IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JM AND SHRI ARUN KHODPIA, AM ITA No. 3759/Mum/2024 (Assessment Year: 2018-19)

Deputy Commissioner of Income MGN Agro Properties Private Tax, Mumbai Limited

4^th Floor, Welspun House, Senapati Vs.

Bapat Marg, Lower Parel, Delisle Road, S.O. Mumbai – 400013.

PAN/GIR No. AAGCA6127M (Appellant) : (Respondent Assessee by : Shri Harsh Kapadia a/w. Shri Ajay Nagpal Respondent by : Shri Umashankar Prasad, (CIT DR)

Date of Hearing : 01.09.2025 Date of Pronouncement : 03.09.2025

O R D E R

Per Arun Khodpia, AM:

The captioned appeal filed by the revenue is directed against the order of Commissioner of Income Tax (Appeals), CIT(A) 51, Mumbai, (in short ‘ld. CIT(A)’), passed u/s.250 of the Income Tax Act, 1961 (in short ‘the Act'), dated 29.05.2024, for the Assessment Year (in short ‘A.Y.’) 2018-19 which in turn arises from the assessment order u/s. 147 r.w.s. 144 of the Act passed by Deputy Commissioner of Income Tax, Central Circle 3(3), Mumbai, dated 31.03.2023.

2. The grounds of appeal raised by the revenue are extracted as under:

"On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 22,00,00,000/- on account of unexplained money u/s. 69A of the Income Tax Act, 1961 without fully appreciating the facts of the case.”

3. Briefly stated, the facts of the case are that the assessee had e-filed the return of Income for AY 2018-19 on 21.9.2018 declaring total loss at Rs. 7,74,535/-. The said return was processed u/s 143(1) on 15.4.2019. Consequent to a search in the case of the Welspun Group, the assessment was re-opened u/s 147 after recording of reasons for the same. In response to notice u/s 148 dt. 16.03.2022, the assessee filed return of income on 25.04.2022 declaring total income of Rs. (-) 7,74,535/-. Notices u/s 143(2) and 142(1) were issued and served upon the assesssee. Assessment was completed u/s 147 r.w.s. 144 of the Act, dated 31.03.2023, assessing the income at Rs. 21,92,25,465/- by making an addition of Rs. 22,00,00,000/- u/s

69A of the Act.

4. Aggrieved with the aforesaid addition assessee preferred an appeal before the first appellate authority, wherein the appeal of assessee has been allowed on merits, with the following observations:

“10. Ground No. 4 pertains to the addition of Rs. 22,00,00,000/- made by the AO on account of unexplained money u/s. 69A of the Act in respect of alleged cash received by the appellant during the previous year in lieu of an upcoming land sale transaction.

10.1 In the course of assessment proceedings, the AO observed that in view of the statement of Mr. L.T. Hotwani, a key person of the Welspun Group, and findings of the search it was revealed that Welspun Group and Alok Industries were having a joint venture partnership in Alspun Infrastructure Ltd (now known as MGN Agro Properties Pvt Ltd). A land situated at Vapi was supposed to be sold and on sale of this land both the groups were to receive cash of Rs. 50 Crores. The AO found that out of the same, a sum of Rs. 22 Crores had been received by the assessee till the date of search as stated by Shri Lalchand Hotwani in reply to Q. No. 17 of his statement and treating the same as unexplained money u/s. 69A, the AO added the said amount u/s 69A of the Act.

10.2 The appellant on the other hand has argued that the assessee had neither sold the land at Vapi nor received any advance or consideration during the previous year in respect of the purported negotiations for the transfer or sale of such land. The land appeared in the Balance Sheet as on 31.03.2018 as a fixed asset. Also, inspite of a search having been conducted, no document or any other evidence was found indicating sale of land or suggesting receipt of any such advance or amount against sale of such land at Vapi. According to the appellant, the AO could neither point out the name of the person from whom such cash was received nor could the date of any such receipt of cash b