S. 69A : Unexplained money-Alleged on-money paid for purchase of flat-Principles of Natural Justice-Addition based solely on statement of builder and uncorroborated Excel sheets seized during search-No incriminating material supplied to assesse-Cross-examination denied -Addition deleted. [S. 132(4), 147, 148, 254(1), Evidence Act, 1872, S. 65B]
The assessee’s assessment was reopened on the basis of information received from the Investigation Wing alleging payment of on-money to the Cosmos Group for the purchase of a flat. The Assessing Officer made an addition under section 69A, relying solely on statements of the promoters of the Cosmos Group and alleged Excel sheets recovered during the search. The assessee consistently denied having paid any on-money, produced the builder’s confirmation acknowledging receipt only of the agreement value, and sought copies of the incriminating material as well as cross-examination of the persons whose statements were relied upon. Neither was the seized material furnished nor was cross-examination allowed. The Tribunal held that a third-party statement, without corroborative evidence and without affording an opportunity of cross-examination, cannot constitute evidence against the assessee. The alleged electronic records were also not proved in accordance with law. Following its earlier decisions in identical Cosmos Group matters, the Tribunal held that the addition was unsustainable and deleted the addition. Since the appeal was allowed on merits, the challenge to the validity of reopening under sections 147/148 was treated as academic. (AY. 2012-13) (ITA No. 7402/Mum/2025, dt. 04-06-2026)
Prakash Bhaguji Katkade v. ITO (Mum.)(Trib.) www.itatonline.org .
[Coram : Hon’ble Shri Makarand Vasant Mahadeokar, AM]