DCIT Vs Gnanaguru Lavanya (ITAT Chennai)
ITAT Chennai Deletes On-Money Addition u/s 69A; Third-Party Loose Sheets Retracted Statement Held Insufficient
The Chennai Bench of the ITAT dismissed the Revenue’s appeals and upheld the CIT(A)’s deletion of additions made u/s 69A r.w.s. 115BBE for AY 2020-21, relating to alleged “on-money” receipts from sale of land. The Tribunal held that the additions were based solely on uncorroborated loose sheets and notepads seized from a third-party premises, which neither bore the assessee’s handwriting/signature nor established payer, payee, nature, or timing of transactions. The alleged broker’s initial statements were retracted, the author of the documents was not examined, and the buyer categorically denied any on-money. No independent evidence—such as bank trail, confirmations, valuation exercise, or proof of actual cash flow—was brought on record. The seized papers were therefore treated as “dumb documents” lacking evidentiary value. Applying settled law (including Sant Lal, Common Cause, K.P. Varghese), the Tribunal held that suspicion or preponderance of probabilities cannot substitute proof, and affirmed deletion of the additions in both assessees’ cases.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
These appeals of the Revenue are directed against separate orders dated 31.12.2024 passed by the Learned Commissioner of Income Tax (Appeals)-19, Chennai (hereinafter referred to as “the Ld.CIT(A)”), arising out of separate assessment orders dated 24.03.2023 passed by the Deputy Commissioner of Income Tax, Central Circle-2(4), Chennai (hereinafter referred to as “the AO”), pertaining to the Assessment Year 2020-21.
