Amit Jatia & Smita Jatia Vs ACIT (ITAT Mumbai)
Third-Party Statement Not Enough- Assessee Need Not Prove a Negative – No Incriminating Material, No Cash Payment—Tribunal Quashes Jewellery Additions
In both appeals arising from search on Jatia Group, AO made additions alleging cash payments for jewellery purchased from Firestar International Pvt Ltd, based solely on the statement of a Firestar employee, Saurabh Shah, & an excel sheet recovered in Firestar’s search. In Amit Jatia’s case, AO treated Rs.28,80,000 as cash paid over & above cheque payment recorded in the bill. In Smita Jatia’s case, AO treated Rs.8,62,500 as unexplained cash, again relying on the same third-party statement.
Tribunal observed that in the search on Assessee, no incriminating material was found indicating any cash payment. Smita Jatia had produced the original invoices & categorically denied any cash payment in her statement u/s 132(4). For the bangles found during Smita’s search, valuation discrepancy was explained with registered valuer’s reports showing invoice value & valuation nearly matched. Tribunal held that AO cannot make additions merely on third-party statements without any corroboration, particularly when Assessee denies cash payment. Tribunal relied on its earlier decisions in Avinash Nivrutti Bhosale & Rekha Ganesh, where identical additions based on Firestar employee statements were deleted.
