Ketkiben Samirbhai Jani Vs ITO (ITAT Rajkot)
ITAT Rajkot Trims ‘On-Money’ Addition – Only 8% Profit Element Taxable Instead of Entire Cash Component
A search on Shivalik, Shilp & Sharda Group led to seizure of digital data from brokers Manish Brahmbhatt & Bhaumik Panchal. A Word file “Floris 32.docx” was found showing alleged on-money cash payment of ₹5,06,000 for purchase of units in “Sky City Floris.” Based on this, AO reopened the case u/s 147 & treated ₹1,68,667 (⅓ share) as unexplained cash u/s 69A in the hands of Assessee, Ketkiben Samirbhai Jani, holding it as her share of the unaccounted amount.
Before CIT(A)/NFAC, Assessee contended that-
(i) the document was unsigned & mentioned a different person “Manish Parmar,”
(ii) she neither paid any on-money nor maintained books, &
(iii) the purchase was arranged by her son as social security. CIT(A), however, confirmed the addition, holding that no source was explained & no evidence was filed to rebut the seized material.
Before ITAT, Assessee reiterated that there was no direct evidence of cash payment & that the so-called document lacked probative value. Tribunal agreed that the entire alleged cash payment could not represent income. Considering the smallness of the amount & the fact that the addition was based only on presumption, it held that only the profit element should be taxed.
