issue of notices u/s 153C by the Assessing Officer for the instant assessment year is bad in law, in the absence of incriminating materials, in terms of provisions of section 153C(1) of the Act. The learned Counsel for the appellant, referring to satisfaction note, recorded by the Assessing Officer dated 07.12.2022 and incriminating material found during the course of search in the form of loose sheets that nowhere in the satisfaction note, the Assessing Officer indicated the 13 undisclosed income pertains to the appellant for the A.Y.2020- 21. Even in the seized material, there is no specific date of payment of cash to link the undisclosed income for the A.Y.2020-21. In the absence of any evidence to suggest payment of on-money for purchase of property in cash, which pertains to A.Y.2020-21, the satisfaction note recorded by the Assessing Officer, on the basis of statement recorded from certain individuals, cannot be treated as valid satisfaction for assumption of jurisdiction u/s 153C of the Act. In this regard, he relied upon the decision of Hon'ble Supreme Court in the case of CIT Vs.Sinhgad Technical Education Society [2017] 397 ITR 344 (SC). 10. The learned Counsel for the appellant, referring to Ground No.5 to 13 of the Grounds of Appeal filed by the appellant, submitted that the Ld.CIT(A) erred in sustaining the additions made by the Assessing Officer towards on money paid for purchase of property for Rs.4,65,40,000/-, without appreciating the fact that the alleged seized material is a dumb documents, which does not suggest undisclosed income pertains to or belongs to the appellant for the A.Y.2020-21. The learned Counsel for the appellant, further referring to statement recorded from Shri MSN Reddy and affidavit filed during the course of search and post investigation, submitted that although Shri MSN Reddy admitted Rs.4,65,40,000/- in the name of appellant company towards cash payment for purchase of property for the A.Y.2020-21 in the statement recorded u/s 132(4) and affidavit filed during the course of search, but subsequently, he has filed one more affidavit on 05.07.2021 and 14 admitted additional income for the A.Y.2019-20, after analyzing the sale deeds registered for purchase of the property. The Assessing Officer, without appreciating relevant facts, simply made additions towards on money for A.Y.2020-21, even though the incriminating material does not show any cash payment for purchase of property and further, it falls under the A.Y.2020- 21. The learned counsel for the assessee, further referring to sale deeds for purchase of property, submitted that Sheet A1 found during the course of search records particulars of property and the name of the vendor. Further, out of six properties referred to in Sheet A1, Sl.1 to 4 has been registered in the name of appellants in the financial year 2018-19, which is evident from sale deed dated 28.12.2018 and 08.01.2019 which falls under the F.Y.2018-19, relevant to the A.Y.2019-20. Further, Sheet A1, clearly shows, payment of consideration through RTGS / Cheque amounting to Rs.9,34,60,000/- and the balance amount of Rs.4,65,40,000/- is to be paid. Although Sheet A2 shows that the amount of Rs.1,85,00,000/- has been paid and the balance amount of Rs.2,80,40,000/- is yet to be paid, but there is no date in the said document to allege that the said money has been paid for the impugned assessment year. Assuming for a moment, the appellant has paid cash for purchase of property, but in the absence of specific date in the said document, it may be presumed that the cash has been paid at the time of registration of property and if we consider the said date of cash payment alleged to have been made for purchase of property, it does not pertain to A.Y.2020-21 as considered by the Assessing Officer, but it falls in the A.Y.2019-20 as claimed by the appellant company. The Ld.CIT(A), without considering 15 the relevant facts, simply sustained the additions made by the Assessing Officer, therefore, he submitted that the additions made by the Assessing Officer should be deleted. 11. The Ld.DR, Shri Srinath Sadanala, on the other hand, supporting the order of the Ld.CIT(A) submitted that there is no merit in the legal ground taken by the appellant, challenging the jurisdiction of the Assessing Officer, in assuming jurisdiction u/s 153C of the Act. The Assessing Officer has assumed valid jurisdiction on the basis of satisfaction note, which clearly shows that the undisclosed income of the appellant for the A.Y.2020-21, on the basis of incriminating material found during the course of search, coupled with statements recorded from Shri D.Venugopal Reddy and Shri MSN Reddy. Shri MSN Reddy has filed an affidavit and admitted undisclosed income of Rs.4,65,40,000/- for the A.Y.2020-21 and from the above, it is undisputedly clear that there is cash payment for purchase of property, which