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Judgment
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
This appeal arises from order dated 28.11.2024, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”) by Ld. CIT(A)-24, New Delhi. The fact relevant for this case is that a search action was conducted on the Khemka Group on 14.01.2021. During the course of this action, the mobile phone of one Mayank Khemka was seized. It was found that there were some allegedly incriminating exchange of messages pertaining to a property (A-32, West End, New Delhi) from the seller (M/s Sicpa India Private Limited, being the assessee). The allegation is that Rs.23 crores was received by the assessee in cash. The Ld. AO added this amount u/s 69A of the Act.
The aggrieved assessee approached the CIT(A) where he could get relief on the ground that an addition was also made in the hands of the buyer on the identical allegation of undisclosed cash transactions. The Ld. CIT(A) followed the decision rendered by his predecessor in the case of the buyer i.e. Khemka Group where the said amount was directed to be deleted. In effect the Ld. CIT(A) followed the findings (extracted in para 4.1.7 of the impugned order) in the order dated 21.12.2023 in the case of the Khemka Group. Needless to say, the assessee succeeded on the ground that the entire gamut of seized material and statements recorded revealed that there was no cash transaction as alleged (paras 4.1.8 and 4.1.9 of the impugned order).
The Revenue is aggrieved and has approached the ITAT with the following grounds of appeal: -
1.“The Ld. CIT(A) has erred n deleting the addition of Rs.23,00,00,000/- made by the Assessing Officer in the order passed u/s 153C r.w.s. 143(3) of the Act.
2.The Ld. CIT(A) has erred in not considering the evidence found during the course of search proceedings relied upon which the addition has been made.
3.The appellant craves leave to add, amend, alter or withdraw any or all grounds of appeal at any time before and during the course of hearing.”
Before us the Ld. DR read out extensively from the Ld. AO’s order, specifically pages 2 & 16 thereon. It was argued that Mr. Mayanak Khemka was not able to explain his chats regarding the impugned transaction. The Ld. DR read out the transcript of the relevant chat at page 17 of the Ld. AO’s order and stated that the said property was agreed at a price of Rs.99 crores, in which Rs.76 crores was received through banking channels and Rs.23 crores in cash.
The Ld. AR placed on record a coordinate bench order in the case of the Khemka Group, which itself adjudicated the order of Ld. CIT(A) dated 21.12.2023 (as mentioned earlier). The Ld. AR pointed out the findings at pages 42 & 43 of this order (ITAs 1000, 1002, 1004, 1005/Del/2024). The relevant portion from this order, through which the said amount of Rs.23 crores has been dealt with from the payer’s end, is relevant and deserves to be extracted as under:
“16.We have also observed from the detailed findings of the Ld CIT(A) that he has analyzed the negotiations which was started thru WhatsApp on 26.08.2018 and till the registration of the property on 16.05.2019. He analyzed the various chats and documents which are found seized which includes the pages 75 and 76 identified as annexure A2, wherein the details of breakup of the amount under dispute as Rs. 76 crores towards cost of purchase of property and 23 crores towards the cost of refurbishment. It also contained the detailed cost breakup of the cost of refurbishment to be carried out by the vendor. He also observed that on 10.04.2019, the board resolution was passed by the board of directors to proceed with the purchase of the property without the estimated refurbishment cost of Rs.23 crores. Accordingly, the transaction was completed. At the time of appellate proceedings, he observed that all the documents found and seized during the search proceedings identified as Annexure A2, which includes not only the sale deed but also the other documents indicating the terms of the deal and also mentions the split up of 76/23, towards cost of purchase and cost of refurbishment. The documents found during the search which substantiate the initial negotiations between the parties through WhatsApp chats. In our view, the Ld CIT(A) has rightly appreciated the concept of presumption in the case of documents found in possession of the searched parties during the search, it presumed that the contents of the such documents are true. Therefore, the documents found during the search and WhatsApp chats are presumed to be true and represent the correct details as per the provisions of the section 132(4A) and 292C of the Act. Further the statements recorded post search proceedings were also corroborates with the documents found during the search.Even the AO in the report submitted before the first appellate authority wherein he accepted the documents found during the search, other statements and board resolutions placed on record confirms the pre and post negotiations before completion of the purchase of the property.
17.After considering the submissions of both parties and detailed as well as reasoned findings of Ld CIT(A), we are in agreement that the AO had partially agreed with the contents found during the search relating to cost of registered value as mentioned in the agreement and refused to accept the other corroborated evidences which substantiate the stand of assessee and also the transaction was completed before the search not even commenced. All the transactions were happened prior to search and the documents found during the search presumed to be true and also details found during the search are matching with the transactions carried on by the parties. Therefore, we do not see any reason to disturb the findings of Ld CIT(A), accordingly the grounds raised by the revenue are accordingly dismissed.”
We have considered the rival submissions and have gone through the records before us. We have also perused the order of the coordinate bench in the case of the Khemka Group (supra). It is seen that there is a clear-cut finding of fact that the amount of Rs.23 crores represented cost of refurbishment. Thereafter, it was decided to purchase the property without any refurbishment whatsoever. It has been recorded in the said ITAT order (supra) that an analysis of the entire conspectus of facts and circumstances revealed that the proposed activity pertaining to the impugned amount did not take place at all. Accordingly, following the findings given by the ITAT (supra), we find that the impugned addition has rightly been deleted by the Ld. CIT(A).
In the result, appeal of the Revenue is dismissed.