Shruti Hariom Sharma Vs ACIT (ITAT Pune)
Builder’s Excel Sheet Without Supporting Evidence Cannot Sustain On-Money Addition Under Section 69B
Background of the Case
The assessee, an individual, had filed her original return of income declaring total income of ₹10,87,480.
A search under Section 132 of the Income-tax Act, 1961, was conducted in the case of City Corporation Limited and its group on 15 February 2023. During the search, the Department found an Excel sheet allegedly recording on-money payment of ₹18,56,026 by the assessee towards the purchase of a flat jointly with her husband.
Based on this information, a notice under Section 148 was issued on 28 March 2024. In response, the assessee filed her return on 8 June 2024, declaring total income of ₹10,86,620.
The Assessing Officer subsequently issued statutory notices and called upon the assessee to explain the alleged cash payment.
Assessee Denies Payment; Assessing Officer Makes Addition
The assessee categorically denied making any payment to the builder as alleged by the Department.
However, the Assessing Officer rejected her explanation and completed the reassessment on 28 March 2025, determining total income at ₹29,42,646.
The assessed income included ₹18,56,026 as unexplained investment under Section 69B, with tax applied under Section 115BBE.
The assessee challenged the assessment before the CIT(A)/NFAC. The appellate authority dismissed the appeal in her absence. Before the Tribunal, she contended that valid adjournment requests had been filed through the income-tax portal and that the appellate order had been passed without an effective opportunity of hearing.
Grounds Raised Before the Tribunal
On merits, the assessee argued that the addition rested on third-party documents, Excel sheets, loose papers and statements allegedly found during the builder’s search, without independent corroborative evidence against her.
She submitted that no evidence of actual cash movement or the source of the alleged payment had been brought on record. She also challenged reliance on third-party statements without an opportunity for cross-examination.
The assessee further referred to a possible explanation concerning a discount on a sample flat affected by wear and tear. However, the Tribunal’s ultimate decision rested on the evidentiary deficiencies and earlier decisions involving the same builder.
Earlier Decisions Involving the Same Builder
The assessee relied on the Tribunal’s decisions in Amit Shantaram Bagade v. ITO, Abhishek Shivaji Gade v. ITO and Rajesh Narayanrao Pawar v. DCIT.
These cases also concerned additions for alleged cash payments towards flats purchased from City Corporation Limited.
In Rajesh Narayanrao Pawar, the Tribunal had deleted an addition of ₹15 lakh. It observed that a general reference to documents seized from the builder did not establish that the purchaser had actually paid cash.
Once the purchaser denied the alleged payment, the Assessing Officer had to identify the material establishing it. The assessment order in that case did not specifically refer to documents or statements demonstrating the alleged cash payment.
The Tribunal had also emphasised that copies of seized documents relied upon against an assessee must be supplied to that assessee.
Retracted Statement and Unverified Excel Sheet
The Tribunal also examined Abhishek Shivaji Gade, where an addition of ₹2.50 lakh had been made on the basis of an Excel sheet and a statement recorded during the builder’s search.
In that case, the statement of Mr. Chetan had subsequently been retracted. City Corporation Limited had also issued a letter to buyers stating that no cash had been received.
The Tribunal noted the absence of specific positive evidence proving the alleged cash payment. The source and authorship of the Excel sheet were unclear, and the requested opportunity for cross-examination had not been provided.
Following the earlier decision in Amit Shantaram Bagade, the addition in Abhishek Shivaji Gade had therefore been deleted.
Findings in the Present Case
Applying these precedents, the Tribunal held that the Assessing Officer was required to establish the alleged on-money payment through identifiable supporting documents.
The builder had denied receiving on-money, and the statement relied upon had been retracted during its assessment proceedings. A confirmation letter stating that no cash or on-money had been received had also been issued to buyers.
Crucially, the Tribunal recorded that the documents or evidence forming the basis of the addition had not been supplied to the assessee.
Considering the cumulative facts and the coordinate Bench decisions concerning the same builder, the Tribunal found that the addition could not be sustained.