pertains tot A.Y.2020-21. Therefore, the argument of the appellant, in light of certain judicial precedents that in the absence of specific finding of undisclosed income, the assumption of jurisdiction is invalid is devoid of merit and cannot be accepted. The Ld.DR further submitted on the issue of additions made towards on money for purchase of property, the documents found during the course of search, clearly establish payment of on-money and this fact has been confirmed from the sworn statement recorded from Shri D.Venugopal Reddy and affirmed by Shri MSN Reddy. Although there are contradictory statements in respect of cash payment and date of payment, but the fact remains that the 16 person who handled the transaction, is well aware of the date of payment and if we consider the said analogy, the affidavit filed by Shri D.Venugopal Reddy clearly proves cash payment for the A.Y.2020-21. Thus, the Assessing Officer and the Ld.CIT(A), after consideration of relevant facts has rightly made additions towards payment of on-money and their order should be upheld. 12. We have heard both the parties, perused the material on record and gone through the orders of the authorities below. We have also carefully considered relevant case laws referred to by both the parties in support of their arguments. The facts borne out from the record clearly shows that during the course of search in the residential premises of Shri D.Venugopal Reddy on 24.02.2021, incriminating material in the form of certain loose sheets was found and seized vide Annexure A/DVR/RES/01 page 23 to 36 and the said seized documents pertains to details of purchase of property by the appellant company and its Directors from MNR Dairy Farm, Rajapur and Rayapally villages. The documents clearly records particulars of property purchased by the appellant company from the vendors and consideration paid for purchase of property. The said documents also records particulars in respect of dates of registration and pending registration of some lands. As per the said documents, in Sheet A1, there are particulars about six properties, out of which, registration for properties at Sl.1 to 4 was completed and registration for properties at Sl.5 and 6 is pending. The said document further shows total consideration paid for purchase of property, amount paid through RTGS / 17 Cheque and balance to be paid. Further as per the said document, total consideration paid for purchase of property was at Rs.14 crores, out of which Rs.9.35 crores has already been paid by RTGS/Cheque. The balance amount of Rs.4.65 crores has been stated to be payable. In Sheet A2, Rs.1.85 corers has been stated to be paid and Rs.2.8 crores is yet to be paid. Admittedly, there are no dates in the said two sheets, either, the date of registration of the property or the date of payment of cheques and cash payment. The Assessing Officer made the addition of Rs.4,65,40,000/- on the ground that the documents specify cash payment and the same has been admitted by Shri D.Venugopal Reddy and confirmed by Shri MSN Reddy in their statement recorded u/s 132(4) and also filed affidavit during the course of search and post search investigation. According to the Assessing Officer, there are clear evidences for payment of cash towards purchase of property and same falls under the A.Y.2020-21. 13. We have given our thoughtful consideration to the reasons given by the Assessing Officer to make additions towards on- money as unexplained investment and sustained by the Ld.CIT(A) and we ourselves do not subscribe to the reasons given by the Ld.CIT(A), for the simple reason that on perusal of Sheet A1 and A2, we find that there is no evidence of payment of cash for purchase of property. Further, there are no details as to when the said cash was paid and to whom it was paid. Although, Shri D.Venugopal Reddy admitted to have paid cash for purchase of property by the appellant company and its directors and the same has been confirmed by Shri MSN Reddy, 18 but there are contradictory admission in the statement and affidavit filed during the course of search and post search investigation. If we go by the statement recorded from Shri D.Venugopal Reddy and Shri MSN Reddy, there is evidence for payment of cash for purchase of the property, although no indication as to when said cash payment has been made, whether for the A.Y.2019-20 or 2020-21. Further, the AO has linked the cash payment to other particulars of the property including date of registration and cheque / RTGS payments. Since there is clear evidence for purchase of property from the vendors specified in Sheet A1 and also consideration paid through RTGS/Cheque is matching as per the books of accounts of the appellant, in our considered view, the said documents should be read in toto and therefore, the arguments of the appellant that the loose sheets found during the course of search is a dumb document and on the basis of said documents, no additions can be made is illogical and cannot be accepted. 