Jalaram Tararam Purohit Vs ACIT (ITAT Mumbai)
Addition u/s 69 for Alleged On-Money Deleted – Third Party Statements & Pen-Drive Data Without Cross Examination Not Valid Evidence – ITAT Mumbai
AO made addition u/s 69 alleging cash “on-money” payment for shop purchase based on statements of builder group employees and excel/pen-drive data found during search in third party premises. Assessee denied any cash payment and contended that entire consideration was paid by cheque as per agreement. CIT(A) confirmed addition.
ITAT held that addition cannot be sustained merely on third-party statements or electronic data recovered from another person without independent corroboration and without granting cross-examination. Tribunal observed that failure to provide adverse material and cross-examination violates principles of natural justice, relying on Andaman Timber Industries and various coordinate bench decisions in identical Rubberwala group cases. As no direct evidence proved on-money payment and assessee’s name was not conclusively established in seized material, addition u/s 69 was deleted for all years. Assessee appeals allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeals has been filed by the assessee challenging the different impugned order 09.08.2025 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the Office of the Commissioner of Income Tax, Appeal, CIT (A) 52, Mumbai for the assessment year 2017-18, 2018-19 & 2019-20.
