Case Law Details
Anupama Gupta Vs ITO (ITAT Chandigarh)
Addition Based on Multiplying Rs. 8,000 by 100 Quashed Due to Lack of Supporting Material; ITAT Removes Unexplained Investment Addition Because Cash Payment Allegation Was Unsubstantiated; Excel Sheet Found During Search Not Sufficient to Prove Cash Payment; ITAT Holds Suspicion Cannot Replace Evidence in Section 69 Addition Case
The Income Tax Appellate Tribunal (ITAT), Chandigarh, allowed the assessee’s appeal and deleted an addition of Rs. 8,00,000 made under Section 69 of the Income Tax Act on account of alleged cash payment for purchase of a flat from Omaxe Group. The case had been reopened under Section 147 based on information received from the Department’s Insight Portal alleging that the assessee had paid Rs. 8 lakh in cash during FY 2018-19 in addition to payments made through banking channels. The Assessing Officer relied upon statements of employees of Omaxe Group and digital data, including an Excel sheet recovered during a search operation, to conclude that the assessee made unexplained cash payments.
The assessee contended that the entire payment of Rs. 34,33,027 towards the property and development charges had been made through banking channels and no cash payment was made. It was further argued that the addition was based solely on loose sheets and Excel data recovered from a third party and that the Excel sheet merely reflected a figure of Rs. 8,000. According to the assessee, the Assessing Officer arbitrarily multiplied the figure by 100 to treat it as Rs. 8,00,000 without any supporting evidence or verification. The assessee also argued that there was no corroborative material such as receipts, bank statements, or signed documents linking her to any alleged cash payment.
The CIT(A) upheld the addition by applying the “Theory of Human Probabilities” and “Theory of Preponderance of Probabilities,” holding that the surrounding circumstances indicated payment of Rs. 8 lakh in cash over and above the registered value of the property. The CIT(A) observed that the assessee had focused more on legal objections to reopening rather than the factual basis of the addition.
Before the Tribunal, the assessee reiterated that the addition was based entirely on assumptions and unsupported presumptions. The Tribunal examined the assessment order and appellate order and observed that even in the Excel sheet recovered during the search, the figure mentioned was only Rs. 8,000. It noted that the Assessing Officer multiplied this amount by 100 without bringing any material or documentary evidence on record to justify such multiplication. The Tribunal further observed that the CIT(A) accepted this presumption without independent evidence.
The ITAT held that no addition can be sustained merely on suspicion or presumption in the absence of concrete evidence. It found that there was no material available with the Assessing Officer to justify converting the figure of Rs. 8,000 into Rs. 8,00,000. The Tribunal concluded that the addition was based only on suspicion and not supported by evidence. Accordingly, the Tribunal declined to sustain the findings of the CIT(A) and allowed the assessee’s appeal.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
Appeal in this case has been filed by the assessee against the order dated 16.07.2025 passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi
2. Grounds of appeal, as raised by the Assessee are reproduced as under:
1. That the Payment was made Solely Through Banking Channels and no cash paid by appellant for Purchase of Plot- (b) The Appellant has made a total payment of 34,33,027/-for the purchase of the land and development charges. The entire payment was made through the following banking bank channels. (d) There were no cash transactions involved in the purchase of the property, and therefore, the addition of 8,00,000/- on the basis of certain loose sheets and Excel files recovered from the premises of a third party (“Omaxe Group”), is baseless and unsupported by facts OR any relevant documentation.
2. Arbitrary and Baseless Interpretation of Amount in Excel Sheet-
a. The Ld. AO adopted an illogical and unverified assumption that the figure of 8,000/- mentioned in the Excel sheet should be multiplied by 100 to arrive at 8,00,000/-. There is no evidence on record to establish such a methodology nor any verification from the Appellant. Such mathematical manipulation is arbitrary, speculative. speculative, and without application of mind.
b. This is a clear case of addition made without any investigation OR justification in the Appellant’s context and is in violation of principles of natural justice.
c. That the Learned Assessing Officer (AO) has grossly erred, both in fact and in law, in adopting the figure of 8,00,000/- as undisclosed income by multiplying the figure of 8,000/- by 100, purportedly based on a presumed modus operandi of the searched party (M/s Omaxe Group), without any corroborative evidence, rationale, OR lawful basis.
3. Lack of Corroborative Evidence for the Addition-
a. The addition of 8,00,000/- is based solely on an Excel sheet found at the premises of Omaxe Group. There is no other corroborative evidence, such as receipts, bank statements, OR statements from third parties and these excel sheets neither bear the signature of the appellant nor originate from her possession, to support the claim that the Appellant made any such cash payment.
b. In the absence of any concrete evidence, the addition is arbitrary, unjustifiable, and violates the provisions of the Income Tax Act. As per Section 69 of the Act, no adverse inference can be drawn unless there is credible and corroborative evidence of investment OR expenditure.
3. Brief facts of the case, as per order of the CIT(A) are as under:
The case was re-opened u/s. 147 of the Act by issue of notice u/s. 148 dated 31.03.2023 based on the information received from Insight Portal of the Department uploaded by the DDIT/ADIT (Inv.)-2, Chandigarh that the appellant had purchased a flat from M/s Omaxe Group (project M/s Omaxe City, Yamuna Nagar) and paid cash amount of Rs.8,00,000/- during the F.Y. 2018-19 relevant to A.Y. 2019-20.
