Jayantilal Purohit Vs DCIT (ITAT Mumbai)
Alleged Cash On-Money in Shop Purchases and the Limits of Section 69 Additions: ITAT Mumbai Strikes Down Additions for Want of Proof
The decision of the Mumbai Bench of the Income Tax Appellate Tribunal, Mumbai Bench in Jayantilal Purohit v. Deputy Commissioner of Income Tax, Central Circle–4(2), Mumbai (ITA Nos. 5682, 5683 and 5684/Mum/2025, order dated 30 December 2025) once again reinforces the settled legal position that additions under Section 69 of the Income-tax Act, 1961 cannot be sustained merely on the basis of third-party statements or uncorroborated electronic data recovered during search proceedings conducted in the case of another person. The ruling assumes particular significance in cases involving alleged “on-money” payments in real estate transactions, where Revenue authorities frequently rely upon statements recorded under Section 132(4) and loose electronic records without independent verification.
The assessee, engaged in trading of healthcare products through his proprietary concern, had purchased two shops in the Platinum Mall project developed by Rubberwala Housing and Infrastructure Ltd. Search and seizure proceedings under Section 132 were conducted in the case of the Rubberwala Group, including at the residence of one of its employees, Shri Imran Ansari, who was handling the sale and registration of shops. During the search, a pen drive containing Excel sheets allegedly detailing cash and cheque components of shop sales was seized, and statements were recorded wherein Shri Imran Ansari stated that shop transactions involved a cash component allegedly decided by the directors of the developer.
