M S Goel (HUF) vs ITO, Ward 28(1)

PER ANUBHAV SHARMA, JM:

This appeal preferred by the assessee against the order dated 27.11.2025 of Ld. National Faceless Appeal Centre (NFAC) Delhi (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in DIN & Order No: ITBA/NFAC/S/250/2025-26/ 1083069188(1) arising out of the assessment order dated 30.12.2018 u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by Ward-28(1) for AY: 2016-17.

On hearing both sides we find that the assessment was completed u/s 143(3) of the Act where an addition of Rs.71,00,000/- was made u/s 68 of the Act on allegation of assessing officer that assessee’s claim of receiving of Rs.71,00,000/- from M/s Rishyab Infratech Pvt. Ltd. against an agreement to sell is doubtful and the creditworthiness of the alleged vendee is not established. Ld. CIT(A) has also upheld the addition. Ld. Counsel has submitted before us that the agreement was entered in the year 2012 for a total sale consideration of Rs.4 crores and assesse had received Rs.5,00,000/- at the time of execution of agreement and Rs.71,00,000/- were received during the year through banking channel. Ld. Counsel has submitted that there were certain disputes between both sides and even the name of vendee company was struck off by Registrar of companies and a copy of order dated 22.03.2024 is filed to show that vide Company Appeal No. 41/ND/2023 at the instance of one of the shareholders the name of the company has been restored in the register of companies maintained by the Registrar of Companies, NCT Delhi & Haryana. Ld. Counsel has submitted that assesse was unable to lay hand on material evidences to establish the genuineness of transaction on the basis of creditworthiness of the vendee of the property. However, now as there has been some settlement between parties and the company has also become functional assesse has evidences available to establish genuineness of transaction and the creditworthiness of the vendee company.

Though ld. DR has relied the impugned orders we find from the relevant material available in the paper book that as the issue pertains to receipt of part sales consideration on account of an agreement to sell and revenue does not dispute that assessee holds the property and issue is only about creditworthiness of purchaser. In any case if assessee has alienated the immovable property income will be taxable as capital gains and certainly provision of section 68 of the Act may not be applicable but provision to tax capital gain may apply. So the assesse deserves an opportunity to justify the genuineness of transaction and dispel the burden for the purpose of Section 68 of the Act.

The impugned orders are set aside and the issue on merits are restored to the files of ld. AO to give fresh opportunity of hearing to the assesse and pass an order afresh.