WhatsApp Chats, Screenshots & Suspicion Can’t Prove On-Money: ITAT Jaipur

Advance Strips Pvt. Ltd. Vs DCIT (ITAT Jaipur)

WhatsApp Chats, Screenshots & Suspicion Can’t Prove On-Money: ITAT Deletes ₹9.51 Crore Addition and Quashes U/s 153C Assessment

The Jaipur ITAT delivered a significant ruling by quashing the assessment under Section 153C and, on merits, also deleting the addition sustained on account of alleged on-money payment for purchase of land. The case arose from a search on the Om Kothari Group where WhatsApp chats, screenshots and statements of third parties were relied upon to allege that the assessee had paid unaccounted cash over and above the registered purchase consideration for a plot of land. The Assessing Officer ultimately made an addition of ₹22.54 crore under Section 69, which the CIT(A) reduced to ₹9.51 crore by adopting a proportional area-based approach.

On the jurisdictional issue, the Tribunal held that the search for purposes of Section 153C is deemed to commence only when the seized material is handed over to the Assessing Officer of the other person. In the present case, the seized documents were received by the assessee’s Assessing Officer on 15.03.2023, which was after the cut-off date of 01.04.2021. Therefore, the old Section 153C machinery could not be invoked. Following judicial precedents, the Tribunal held that the proceedings were time-barred, void ab initio and without jurisdiction, resulting in the assessment being quashed.

Even on merits, the Tribunal found that the entire addition rested on uncorroborated WhatsApp chats, screenshots and third-party statements. No independent evidence was found to establish actual cash payment, no trail of funds was unearthed, and no incriminating material directly linked the assessee with any on-money transaction. The Tribunal observed that loose chats and digital extracts, without corroboration, do not possess sufficient evidentiary value to sustain such a massive addition.

A crucial factor that weighed with the Tribunal was the denial of cross-examination. The assessee had specifically sought an opportunity to cross-examine the persons whose statements and WhatsApp communications formed the sole basis of the addition, but the request was rejected. Relying on Supreme Court and High Court decisions, the Tribunal held that an adverse conclusion cannot be drawn solely on third-party material without granting cross-examination.

The Tribunal also rejected the CIT(A)’s methodology of estimating on-money by applying the seller’s alleged cash receipt rate to the assessee’s purchase. It held that evidence of cash received by a seller does not automatically establish that a particular purchaser paid such cash, especially when there was no direct evidence connecting the assessee to the alleged payment. Accordingly, the addition of ₹9.51 crore sustained by the CIT(A) was deleted in full. The Revenue’s appeal was dismissed.

FULL TEXT OF THE ORDER OF ITAT JAIPUR

The captioned cross-appeals have been preferred by the Assessee and the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals) [hereinafter referred to as “Ld. CIT(A)”] dated 19.02.2024 passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “Act”) for the Assessment Year (AY) 2019-20. Since facts and issues involved in both these appeals are common and identical, hence these have been heard together and are being disposed of by this common order. ITA No. 1422/JPR/2025 filed by the Assessee is taken as the lead case.

2. Brief Facts:

2.1 The brief facts of the case, as extracted from the assessment order and the material placed on record, are that the assessee company derives income from rent and was not having any active business operations during the year under consideration. It filed its return of income on 14.12.2019 declaring an income of Rs. 60,84,390/-.

2.2 A search and seizure action u/s 132 of the Act was conducted in the case of third parties, namely “Om Kothari Group” of Jaipur on 13.07.2020. One of the companies of the Kothari Group covered in the search action was ‘Om Metals Infotech Private Ltd.’, whose name was later on changed to `M/s Ultrawave Projects Private Limited.’

3. During the course of the search at various premises of the group, imaging of mobile phones, laptops, and personal computers belonging to the key persons of the group, namely Shri C.P. Kothari, Shri Sunil Kothari, and Shri Vishal Kothari was carried out by computer experts. The data extracted from the iPhone of Shri Sunil Kothari revealed several images and WhatsApp chats indicating huge amounts of unaccounted cash transactions. The said chats were primarily between Shri Sunil Kothari and Shri Vimal Jain, who was the accountant of the Kothari Group. Statements of Shri Sunil Kothari and Shri Vimal Jain were recorded u/s 132(4) and 131 of the Act respectively. In his statement recorded during/post search action, Shri Vimal Jain decoded the abbreviations used in the chats, such as “1 File” equating to “One lakh Rupees” and “100 g 20 Pc”, to denote cash receipts. Likewise, the data extracted from the iPhone of Shri Vishal Kothari also allegedly revealed unaccounted cash transactions.

