Mayuri Hitendra Shah Vs ACIT (ITAT Mumbai)
ITAT Remands On-Money Addition Case Because Cross-Examination Was Denied; Addition Under Section 69 Set Aside Because AO Relied Only on Third-Party Statements; ITAT Orders Fresh Assessment Because Builder’s Statements Were Not Tested Through Cross-Examination; Natural Justice Violated as Cross-Examination Opportunity Was Refused; ITAT Restores Property Transaction Dispute Because Evidence Lacked Independent Verification.
The Income Tax Appellate Tribunal (ITAT) Mumbai allowed the assessee’s appeal for statistical purposes and remanded the matter to the Assessing Officer (AO) for fresh adjudication after granting an opportunity for cross-examination in a case involving alleged on-money payment in a property transaction.
The appeal arose from an order dated 29.09.2025 passed by the Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre in relation to reassessment proceedings under Sections 147 and 144 of the Income Tax Act for AY 2016-17. The assessee had challenged the addition of Rs.1 crore treated as unexplained money under Section 69 of the Act.
According to the facts recorded in the order, the assessee had filed a return declaring income of Rs.6,83,920. Based on information gathered during search and survey proceedings conducted on Bhagwati Developers on 15.10.2018, the department alleged that the assessee purchased a flat for Rs.75 lakh through recorded banking channels and additionally paid Rs.1 crore as “on-money.” The AO concluded that the total investment in the property was Rs.1.75 crore and treated the alleged cash component as unexplained investment under Section 69.
