VISHAL BHUTANI,DELHI V. THE COMMISSIONER OF INCOME TAX, APPEALS, DELHI

ITA 285/DEL/2025

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The case involves Vishal Bhutani, the appellant, who contested the income tax assessments and penalties imposed following a search and seizure operation related to another individual, Pranjil Batra. The assessments were based on documents found during the operation, which indicated underreported income from property transactions. The Tribunal examined the validity of these documents and the applicability of penalties under section 271D of the Income-tax Act, 1961. The Tribunal's decision differentiated between the income addition based on the incriminating documents and the penalty for cash transactions, leading to the dismissal of the former and the allowance of the latter.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839192 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Appeal Filed On: 17-01-2025
• Other Referred Cases: ITO, Ward-2, Kanchipuram vs. Shri R. Dhinagharan (HUF), Somireddy Sudhakar Reddy, Ibrahimpatnam vs. ITO, Ward-9(1), Hyderabad, Shri Umakant Sharma, Jhabua vs. JCIT, Ratlam
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: RAJIV SACHDEVA
• Keywords: Search and seizure; Valuation report

Judgement Text

"P a g e | 1 284 & 285/Del/2025 Vishal Bhutani (AY: 2019-20) IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.284/Del/2025 (Assessment Years: 2019-20) Vishal Bhutani A-52, Priyadarshni Vihar New Delhi – 110092 Vs. ACIT, Central Circle-3 NCC, DIT(S) Jhandewalan Ext. New Delhi – 110055 \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No: AELPB7386R Appellant .. Respondent ITA No.285/Del/2025 (Assessment Years: 2019-20) Vishal Bhutani A-52, Priyadarshni Vihar New Delhi – 110092 Vs. ITO, Ward-1 The Commissioner of Income Tax, Appeals Delhi – 110055 \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No: AELPB7386R Appellant .. Respondent Appellant by : Sh. Rajiv Sachdeva, CA Respondent by : Sh. Rajesh Kumar Dhanesta, Sr. DR Printed from counselvise.com P a g e | 2 284 & 285/Del/2025 Vishal Bhutani (AY: 2019-20) Date of Hearing 07.01.2026 Date of Pronouncement 18.02.2026 O R D E R PER ANUBHAV SHARMA, JM: These are appeals preferred by the Assessee against the orders of the Ld. Commissioner of Income-tax (Appeals) (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in appeals filed before him against the orders of the ld. Assessing Officer (hereinafter referred to as the Ld. AO, for short) passed u/s 153C& 271D of the Income-tax Act, 1961 (hereafter referred to as ‘the Act’). Further details of the orders of the lower authorities are as under:- ITA No. & AY Ld. FAA who passed the appellate order Appeal No. & Date of order of the Ld. FAA AO who passed the assessment order & Date of order 284/D/25 2019-20 CIT(A)-25, Delhi DIN & Order No : ITBA/APL/S/250/2024- 25/1071421715(1) Dated 20.12.2024 DCIT, Central Circle-3 Dated 10.02.2023 385/Del/25 2019-20 CIT(A)-25, Delhi DIN & Order No : ITBA/APL/S/250/2024- 25/1071425643(1) Dated 20.12.2024 Addl. CIT, Central Range-1 Dated 30.08.2023 Printed from counselvise.com P a g e | 3 284 & 285/Del/2025 Vishal Bhutani (AY: 2019-20) 2. The assessee’s return was filed at total income of Rs.39,11,880/- and consequent to a search and seizure operation in the cases of Sh. Pranjil Batra Group on 17.08.2020, the assessee’s case was taken up for search assessment u/s 153C of the Act. The appellant's grievance arises from the assessment order dated 10.02.2023 passed by the AOu/s 153C of the Act wherein the income of the appellant has been assessed at Rs. 1,51,11,880/- as against the returned income of Rs. 39,11,880/- and the addition has been sustained by ld. CIT(A). The relevant findings of para 7.2 are reproduced below: “7.2 Grounds No. 1, 2, 3, 4, 5, 7 and 8: - All these grounds of appeal raised by the appellant pertain to the addition made in the impugned assessment order of Rs.1,12,00,000/- on account of under-reported amount received as consideration on transaction of property as per documents found during the search and seizure action in the Pranjit Batra group of cases. The appellant has contended that the incriminating document/s on which basis the addition was made are photocopies and mismatched documents and that such addition made is bad in law. He has further contended that the impugned assessment order has not taken intocognizance the valuation report obtained in respect of the said property from the valuation officer. Since all these grounds relate to the issue of the single addition made in the assessment order, they are taken up together for adjudication for the sake of brevity and clarity. 