4. From the said chats and data, the AO noted that M/s Om Metals Infotech Private Limited had a big piece of industrial land at VKIA, Jaipur. The said concern, after developing and dividing the land into twenty plots, had sold around 17 plots and allegedly received consideration in cheque as well as ‘on money’ in the form of cash. The assessee company had purchased two of these plots (Plot No. SP-818-(II)-9 & 10) admeasuring a total area of 9016.32 Sq. Mtrs. vide registered sale deeds dated 26.12.2018 for a total recorded consideration of Rs. 4.50 Crores, meaning thereby the registered purchase rate was roughly Rs. 5,000/- per Sq. Mtr. The AO, further observed that M/s Steel Syndicate was a proprietary concern of Shri Yogendra Khandelwal, who was one of the directors of the assessee company, and therefore he concluded that Shri Yogendra Khandelwal had given cash to M/s Om Metals Infotech Pvt. Ltd. in respect of purchase of plot Nos. SP-818-II-9 and 10 in the name of the assessee company. The assessed contended that WhatsApp chat/images did not pertain to it. The AO, however, observed that in the chat/messages between Vishal Kothari and Vimal Jain, it was mentioned, “Resp sir 25 file recd Plot 9”, which clearly implied that cash of Rs. 25,00,000/- was received against the sale of plot No. 9. Similar chats, such as, “100 file recd from steel syndicate” also confirmed that cash of Rs. 1,00,00,000/- had been received from M/s Steel Syndicate, proprietorship concern of Shri Yogendra Khendelwal. On the basis of these fragmented chats, the AO concluded that Om Kothari Group had received cash amounting to Rs. 18,29,00,000/- against the sale of plot Nos. 9 and 10 in the name of the assessee. He tabulated various entries from the WhatsApp chats and held that Om Kothari Group had received cash amounting to Rs. 18,29,00,000/- against sale of plot Nos. SP-818-11-9 and 10, having total area of 9016.32 sq. mtrs., from M/s Advance Strips Pvt. Ltd. through M/s Steel Syndicate.

5. However, the Assessing Officer did not stop at the figure of Rs. 18.29 crores allegedly appearing from the WhatsApp chats. He further proceeded to estimate the total actual purchase consideration of the plots by applying an average rate method. He observed that the seller company had been regularly taking cash against sale of plots in VKI Area, that rates of sale of some plots were found noted in the seized records, and that the per square meter rate of plots in VKI Area was much higher than the rate shown in the sale deeds. On the basis of other rates noted in the seized digital material, he worked out the average rate of the plots in VKI Area at Rs. 29,922/- per sq. mtr. and rounded it off to Rs. 30,000/- per sq. mtr. Applying the said rate to the area of 9016.32 sq. mtrs., he worked out the total actual purchase consideration of the assessee’s plots at Rs. 27,04,89,600/-. Since the assessee had shown only Rs. 4,50,00,000/- in the sale deeds, he treated the differential amount of Rs. 22,54,89,600/- as unaccounted cash paid by the assessee.

6. The assessee denied the payment of any cash and also challenged the contents of the WhatsApp chats. The assessee objected to the determination of the average rate of Rs. 30,000/- per Sq. Mtr, contending that the Registry was executed at the prevailing market rate at that time, whereas the rate taken by the AO pertained to the prevailing market rate at the time of search on 13.07.2020. The AO, however, concluded that the average rate of Rs. 30,000/- per sq. mtrs. was calculated on the basis of material found during the search action on Om Kothari Group.

7. The assessee explicitly requested the opportunity to cross-examine of the persons, whose statements and decoded chats formed the sole basis of the addition. The AO, however, rejected the request for cross-examination, holding that the evidences on record were sufficient to prove that unaccounted transactions were entered into by the assessee with the Om Kothari Group. The AO ,accordingly, made the impugned addition of Rs. 22,54,89,600/- under section 69 of the Act and held the same taxable under section 115BBE.

