Durgsingh Gajaram Purohit Vs DCIT (ITAT Mumbai)
ITAT Mumbai: On-Money Addition Based on Third-Party Evidence Excel Sheets Deleted-No Corroboration, No Cross-Examination
The Mumbai ITAT deleted additions made under Section 69 towards alleged “on-money” payments in property transactions, holding that additions cannot be sustained solely on third-party statements, unsigned Excel sheets, and uncorroborated search material.
The Tribunal observed that the entire addition was based on materials recovered during search on a third party (Rubberwala Group), including an Excel sheet and statements of employees and promoters. However, no incriminating material directly linked to the assessee such as cash receipts, vouchers, or signed documents was found.
It was further held that denial of cross-examination of persons whose statements were relied upon amounts to violation of principles of natural justice, rendering the addition unsustainable.
The ITAT also noted that the assessee had purchased the property at a value higher than stamp duty valuation, and the AO failed to bring any comparable evidence to support alleged cash payments.
Relying on multiple judicial precedents, including High Court rulings, the Tribunal concluded that mere suspicion, third-party admission, or unverified digital data cannot replace concrete evidence.
Accordingly, the Tribunal deleted the additions across all appeals, reinforcing that on-money allegations must be backed by direct, corroborative evidence and proper opportunity of cross-examination.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