7.2.1 I have considered the facts of the case as emanating from record as well as the grounds of appeal and submissions filed by the appellant. The appellant filed ITR for the year on 07.10.2019 declaring total income of Rs. 39,11,880/-. A search and seizure action Printed from counselvise.com P a g e | 4 284 & 285/Del/2025 Vishal Bhutani (AY: 2019-20) was carried out on 17.08.2020 in the case of the PranjilBatra group wherein certain incriminating documents relating to property transactions were found from the premise of the searched person pertaining to the appellant. After going through the contents of those incriminating documents satisfaction was recorded. Accordingly satisfaction note was drawn and proceedings under section 153C of the Act carried out. During assessment proceedings, it was observed by the AO that a Annexure A-6 had been found which was an 'agreement to sell and purchase' dated 29.04.2018 for a property bearing address F- 193/551/1-2, Mangal Bazar, Laxmi Nagar, Delhi having an area of 175 sq. yd. (one built up portion of three plus one room set at upper ground floor), belonging to the appellant. The agreement to sell was between the appellant (seller), viz., M/s S.S Associates through its proprietor Shri Vishal Bhutani and Ms. Poonam Batra (purchaser), w/o Shri Pranjil Batra for a sum/consideration of Rs. 1,48,50,000/-. Of this amount, Rs. 25,00,000/- had been received by the appellant from the purchaser by cheque no. 000001 dated 30.04.2018 drawn on Kotak Mahindra Bank and Rs. 21,000/- was received in cash. The agreement, duly signed by both parties, also mentioned that the purchaser would pay the balance amount of Rs. 1,23,29,000/- to the seller (appellant) on or before the execution of documents/sale deed. Further, Annexure A-8 found during the search and seizure operation on the PranjilBatra group revealed an original sale deed showing transfer of the said property during the year to Ms. Poonam Batra for a sale consideration stated to be Rs. 36,50,000/-. In the deed dated 12.10.2018, it was seen that Rs. 25,00,000/- was received by the appellant vide cheque no. 000001 dated 30.04.2018 drawn on Kotak Mahindra Bank, perfectly tallying with the information mentioned in the agreement to sell and purchase dated 29.04.2018 found which had revealed the unaccounted component of the balance payment too. This, as mentioned in the impugned assessment order, establishes the genuineness and correctness of the sale agreement dated 29.04.2018. The transaction clearly had materialized as per timing and condition mentioned in the agreement itself. The difference of the amount between the actual consideration as per agreement and the amount revealed in the sale deed, amounting to Rs. 1,12,00,000/- was thus added vide the impugned assessment order. Printed from counselvise.com P a g e | 5 284 & 285/Del/2025 Vishal Bhutani (AY: 2019-20) 7.2.2 During the course of appellate proceedings, the appellant has raised two main arguments. The first argument is that the agreement to sell and purchase found during search proceedings did not belong to him and could have been fabricated by the purchaser/searched party and that the said document did not have evidentiary value as it was a photocopy. He also contends that there were more than one registries done for the property, leading to a mismatch and that the amount received was actually Rs. 73,00,000/- based on two registries of Rs. 36,50,000/- each for the same property on the insistence of the purchaser. However, no merit is found in this contention as the appellant has not been able to reconcile and corroborate his version with evidence. The AO has examined the issue in-depth in the assessment order and elaborated his findings, with which I have no reason to differ.Notwithstanding this, it is also seen that there is inherent contradiction in the appellant's averment too - on the one hand he says two deeds were executed by him for the same property and on the other hand he says the purchaser may have fabricated the agreement document as the appellant refused to get two registries done. As regards the veracity of the seized document, the contents of the same are very clear and can be grasped in unambiguous terms and there is no