8. Being aggrieved by the said order of the AO, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) called for a remand report from the AO regarding the discrepancies in the computation of the WhatsApp chat amounts. In the remand report dated 31.07.2025, the AO accepted that there were double counting and errors, and that the correct amount received from M/s Steel Syndicate worked out to Rs. 14,79,00,000/- and not Rs. 18,29,00,000/-. The Ld. CIT(A) further noted that the Department had already completed the assessment of the seller, M/s Om Metals Infotech Pvt. Ltd. In the seller’s case, the AO had computed the total on-money receipt of Rs. 14.79 Crores in respect of Plot Nos. 9 to 14 booked through M/s Steel Syndicate, which had a combined total area of 14014.82 Sq. Mtrs. Out of these, Plot Nos. 9 to 12 measuring 11516.32 Sq. Mtrs. were sold during AY 2019-20. The proportionate ‘on money’ component in the hands of the seller for this area was worked out at Rs. 12,15,33,044/-. Relying on the assessment of the seller, the Ld. CIT(A) held that the addition on account of on-money in the hands of the purchaser cannot be more than the on-money considered in the hands of the seller. The Ld. CIT(A) adopted a proportionate area method for the assessee’s Plot Nos. 9 & 10 (9016.32 Sq. Mtrs.) out of the 11516.32 Sq. Mtrs. sold that year, and mathematically worked out the ‘on-money’ component at Rs. 9,51,50,257/- [(12,15,33,044 / 11516.32) x 9016.32]. The Ld. CIT(A) thus restricted the addition to Rs. 9,51,50,257/- and granted relief of Rs. 12,03,39,343/-.

9. Being aggrieved by the said order of the Ld. CIT(A), both the assessee and the Revenue have come in appeal before us. The Revenue, in its cross-appeal, has challenged the relief granted by the Ld. CIT(A) in restricting the addition to Rs. 9,51,50,257/- as against made by the AO on the basis of the average rate per sq. meter derived by the him from the seized documents.

10. First we take up the Assessee’s Appeal.

11. The Assessee in its appeal has challenged the impugned order on two broad fronts, firstly, challenging the assumption of jurisdiction by the Assessing Officer (AO) u/s 153C of the Act as being void ab-initio, illegal, without recording proper satisfaction, and barred by limitation; and secondly, on the merits of the addition of Rs. 9,51,50,257/- sustained by the Ld. CIT(A) u/s 69 of the Act out of the total addition of Rs. 22,54,89,600/- made by the AO on account of alleged on-money payment on purchase of plots.

Adjudication On Jurisdictional And Legal Grounds.

A. Invalidity of a Single, Consolidated Satisfaction Note:

12. The Ld. AR of the assessee has submitted that in this case, the AO has recorded only one single, consolidated Satisfaction Note dated 15.03.2023 u/s 153C of the Act, covering all the assessment years from AY 2015-16 to 2021-22. He has further submitted that the legislative scheme of Section 153C of the Act mandates that the AO must apply his mind independently for each assessment year and record a specific finding that the seized material has a bearing on the determination of the total income for that specific year. It was argued that a consolidated satisfaction note vitiates the entire assessment proceedings.

13. We have considered the rival contentions of the Ld. Representatives of the parties on this issue. We, however, are not convinced with the above arguments of the Ld. Counsel for the assessee. The relevant part of the provisions of Section 153C of the Act, for the sake of ready reference, is reproduced as under:

” 153C (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,—(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or(b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to,a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of accounts or documents or assessed seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted…”

14. Further, the relevant part of the provisions of Section 153A of the Act is reproduced as under:

“153A (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132… the Assessing Officer shall—(a) issue notice to such person requiring him to furnish within such period… the return of income in respect of each assessment year falling within six assessment years… (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted…”

15. A perusal of the above reproduced provisions of Section 153C of the Act read with the provisions of Section 153A of the Act would reveal that in case of a search action u/s 132 of the Act, the AO is mandatorily required to open/reopen and assess/reassess the income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted. Therefore, the contention that the AO must record satisfaction regarding the existence of incriminating material specifically and independently for each year within the block of six years is not mandated under the relevant statutory provisions. Therefore, there is no merit in this legal ground raised by the Ld. AR, and the same is decided against the assessee. Reliance, in this respect is also placed on the recent decision of the Coordinate Bench of this Tribunal in the case of “Anand Jhalani vs. DCIT” (ITA Nos. 1231 to 1234/JPR/2025) vide order dated 08.06.2026.

