Abhishek Shivaji Gade Vs ITO (ITAT Pune)
Summary: The Income Tax Appellate Tribunal, Pune Bench “SMC”, in Abhishek Shivaji Gade Vs ITO, ITA No. 467/PUN/2026, dated 30 April 2026, for Assessment Year 2023-24, directed deletion of an addition of ₹2,50,000 made under Section 69 of the Income Tax Act, 1961. The assessee, a Group-C employee of the Ministry of Defence, had purchased a flat in Adreno Towers from City Corporation Limited for ₹71,51,120. Following a search under Section 132 in the City Group case, the Assessing Officer alleged that the assessee had made an additional cash payment of ₹2,50,000 towards the property. The addition was based on an Excel sheet and a statement made by a person identified as Mr. Chetan during the search. The assessee consistently denied making any cash payment, explained that the entire purchase consideration had been paid through banking channels, and submitted supporting payment details. The CIT(A), National Faceless Appeal Centre, nevertheless confirmed the addition.
Before the Tribunal, the assessee submitted that the statement relied upon by the Assessing Officer had subsequently been retracted. City Corporation Limited had also issued a letter confirming that no cash had been received from the assessee. The Tribunal observed that the Assessing Officer had acknowledged the retraction in the assessment order itself but had failed to bring any independent or positive evidence establishing the alleged cash payment. It further noted that the origin of the Excel sheet was uncertain, as the Revenue had not established whether it had been prepared by the builder or another person. Despite the assessee’s request, an opportunity to cross-examine the person whose statement was relied upon had not been provided. In these circumstances, the Tribunal found that the alleged cash transaction remained unproved.
The Tribunal also referred to the decision of the Coordinate Bench in Amit Shantaram Bagade, ITA Nos. 832 & 6286/Mum/2026, involving a purchaser of flats from City Group, where an addition made on identical facts had been deleted. Respectfully following that decision and considering the absence of corroborative evidence, the Tribunal held that the Assessing Officer had failed to establish that the assessee made any cash payment. Accordingly, it directed deletion of the entire ₹2,50,000 addition. The decision emphasises the need for positive evidence before treating an alleged property-related cash payment as an unexplained investment, particularly where the underlying third-party statement has been retracted and the alleged recipient has denied receiving cash.
Cases Discussed
- Amit Shantaram Bagade Vs ITO (ITAT Mumbai), ITA Nos. 832 & 6286/Mum/2026 — The Coordinate Bench deleted an addition involving alleged cash payments towards flats purchased from City Group. The Tribunal followed this decision on identical facts while directing deletion of the ₹2,50,000 addition.
FULL TEXT OF THE ORIGINAL JUDGMENT/ORDER
The captioned appeal at the instance of assesse pertaining to A.Y. 2023-24 is directed against the order framed by National Faceless Appeal Centre, Delhi / CIT(A) passed u/s 250 of the Income Tax Act 1961 dated 18.12.2025.
The assessee has raised the following grounds of appeal:
1. The order passed by the Ld. CIT(A)-NFAC, Delhi dated 18.12.2025 is bad in law, contrary to facts and circumstances of the case, and therefore liable to be quashed.
2. The Ld. CIT(A) as well as the Ld. AO erred in confirming the addition of Rs. 2,50,000/- on account of unexplained cash receipts u/s 69 of the Act without appreciating the submissions made by the appellant
3. The Ld. CIT(A) as well as the Ld. AO erred in confirming the addition of Rs.2,50,000/- on account of unexplained cash receipts u/s 69 of the Act without appreciating the following facts:
a. The appellant had categorically denied the cash payment as the entire amount was paid through banking channel.
b. The addition has been done solely on the basis of statement of third parties recorded and an excel sheet seized during the search action u/s 132 of the Act without bringing any independent or corroborative evidence on record and not giving an opportunity for the cross-examination.
c. No effort has been made by the AO to link the alleged entries directly with the appellant through tangible evidence.
d. The retraction letters have been filed by the parties on whose statement the reliance was placed for making the addition. The Ld. AO as well as the Ld. CIT(A) failed to examine the evidentiary value of such statements in light of the retractions and did not carry out any further investigation to substantiate the original statements
e. The appellant had filed declaration from City Corporation Limited where it has been categorically mentioned that no cash has been received from the appellant.
4. The appellant craves leave to add, alter, amend, or withdraw any of the above grounds at or before the time of hearing.
Submission of ld.AR :
2. The ld. Authorised Representative(ld.AR) for the Assessee filed a paper book and submitted that assessee has not made any cash payments for purchase of flats, this fact was explained to ld. the Assessing Officer and ld. CIT(A). Ld. AR submitted that assessee is a Group –C employee in Ministry of Defence, Government of India earning salary income. Ld. AR submitted that assesseee has purchased a flat in Adreno Towers from City Corporation Ltd, the details of payments have been explained during the assessment proceedings and all payments were made through cheque. Ld. AO alleged that assessee had made cash payment of Rs. 2,50,000/- based on the statement of Mr. Chetan recorded during the search in the case of City Group. Ld. AR submitted that Mr. Chetan has retracted his statement during the assessment proceedings in the case of City Corporation. Ld. AR submitted that this fact is recorded in the assessment order of the assessee also. Ld. AR invited our attention to page No. 167 to 168 which is a letter issued by City Corporation letter. Assessee explaining that no cash payments have been made by the assessee the said letters also refers to retraction of statement made during the search. Ld. AR requested for deleting the additions.
Submission of ld.Departmental Representative(ld.DR) :
3. The ld.DR for the Revenue relied on the order of Assessing Officer(AO) and ld.CIT(A)[NFAC].
Findings & Analysis :
4. We have heard both the parties and perused the records. In this case assessee is a salaried employee working with Government of India. During the year assessee has purchased a flat in Adreno Towers for a consideration of Rs. 71,51,120/-. Based on the search in the case of City Group ld. AO asked the assessee to explain the source of payment and asked assessee to explain whether any cash payment has been made. Assessee submitted source of payments. Assessee also denied any cash payment, however ld. AO based on the statement of Mr. Chetan which was recorded during the search in the case of City Group and based on the excel sheet concluded that assessee had paid cash of Rs. 2,50,000/- for purchase of flat. It is observed that the statement recoded during the search were retracted subsequently. This fact is mentioned by the ld. AO in the assessment order itself. It is also observed that the City Corporation Ltd had issued letter to all the buyers explaining the search and admitting that no cash was received. One such letter is at page No. 167 to 168 of the paper book. The ld. AO has not brought on record any specific positive evidence to prove cash of Rs. 2,50,000/-. Ld. AO has relied on excel sheet however the source of the excel sheet is not clear whether the said excel sheet has been prepared by the builder or any one else. It is also noted that opportunity of cross examination asked by assessee was not provided.
5.1 On identical facts by the decision of Coordinate Bench of ITAT in the case of Amit Shantaram Bagade in ITA Nos. 832 & 6286/Mum/2026, who has purchased the flats from City Group has deleted the addition.
5.2 The ld. AO has failed to establish that assessee had made any cash payments. Accordingly, respectfully following the decision of Coordinate Bench of ITAT in the case of Amit Shantaram Bagade (supra), we direct the AO to delete the addition of Rs. 2,50,000/-
Order pronounced on this 30th day of April, 2026.