need of further corroborative material in this regard. Apart from clearly spelling out details of the property etc. and the timing and amount of the transactions, it bore signatures of all concerned parties. Significantly, as mentioned supra, the cheque number, date, amount and bank mentioned in the agreement to sell/purchase was the same as that mentioned in the registered sale deed, which clinches the veracity of the seized document. The appellant cannot brush off his liability vis a vis the contents of one document while own up the contents of the other document, that too with unsubstantiated riders. In support of his submission, various case laws have also been referred to by the appellant, however, the facts of the cases relied upon are clearly distinguishable from the facts of the appellant's case under consideration and cannot be seen to be squarely applicable thereon. Each case has to first be examined against the touchstone of its factual matrix before proceeding to the applicability of judicial decisions thereon. Printed from counselvise.com P a g e | 6 284 & 285/Del/2025 Vishal Bhutani (AY: 2019-20) 7.2.3The second argument made by the appellant during the course ofappellate proceedings pertains to the issue of valuation of the said property. He states that the valuation of the property was gotten done by the department from approved valuer, who, vide his report has valued the property at Rs. 51,84,000/-which fact has been ignored by the AO completely. I have considered the contention of the appellant. Even if the claim of the appellant regarding valuation report is found correct, it stands to logic that any valuation report can at best be an estimation based on factors existing at the time. In the instant case, in the face of incriminating documents found clearly mentioning specific amounts, dates and transactions, thenecessity to rely on a valuation report does not arise. 7.2.4The appellant cannot escape the liability of being the recipient of theamount clearly mentioned in the seized and incriminating document/s. That the documents were found at the premise of the searched person, i.e., the purchaser of the property, on whom the search action had been carried out, cannot absolve the appellant, i.e., the seller of the property of his role in the transaction and the receipt of the amounts mentioned in the seized document. It is a common practice in property transactions that payments over and above the registered amount/amount mentioned in the sale deed are made out of books, i.e., in cash. Evidence of such nature, containing details such as date, property address and specific amounts - found during the search and seizure action cannot thus be brushed under the rug as being a document lacking evidentiary value. Doing so would negate the very purpose of enforcement and deterrent actions like search and seizure carried out to check tax evasion. 7.2.5 No merit is thus found in these grounds of appeal raised by the appellant. The addition of Rs.1,12,00,000/- made by the AO is sustained and the grounds of appeal raised are dismissed.” 3. On hearing both sides we find that on behalf of assessee the contention that has been raised is that photo copy of the agreement is not admissible in Printed from counselvise.com P a g e | 7 284 & 285/Del/2025 Vishal Bhutani (AY: 2019-20) the evidence and same could not have been relied in the absence of any corroborating evidences found in the search. 3.1 Ld. DR on the contrary, had submitted that facts appearing for the agreement to sell are substantiated and corroborated by subsequent sale deed. 4. After taking into consideration the facts and circumstances we find that alleged agreement to sell is shown to be executed between the assessee Sh. Vishal Bhutani and Smt. Poonam Batra wife of Sh. Pranjit Batra with regard to property for which in the agreement it is mentioned that the sale consideration is Rs.1,48,50,000/-. There is mention of Cheque dated 30.04.2018 which is subsequent to the agreement dated 29.04.2018. The agreement mentions of payment of cash of Rs.21,00,00/-.Agreement mentions that remaining amount Rs.1,23,29,000/- shall be paid at the time of execution of sale deed on or before 29.09.2018 and subsequently there is post script endorsement under initials of assessethat the time is mutually extended by 15 days till 15.10.2018. 