The Assessing Officer alleged that the assessee had utilized unaccounted cash receipts (from scrap sales and piling activities) for investment in immovable properties. The AO relied on statements recorded during the search, internal correspondence, and summary sheets seized from the premises. Based on this, a sum of ₹1.03 crore was added under section 69A as unexplained investment. The assessee rebutted this by submitting that,there was no direct evidence of cash investment in any identified immovable property.The documents were unsigned, unauthenticated, and contained projected figures. No immovable property was found to be registered in the name of the assessee or its partners using such unaccounted cash. The issue before the Tribunal was ,whether mere suspicion of investment in immovable properties based on unsigned internal documents and uncorroborated statements is sufficient to invoke section 69A and make an addition for unexplained investment.
The Tribunal held that the addition under section 69A was not sustainable in the absence of cogent and corroborative evidence. The following points were emphasised, No immovable property was found or identified by the Department which could be attributed to the alleged unaccounted income.The AO failed to establish the actual flow of funds from the business into any asset or transaction. The seized documents were not supported by entries in any books of accounts or third-party confirmations. Mere projections, proposals, or internal assessments of fund requirements for property purchases cannot constitute evidence of actual investment. The Tribunal also noted that the income component from the cash receipts (scrap and piling) had already been offered to tax on an estimated basis (8.56%). Therefore, taxing the same amount again as unexplained investment would amount to double addition. The Tribunal held that without tangible evidence of investment, addition under section 69A on account of alleged purchase of immovable property is not justified. Addition deleted. ( ITA Nos. 4147 to 4153 & 4585 to 4593/Mum/2024 dt. 03-07 -2025) ( AY. 2016–17 to 2022–23)