B. Defect in the satisfaction note for not recording that the seized material had a bearing on the determination of total income:

16. The Ld. AR for the assessee has further contended that even otherwise the satisfaction note recorded by the AO is invalid in the eyes of law for the reason that the AO has nowhere recorded the statutory satisfaction as envisaged under section 153C (1) of the Act that the books of account or documents seized have a bearing on the determination of the total income of the assessee for the year under consideration. It has been pointed out that, as per the assessee, the AO in the concluding para 5 of the satisfaction note has merely stated that the case of the assessee is required to be selected for detailed scrutiny to ascertain the tax liability of the transactions appearing in the seized material. According to the Ld. AR, such a satisfaction is only a tentative or exploratory satisfaction for inquiry and is not the jurisdictional satisfaction contemplated under section 153C of the Act.

17. We have considered the rival submissions on this issue and have gone through the statutory requirement contained in section 153C(1) of the Act. The section provides that where the Assessing Officer of the searched person is satisfied that, the assets, books or documents seized or requisitioned, belongs or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person. Thereafter, the AO of the other person shall proceed under section 153C, only if, he is satisfied that the seized books of account or documents or information contained therein have a bearing on the determination of the total income of such other person. The satisfaction contemplated by the statute is thus not a mere reason to verify, investigate, or scrutinize, but a jurisdictional satisfaction that the seized material bears upon the determination of total income. At the same time, one has also to see the satisfaction note as a whole and not by reading one line in isolation. If on cumulative reading of the entire note, the AO has clearly identified the seized material, linked the same to the assessee, and recorded in substance that the material pertains to the assessee and has nexus with determination of its undisclosed income, then a mere variation in phraseology may not by itself invalidate the proceedings. A perusal of the satisfaction note placed at page 149 to 153 of the paper book, reveals that the said satisfaction note is of the AO of the searched person. The same is a detailed satisfaction note duly mentioning the details of the seized material and further observing that the information contained in the seized material showed that the assessee had paid unaccounted money (on money) for the purchase of the plots. The said satisfaction note speaks more than that was required to be noted by the AO of the searched person. There is no copy of satisfaction note of the ‘AO of the Assessee’ placed on the file. There is no merit in this Ground, hence the same is hereby dismissed.

C. Limitation / Assumption of Jurisdiction under section 153C(3) of the Act:

18. The Ld. AR has raised another jurisdictional/legal ground regarding the sunset clause. It has been pointed out that the satisfaction note by the AO of the searched person was drawn on 10.03.2023 and after receiving the documents from the AO of the searched person, the satisfaction note was drawn by the AO of the assessee on 15.03.2023. Thus, the deemed date of search in the case of the assessee is 15.03.2023, which is after 01.04.2021 therefore the sunset clause as provided u/s 153C(3) would be attracted. He, therefore, has submitted that the invocation of jurisdiction u/s 153C of the Act after 01.04.2021 was bad in law.

19. We have considered the rival contentions. The first proviso to Section 153C(1) of the Act reads as under:

…Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person.”

20. Section 153C (3) of the Act explicitly introduces a strict sunset clause, which reads as under:

“(3) Nothing contained in this section shall apply in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or after the 1st day of April, 2021.”

21. We find immense force in this contention of the Ld. AR. As per the first proviso to Section 153C(1) of the Act, the reference to the date of initiation of the search under section 132 in case of the person other than the searched person shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer of that other person. The Hon’ble Supreme Court in the case of CIT vs. Jasjit Singh (458 ITR 437), has held that the period for which a person other than the searched person is required to file returns under Section 153C commences only from the date the seized materials are forwarded to his AO and not from the date when the search and seizure proceedings were conducted on the searched person. The Hon’ble Madras High Court in Harigovind G. Ravindran (HUF) vs. ACIT (485 ITR 509) extensively clarified that for the “other person”, the effective date of search initiation is the date the seized material is handed over. Since 15.03.2023 falls well after the cut-off date of 01.04.2021, the entire mechanism of Section 153C is extinguished and barred by the strict sunset clause of Section 153C(3). The invocation of Section 153C thus would be void ab initio by operation of law. The issue also came for consideration before the Hon’ble Delhi High Court in the case of “ATS Township Pvt Ltd v. ACIT” (Supra). The Hon’ble Delhi High Court addressed situations where the search (or the handover acting as the deemed search) occurred after the 31.03.2021 i.e. after the sunset clause of Section 153C. The Revenue tried to argue that since 153C was no longer applicable, they should revert to the date of the actual search to save the limitation, however, the Hon’ble High Court rejected the said contention, observing as under:

