Hariram Jagaji Chaudhari Vs DCIT (ITAT Mumbai)
The present appeals concern multiple assessment years arising from a common order passed by the Commissioner (Appeals), involving additions made on account of alleged unaccounted cash payments (“on-money”) in relation to purchase of a shop in a commercial project.
The background of the case lies in a search and seizure operation conducted under Section 132 in the case of a real estate developer group and its key personnel. During the search, digital material in the form of an Excel sheet was found from a key employee responsible for handling sales and registrations in a commercial complex project. The employee, in his statement, stated that sale consideration for shops included both accounted (cheque) and unaccounted (cash) components, with the quantum of cash being determined by the developer’s management.
Based on this material, information was shared with jurisdictional Assessing Officers of various purchasers, including the assessee. The department alleged that the assessee had purchased a shop in the project and made unaccounted cash payments aggregating to ₹17,50,700 across different assessment years. The year-wise alleged cash payments were identified based on entries in the seized Excel sheet.
The assessee, however, categorically denied making any such cash payments. Despite this denial, the Assessing Officer made additions in each relevant assessment year solely relying on:
- Entries in the Excel sheet recovered from a third party, and
- The statement of the key employee explaining those entries.
Before the Tribunal, the assessee argued that similar additions in cases of other purchasers in the same project had already been deleted by various benches of the Tribunal. It was contended that the additions were unsustainable as they were based entirely on third-party material without independent corroboration.
