Kulsum Aaqib Memon Vs DCIT (ITAT Mumbai)
ITAT Mumbai: Cash Addition u/s 69 Based Solely on Third-Party Excel Sheet Set Aside
The Mumbai ITAT (E Bench) allowed the assessee’s appeal for AY 2021-22 and deleted the addition of ₹5,00,000 made under section 69, which was alleged as unexplained cash payment for purchase of a shop. The addition arose from search proceedings in the Rubberwala Group and was based entirely on third-party statements and an Excel sheet recovered during the search.
The Tribunal noted that:
- The assessee did not purchase any property during AY 2021-22; the shops were purchased only in AY 2022-23, through banking channels, for ₹21.17 lakh.
- The seller (Rubberwala Housing & Infrastructure Ltd.) categorically denied receipt of any cash from the assessee and also denied giving any inculpatory statement against her.
- The Revenue relied only on third-party statements/records, without providing copies of statements or granting cross-examination, amounting to a breach of natural justice.
- There was no independent or corroborative evidence linking the assessee to any cash transaction.
- The issue was squarely covered by a coordinate bench decision, where additions based solely on third-party material without cross-examination were held unsustainable.
Holding the addition to be arbitrary and legally unsustainable, the ITAT set aside the CIT(A)’s order and allowed the assessee’s appeal, leaving legal grounds open as academic.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
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