“While in the case of a search initiated after 31 March 2021 there would be no actual hand over of material to the jurisdictional AO, that does not convince us to revert to section 153A and hold that the block period is liable to be computed from the date of search. That, in our considered opinion, would amount to rewriting section 153C which would clearly be impermissible.” (Para 14)

22. When this legal fiction is applied to the present facts, the date of initiation of the search for the assessee is the date on which the AO received the seized documents, which is 15.03.2023. Since this date squarely falls after the statutory cut-off of 01.04.2021 provided in Section 153C(3) of the Act, the AO fundamentally lacked jurisdiction to proceed against the assessee under Section 153C. Reliance, in this respect, is also placed on the decision of the CO-Ordinate Jaipur Bench of this Tribunal in the case of “Anand Jhalani vs. DCIT” (ITA Nos. 1231 to 1234/JPR/2025) vide order dated 08.06.2026. Thus, the assessment order passed u/s 153C of the Act is procedurally fatal, time-barred, devoid of jurisdiction, and is hereby quashed.

Adjudication On Merits:

23. Even on factual merits, the additions made by the lower authorities cannot be sustained. The entire addition rests upon uncorroborated, third-party WhatsApp chats, digital images exchanged between Shri Vishal Kothari and Shri Vimal Jain. None of these individuals are directors, employees, or authorized representatives of the assessee company. The Ld. AR, in this respect, has submitted that the what App chat exchanged between third parties hold zero probative value against the assessee in the absence of independent, corroborative material. He has submitted that the WhatsApp chats relied upon by the AO are nothing but “dumb documents”. They do not contain the name of the assessee company (“M/s Advance Strips Pvt. Ltd.”), nor do they bear any signature of the buyer, nor do they clearly bifurcate any negotiated deal into a “cash component” and a “cheque component” with verifiable dates. The Ld. AR rightly relied upon the decisions in RRJ Securities Ltd. (380 ITR 612 Del) and Sinhgad Technical Education Society (397 ITR 344 SC), which firmly establish that uncorroborated “dumb” documents, loose sheets, and electronic extracts hold no evidentiary value unless backed by independent material establishing a direct nexus with the assessee. Further, no satisfaction was recorded regarding the integrity of the electronic records as per Section 65B of the Evidence Act, as elucidated by the Hon’ble Supreme Court in Anvar P.V. v. P.K. Basheer. Though, the assessment proceedings under the Income-tax Act are summarily in nature and strict rules of Evidence Act are not applicable, however, in the peculiar facts and circumstances of this case, in the absence of any corroborative material, denial of opportunity to rebut such third party evidence and denial of opportunity of cross examination, the applications of these laws of evidence, in our view, will be attracted. The mention of “Steel Syndicate” (a proprietorship of a director) cannot automatically leads to any presumption that any unaccounted (on money) has been paid on behalf of the assessee. The company and its directors are distinct legal entities. There is no evidence available on record to allege that the assessee company utilized its funds to make any cash payment on the purchase of plots. We fmd force in the above submissions of the Ld. AR of the Assessee.

24. Furthermore, the AO has completely failed to establish any trail of cash movement either from the possession of the assessee or to the seller. No evidence of unaccounted investments, unexplained expenditure, or day-to-day cash ledgers belonging to the assessee has been found. As held by the coordinate bench in the case of SKZ Developers LLP vs. DCIT (ITA No. 1677/Ahd/2024 vide order dated 09.01.2026), treating loose digital sheets and WhatsApp chats as conclusive proof of actual transaction value without any supporting, corroborating, or legally admissible evidence is legally unsustainable. The AO proceeded purely on assumptions, conjectures, and surmises, calculating an arbitrary average rate of Rs. 30,000/- per sq. mtr. without acknowledging that real estate prices are dependent on numerous factors, such as the timing of the agreement, floor height, view, vastu preferences, booking timing, financial capacity of the buyer, relationship, bulk booking, broker involvement, payment schedule and market conditions prevalent at that time.