14. Having said so, let us come back, is there any cash payment made for purchase of property and if so, when said cash payment has been made. Admittedly, in Sheet A1 and A2 there are no dates of payments and persons to whom the said cash was paid. Since, there are no dates of payments in the documents referred to by the Assessing Officer, then obviously, we have to refer back to other circumstantial evidence like date of registration of the property. Admittedly, Sl.1 to 4 properties have been registered on 28.12.2018 and 08.01.2019. Sl.5 and 6 properties have been registered on 20.04.2023. If we go by the 19 date of registration of the properties, SL.1 to 4 properties have been registered in the F.Y.2018-19, relevant to A.Y.2019-20. Sl.5 and 6 properties have been registered on 20.04.2023, which falls under the F.Y.23-24, relevant to A.Y.2024-25. We are not concerned with the properties registered at Sl.5 and 6, because the two properties have been registered in subsequent financial years and cash payments, if any has been made for the said property, which have to be dealt accordingly. In so far as properties registered at Sl.1 to 4, admittedly these four properties have been registered in the financial year 2018-19, relevant to the A.Y.2019-20 and this fact has not been disputed by the Assessing Officer and the Ld.CIT(A). Assuming for a moment, there is cash payment for purchase of property as alleged by the Assessing Officer, in fact, admitted by Shri D.Venugopal Reddy and Shri MSN Reddy, said cash payment has to be assessed in right assessment year based on the dates of payments. Since, there are no dates of payment in the Sheet A1 and Sheet A2, then obviously, we have to refer to other circumstantial evidence like, date of sale deed. If we go by dates of sale deed of four properties, then the said properties have been registered in the F.Y.2018-19, relevant to A.Y.2019-20 and therefore, in our considered view, if at all any cash payment is made for purchase of property, then obviously the said cash payment may have been made either before the date of registration of the property or at the time of registration of the property. It is a common practice in real estate transaction that consideration for purchase of property, whether it is cash or cheque has been fully paid either before the registration of the property or at the time of registration of the property. Therefore, 20 going by the said logic, in our considered view, cash payment as alleged by the Assessing Officer made for purchase of property should be considered in light of sale deed registered for purchase of property. If we go by the said dates, the alleged cash payment towards purchase of property assessed by the Assessing Officer as unexplained investment does not fall under the A.Y.2020-21. Further, this fact has been confirmed by subsequent affidavit filed by Shri MSN Reddy, who has thoroughly explained the transaction on the basis of evidence and admitted additional income in the name of appellant company for the A.Y.2019-20. Therefore, we are of the considered view that the cash payment if any made for purchase of property at Rs.4,65,40,000/- cannot be assessed for the A.Y.2020-21. Thus, we direct the Assessing Officer to delete the addition of Rs.4,65,40,000/- as unexplained investment for the A.Y.2020-21. 15. Coming back to legal issue challenged by the assessee, in light of the satisfaction note recorded by the Assessing Officer for assessment or jurisdiction u/s 153C of the Act. Although, both the parties have argued the issue extensively, in light of certain judicial precedents, but the issue become merely academic in nature, because the additions made by the Assessing Officer towards unexplained investment for purchase of the property has been deleted on substantial ground and therefore, legal ground taken by the appellant, challenging the jurisdiction of the Assessing Officer becomes infructuous. Thus, the ground of appeal taken by the appellant challenging the jurisdiction of the Assessing Officer, in light of judicial 21 precedents, including the decision of Hon'ble Supreme Court in the case of CIT Vs.Sinhgad Technical Education Society (supra) has been dismissed as infructuous. 16. In the result, appeal filed by the assessee is allowed. Order pronounced in the Open Court on 10th January, 2025. Sd/- Sd/- (K. NARASIMHA CHARY) JUDICIAL MEMBER (MANJUNATHA G.) ACCOUNTANT MEMBER Hyderabad, Dated 10th January, 2025 L.Rama, SPS Copy to: S.No Addresses 1 M/s Pradyumna Agros Private Limited, 8-3-167/D/16, Vengala Rao Nagar, Kalyan Nagar-1, Hyderabad 2 The Asst.Commissioner of Income Tax, Central Circle- 2(4), Hyderabad 3 The Pr.CIT, Central Circle, Hyderabad 4 The DR, ITAT Hyderabad Benches 5 Guard File By Order "