DCIT Vs Parth Ajit Pawar (ITAT Mumbai)
ITAT Mumbai Deletes ₹1.69 Cr Addition u/s 69A: Statement without cross-examination not valid evidence
ITAT Mumbai upheld the deletion of a ₹1.69 crore addition made u/s 69A in the case of Parth Ajit Pawar, holding that the sole reliance on a third-party statement, later retracted, without corroborating evidence, cannot justify taxing the amount as unexplained money.
A search was conducted on DB Realty Group & associated entities, including Daund Sugar Pvt. Ltd., where a diary was recovered from one Shri Sagar Shah. The diary had entries indicating unaccounted cash allegedly received from “PP”, interpreted by AO as Parth Pawar. Based on Sagar Shah’s Section 132(4) statement, the AO added ₹1.69 crore as unexplained cash u/s 69A. Assessee denied all allegations, stating he was not associated with Daund Sugar Pvt. Ltd & that the diary was not seized from him. No opportunity for cross-examination had been given.
Before CIT(A), Assessee raised a threefold challenge firstly, that the statement of Shri Sagar Shah was recorded behind his back & without affording any opportunity for cross-examination; secondly, that the diary entries were seized not from the assessee but from a third party, & therefore could not form the basis of an addition; & thirdly, that there was no corroborative material evidencing any cash transaction with the assessee. CIT(A), appreciating the principles of natural justice, directed AO to provide the opportunity of cross-examination, & a remand report was accordingly submitted after re-examining Shri Sagar Shah. CIT(A) deleted the addition.