25. We also note a severe violation of natural justice in this case. The assessee explicitly requested to cross-examine the persons, whose statement and WhatsApp decodings formed the bedrock of the Revenue’s case. The AO summarily denied this request. As held by the Hon’ble Supreme Court in Andaman Timber Industries vs. CCE (127 DTR 0241), not allowing the assessee to cross-examine witnesses whose statements are made the primary basis of the assessment is a fatal flaw rendering the order a nullity, as it amounts to a violation of the principles of natural justice. Similarly, the Hon’ble Jurisdictional Gujarat High Court in the case of Heirs and Legal Representatives of Shri Laxmanbhai S Patel vs. CIT (327 ITR 290) and the Hon’ble Supreme Court in Kishinchand Chellaram (1981 SCC (1) 720) have categorically held that where the Income-tax authorities solely rely upon a statement of a third party, they are bound to give the assessee an opportunity to cross-examine him.

26. Regarding the Ld. CIT(A)’s approach of sustaining the addition on a proportionate basis (Rs. 9.51 Crores) relying entirely on the assessment order of the seller (M/s Om Metals Infotech Pvt. Ltd.), we find inherent fallacy in this methodology. As held by the Hon’ble Gujarat High Court in the case of Kaushik Nanubhai Majithia (Tax Appeal No. 20 of 2024, order dated 06.03.2024), there is no basis for conducting proceedings against the purchaser-assessee merely for the fact that the developer/seller had paid tax or was assessed on the amounts shown in the excel-sheet or digital data. There is no adjudication with regard to the payment being actually made by the assessee to the developer. If the Department wants to assert that the assessee paid the cash, the burden lies on the Department to prove it with corroborative material. A finding in the hands of the seller, based on third-party documents, does not automatically bind the purchaser in the absence of independent verification. The Hon’ble Gujarat High Court in Krishna Textiles vs. CIT (310 ITR 227) and ITO Vs. Bharat A Mehta (60 taxmann.com 31) has held that an assessee cannot be called upon to explain the source of income even if credited by a third party, if the assessee claims that no such amount was invested in the absence of any corroborative evidence of such exchange. As observed by the coordinate bench in GSG Abode LLP vs. DCIT (IT(SS)A No. 21/Ahd/2024), in the absence of any reliable evidence that any cash had exchanged hands over and above the sale consideration mentioned in the deed, an addition cannot be sustained either in the hands of the seller or the purchaser. Even, it is undisputed that the assessee had furnished a Memorandum of Understanding (MOU) dated 15.11.2017 between Shri Yogendra Khandelwal and Om Metal Infotech Pvt. Ltd. This MOU clearly stipulated that, to settle an ongoing dispute regarding the land (which was under a stay due to a writ petition), the land would be allotted at a consideration of Rs. 5,000/- per sq. mtr. The lower authorities neither discussed these crucial facts nor controverted this MOU, proceeding instead to blindly extrapolate on-money.

27. In view of the above detailed and exhaustive discussion, it comes out that the additions made by the AO and partially sustained by the Ld. CIT(A) are based purely on conjectures, surmises, uncorroborated third-party digital data, and without affording the right of cross-examination. Therefore, in the absence of any reliable evidence that any cash had actually exchanged hands over and above the sale consideration mentioned in the registered sale deed, such an addition is not sustainable in law. The addition of Rs. 9,51,50,257/- confirmed by the Ld. CIT(A) is hereby directed to be deleted.

Revenue’s Appeal ITA No.1742/JPR/2025

28. Since we have deleted the entire addition on merits as well as quashed the assessment proceedings on the legal ground of limitation u/s 153C(3), the appeal of the Revenue challenging the relief granted by the Ld. CIT(A), becomes infructuous and is dismissed accordingly.

29. In the result, the appeal of the Assessee in ITA No. 1422/JPR/2025 is allowed, and the appeal of the Revenue in ITA No. 1742/JPR/2025 is dismissed.

Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 15/06/2026.