4.1 Going through this agreement we find that it is signed by both the partied Vishal Bhutani & Pranjil Batra on all the 3 pages. Further it comes up Printed from counselvise.com P a g e | 8 284 & 285/Del/2025 Vishal Bhutani (AY: 2019-20) that the agreement is duly witnessed by three persons and there is also an endorsement of document writer. 5. As we compared this agreement to sell with a copy of sale deedswhich are also reproduced in the assessment order we find that they are duly executed between the same set of parties and the consideration mentioned is only Rs.36,50,000/-, in each sale deed. Then sale deed executed on 25.10.2018 mentioned that property bought is 3 plus 1 room set at upper ground floor and the other sale deed dated 12.10.2018 also mentioned same property has been purchased. 5.1 In para 4.8 AO mentions that on the physical verification it was found there are actually two flats of same size and both the sale deeds mentioned the property detail of upper ground floor only. Thus, it appears on the upper ground floor there were two separate flats which were subject to two different sale deed mentioning similar description. 6. It comes up that in the sale deed executed on 12.10.2018 there is a reference of cheque of Rs.25,00,000/- issued on 30.04.2018 which matches with the details mentioned in the agreement to sell wherein the total sale consideration was mentioned as Rs.1,48,50,000/-. Printed from counselvise.com P a g e | 9 284 & 285/Del/2025 Vishal Bhutani (AY: 2019-20) 6.1 An interesting and crucial aspect that comes up from perusal of this agreement and sale deeds is that in the agreement one of the witnesses mentioned is shown to be resident of 346 West Guru Angadnagar, Laxmi Nagar, Delhi and this person Amarjeet Sing s/o Surjeet Singh has witnessed both the agreements and the sale deed dated 25.10.2018 and 12.10.2018. This cannot be a mere coincidence. 7. The document in the form of agreement sell is not an inchoate agreement with any latent or patent ambiguity to say same is a dumb document or document is not enforceable under law. The facts and circumstances discussed above and also done by ld. tax authorities below indicate that agreement to sell is duly corroborated by the act of the parties and there was no necessity of independent corroboration or any further enquiry, as the document is complete and admissions are conclusive. Thus, the mere fact that it was a mere photo copy which was recovered does not come to help the assessee. 8. Thus, we find no substance in the ground as raised in the quantum appeal ITA 284/D/25. Printed from counselvise.com P a g e | 10 284 & 285/Del/2025 Vishal Bhutani (AY: 2019-20) 9. In the light of aforesaid discussion we are of the considered view that the proceeding u/s 271D have been invoked for making cash payments at time of sale deeds. The aforesaid facts as discussed establish that the transaction of the sale of the property involved payment of consideration in cash. However, the law as now stands and settled by co-ordinate benches is that that cash payment or its receipt at the time of execution of registered sale deed is distinct from advance money contemplated under the amended provisions of sec 269SS. Referring to Finance Bill 2015 intent and CBDT Circular explaining “specified sum,” co-ordinate benches have observed that the amendment targeted cash advances in real-estate transactions to curb black money, not final consideration paid before the Sub-Registrar. Hence, sec 269SS was held inapplicable to completed sale transactions. Reliance for this can be placed on the decision of Chennai Bench dated 29.12.2023 in the case of ITO, Ward-2, Kanchipuram vs. Shri R. Dhinagharan (HUF), Kanchipuramin ITA.No.3329/Chny/ 2019, Hyderabad bench dated 24.12.2025 in the case of Somireddy Sudhakar Reddy, Ibrahimpatnam, RR District vs. ITO, Ward-9(1), Hyderabad in ITA.No.1505 /Hyd./2025 and ITAT, Indore Bench of the Tribunal dated 19.07.2023 in the case of Shri Umakant Sharma, Jhabua vs. JCIT, Ratlam in ITA.Nos.364 to 366/Ind/2022, Printed from counselvise.com P a g e | 11 284 & 285/Del/2025 Vishal Bhutani (AY: 2019-20) have been relied. Thus levy of penalty u/s 271D of the Act cannot be sustained. The grounds in ITA285/D/25 deserves to be sustained. 10. Consequently ITA 284/D/25 is dismissed and ITA 285/D/25 is allowed with consequences to follow the event. Order pronounced in the open court on18.02.2026 Sd/- (Manish Agarwal) Sd/- (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 18.02.2026 Rohit, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "