Chetan Mafatlal Chopra Vs DCIT (ITAT Mumbai)
Alleged Cash “On-Money” Addition Deleted – Third-Party Pen Drive & Statements Without Cross-Examination or Direct Evidence Held Insufficient – ITAT Mumbai
he assessee challenged additions made u/s 153C alleging payment of cash component over and above registered consideration for purchase of a shop in Platinum Mall. The addition was based on search proceedings on the Rubberwala Group where a pen drive, excel sheets and statements of a third-party employee indicated receipt of cash in property transactions. The AO treated ₹12,04,325 as undisclosed investment relying mainly on these materials, which was sustained by CIT(A)
The ITAT observed that no incriminating material directly linked to the assessee — such as receipts, vouchers, signed documents or cash trail — was found during search. The addition was made only on the basis of third-party statements and digital data, without granting opportunity for cross-examination and without independent corroborative evidence. The Tribunal further noted that the property was purchased at a value higher than stamp duty valuation and no comparable cases were brought on record to justify alleged cash payment.
Relying on several coordinate bench decisions and principles of natural justice, ITAT held that additions cannot be sustained merely on pen drive entries or statements of third parties without confrontation or corroboration. Accordingly, the alleged “on-money” addition was deleted and both appeals of the assessee were allowed.
