ITO Vs Deepak Kumar (ITAT Chandigarh)
When Seller’s Addition Falls, Buyer’s 69 Addition Can’t Survive:; Buyer Can’t Be Taxed on Extrapolated Rate: ITAT Chandigarh Deletes ₹1.52 Cr Addition
The Chandigarh Bench “A” of the ITAT, vide order dated 30.12.2025 in ITO, Ludhiana v. Shri Deepak Kumar (Khurana Agro Industries) (ITA No.721/Chd/2025 & CO No.33/Chd/2025, AY 2019-20), dismissed the Revenue’s appeal and allowed the assessee’s cross-objection, thereby deleting the addition of ₹1.52 crore made u/s 69 r.w.s. 115BBE on account of alleged unexplained investment in purchase of immovable property.
The reassessment was initiated u/s 147 solely on the basis of search findings in the case of M/s Homelife Buildcon Pvt. Ltd., the seller, where the AO had extrapolated a uniform sale rate of ₹38,500 per sq. yard for the entire colony and applied the same to the assessee’s purchase of a 500 sq. yard plot. On this basis, against the registered consideration of ₹40.50 lakh, the AO treated ₹1.52 crore as unexplained investment in the hands of the buyer.
The Tribunal noted that the very foundation of the reassessment in the buyer’s case was the extrapolated rate adopted in the seller’s case. Crucially, the addition based on such extrapolation had already been deleted by the CIT(A) and confirmed by the ITAT in the case of M/s Homelife Buildcon Pvt. Ltd. for AYs 2021-22 and 2019-20. Once the seller’s addition itself did not survive, the Tribunal held that no addition could be sustained in the hands of the purchaser on the same basis.
The ITAT further observed that no independent incriminating material was found to show that the assessee had paid any on-money over and above the registered consideration. The addition was purely derivative and based on presumptions drawn from the seller’s case. In such circumstances, the Tribunal held that no useful purpose would be served by remanding the matter, as the issue had already attained finality at the Tribunal level.
Accordingly, the ITAT allowed the assessee’s cross-objection, deleted the addition of ₹1.52 crore, and dismissed the Revenue’s appeal in entirety.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