During the assessment proceedings, the AO issued notice u/s. 148, 143(2), 142(1), show-cause notice to the appellant. In response, the appellant furnished written submission along with documentary evidences and also raised objection against the re-opening of the assessment. The AO perused the details furnished by the appellant. Based on the sworn statements of Shri Sahil Juneja, AGM (IT), M/s Omaxe Limited, Shri Sushant Lambhate, Manager, CRM Department Shri Ravinder Paliwal, employee of M/s Omaxe Group, digital data shared by the DDIT/ADIT (Inv.) and also relied on the various case laws, the AO held that the appellant had paid cash amounting to Rs.8,00,000/-to M/s Omaxe Group in lieu of purchase of flat in addition to the payments made through banking channel etc and hence the same was treated as un-explained investment u/s.69 of the Act and added to the total income of the appellant. The AO completed the assessment u/s. 147 of the Act on 28.03.2024. Aggrieved by the assessment order dated 28.03.2024, the appellant preferred the appeal.
Th4. e only issued involved in this appeal is payment of Rs. 8 lacs allegedly paid by the Assessee to Omaxe Group in cash. On this issue, the Ld. CIT(A) has given his findings in the appellate order as under: –
“5.6. As such, a detailed analysis of the facts brought out on record would reveal the fact that the explanation offered by the assessee and corresponding evidence produced to support the same are not reliable and, therefore, devoid of merits. Thus, the same cannot be considered as admissible evidence in the eye of the law. Under the circumstances, on an objective analysis and appreciation of all the facts and surrounding circumstances of the case, I would like to apply the ‘Theory of Human Probabilities’ and ‘Theory of Preponderance of Probabilities’ in precedence over unreliable and inconsistent direct evidence filed by the assessee. In this regard, reliance is placed on the following decisions of Hon’ble Supreme Court and Delhi High Court wherein it was held that apparent was not real in all the cases and emphasized the importance of the surrounding circumstances and application of the test of ‘Human Probabilities’ to prove that the apparent was not real. e apparent was not real.
In view of the above, after applying the ‘Theory of Human Probabilities & concepts of substance over form’ aided with various case laws mentioned above, I treat the transactions made by the assessee by way of payment of Rs.8,00,000/- in cash over and above the registered value as unexplained investment u/s.69 of the Act. Moreover, the appellant elaborately relied on legal issues of re-opening of the assessment rather than facts of the case on which addition was made. Therefore, the action of the AO is upheld.
5. During proceedings before us, the Ld. Counsel of the Assessee filed written submissions on this issue which is as under: –
Ground No.2: Arbitrary and baseless interpretation of amount in Excel Sheet
a. The Ld. AO adopted an illogical and unverified assumption that the figure of Rs. 8,000/-mentioned in the Excel sheet should be multiplied by 100 to arrive at Rs. Rs. 8,00,000/- There is no evidence on record to establish such a methodology nor any verification from the Appellant. Such mathematical manipulation is arbitrary, speculative, and without application of mind.
b. This is a clear case of addition made without any investigation or justification in the Appellant’s context and is in violation of principles of natural justice.
c. That the Ld. Assessing Officer has grossly erred, both in fact and in law, in adopting the figure of Rs. 8,00,000/- as undisclosed income by multiplying the figure of Rs. 8,000/- by 100, purportedly based on a presumed modus operandi of the searched party (M/s Omaxe Group), without any corroborative evidence, rationale, or lawful basis.
d. That the LD. AO’s assumption that the entries maintained by the third party were deliberately reduced by two digits and therefore need to be multiplied by 100 is wholly conjectural and without application of mind. The appellant submits that such an arbitrary presumption is not supported by any material evidence relating to the appellant and violates the principles of natural justice.
Ground No. 3: Lack of Corroborative Evidence for the Addition
a. The addition of Rs. 8,00,000/- is based solely on an Excel sheet found at the premises of Omaxe Group. There is no other corroborative evidence, such as receipts, bank statements, or statements from third parties and these excel sheets neither bear the signature of the appellant nor originate from her possession, to support the claim that the Appellant made any such cash payment.
b. In the absence of any concrete evidence, the addition is arbitrary, unjustifiable, and violates the provisions of the Income Tax Act. As per Section 69 of the Act, no adverse inference can be drawn unless there is credible and corroborative evidence of investment or expenditure.
6. Per contra, the ld. DR relied on the orders of the authorities below.
7. We have considered the findings given by the Assessing Officer in the assessment order and the Ld. CIT(A) in the appellate order. We find that the findings given by the authorities below are based on an Excel sheet found during the search operation of the Omaxe Group. In fact, even in the Excel sheet, the figure written is only Rs. 8000. The Assessing Officer has multiplied it by 100 and made it Rs. 800000/- as payment in cash. The Ld. CIT(A) has also accepted the findings given by the Assessing Officer. The ld. AR argued that the addition made by the Assessing Officer and sustained by the Ld. CIT(A) are without any concrete evidence against the Assessee. He further argued that it is only the presumption of the Assessing Officer that the figure of Rs. 8000 may be read as Rs. 800000/-and the presumption of the Assessing Officer have been confirmed by the Ld. CIT(A) without any evidence bringing on record. The AR argued that the addition made on presumption should not be sustained.
8. We have considered the findings given by the AO as well as by the Ld. CIT(A). We find that the AO has made the addition just on the basis of an Excel sheet entry of Rs. 8000/- by multiplying it with 100 without bringing on record any concrete evidence for the same. The Ld. CIT(A) has also accepted the presumption of the Assessing Officer and confirmed the addition. We find that there is no document available with the Assessing Officer for prompting him to multiply the figure of Rs. 8000/- by 100 making it Rs. 800000/-. It is just a presumption or suspicion.
9. We are of this considered view that in any matter whatsoever a strong, a suspicion made without brining on record any concrete evidence, no addition can be made / sustained. Therefore, we are not inclined to sustain the findings given by the Ld. CIT(A) on this issue. Assessee’s appeal on this issue is accordingly allowed.
10. In the result, appeal of the Assessee is allowed.
Order pronounced on 8.12.2025.
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