S. 69A : Unexplained money – Rough diary notings – Internal circulation of funds –Statement in the Course of search – Statement retracted – Addition unsustainable.[S. 132, 132(4), 132(4A) ]
The Assessing Officer treated a diary entry of ₹ 2.50 lakh as unexplained money under section 69A. The Tribunal found that the entry represented internal circulation of cash within the group and not an independent receipt by the assessee. As no corroborative evidence or verification of the alleged parties was made, the addition was purely on conjecture. Following PCIT v. Umesh Ishrani [(2019) 108 taxmann.com 437 (Bom)(HC), and Harish Textile Engineers Ltd v. DCIT [(2015) 63 taxmann.com 66 (Bom(HC) it was held that suspicion, however strong, cannot replace proof. The addition was accordingly deleted. (ITA Nos. 3012–3013 & 3222–3228/Mum/2025 dt. 17-10-2025) (AY. 2014-15 to 2022-23)
Estate Investment Co. Pvt. Ltd. v. DCIT (Mum)(Trib) www.itatonline.org
[Coram : Hon’ble Shri Amit Shukla, JM & Hon’ble Shri Arun Khodpia, AM]