Decision and Significance
The Tribunal set aside the CIT(A)/NFAC’s order and directed deletion of the entire addition of ₹18,56,026 under Section 69B read with Section 115BBE. The assessee’s appeal was allowed.
The decision underlines that a third-party Excel entry requires examination and supporting evidence before it can establish an actual on-money payment by a purchaser. Reliance on undisclosed documents, coupled with a retracted statement and the builder’s denial of cash receipt, was insufficient on these facts.
The Section 115BBE consequence fell with deletion of the underlying addition; the Tribunal did not separately decide any general challenge to that provision’s tax rate.
List of Cases Discussed:
1. Rajesh Narayanrao Pawar Vs DCIT (ITAT Pune); ITA No. 2041/PUN/2026; 23/07/2026. Followed. The Tribunal had deleted an addition of ₹15,00,000 for alleged cash payment to City Corporation Limited because the assessment order did not identify seized documents or statements proving the payment. It also emphasised the requirement to supply relied-upon documents to the assessee.
2. Abhishek Shivaji Gade Vs ITO (ITAT Pune); ITA No. 467/PUN/2026; 30/04/2026. Followed. An addition of ₹2,50,000 based on an Excel sheet and a subsequently retracted statement was deleted in the absence of positive evidence establishing cash payment. The assessee had also not been given the requested opportunity for cross-examination.
3. Amit Shantaram Bagade Vs ITO (ITAT Mumbai); ITA Nos. 832 and 6286/MUM/2025; 04/03/2026. Followed through the coordinate Bench decisions. The Tribunal had deleted additions concerning alleged on-money payments for flats purchased from the City Corporation group.
FULL TEXT OF THE ORIGINAL ORDER OF ITAT PUNE
This appeal filed by the assessee is directed against the order dated 30.03.2026 passed by Ld. CIT(A)/NFAC for the assessment year 2020-21.
2. The appellant has raised the following grounds of appeal :-
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in passing the impugned appellate order dated 30.03.2026 ex-parte without granting proper and effective opportunity of hearing to the appellant.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) grossly erred in dismissing the appeal despite valid adjournment requests having been duly filed through the Income-tax portal on various dates.
3. On the facts and in the circumstances of the case and in law, the impugned appellate order passed by the Ld. CIT(A) is bad in law, arbitrary, violative of principles of natural justice and liable to be quashed.
4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the addition of Rs. 18,56,026 made under section 69B of the Income-tax Act, 1961 on account of alleged unexplained investment or alleged on-money payment.
5. On the facts and in the circumstances of the case and in law, the learned authorities below erred in making and sustaining the impugned addition merely on the basis of third-party documents, excel sheets, loose papers and statements allegedly found during search proceedings in the case of other persons without bringing any independent corroborative evidence on record against the appellant.
6. On the facts and in the circumstances of the case and in law, the learned authorities below erred in relying upon statements of third parties without providing opportunity of cross-examination to the appellant, thereby rendering the addition illegal and unsustainable in law.
7. On the facts and in the circumstances of the case and in law, the learned authorities below failed to appreciate that the appellant had categorically denied making any cash payment and no evidence of actual cash movement or source of alleged payment was brought on record.
8. On the facts and in the circumstances of the case and in law, the learned authorities below failed to appreciate that the alleged amount represented an odd figure and there existed plausible explanation regarding discounting in value of sample flat having wear and tear.
9. On the facts and in the circumstances of the case and in law, the addition sustained under section 69B is based on assumptions, conjectures and surmises and therefore deserves to be deleted.
10. In the fact and circumstances, the Ld. CIT(A) was not justified in sustaining application of penal rate of tax under Section 115BBE on the addition made u/s 69B.
11. The appellant craves leave to add, amend, alter or withdraw any ground or grounds of appeal at or before the time of hearing.”
3. Facts of the case, in brief, are that the assessee is an individual and has furnished her return of income u/s 139 of the IT Act by declaring income of Rs.10,87,480/-. A search action u/s 132 of the IT Act conducted in the case of City Corporation Limited (CCL) and group on 15.02.2023 wherein incriminating material in the shape of excel sheet was found wherein details of on-money payment of Rs.18,56,026/- by the assessee to the CCL group was entered in connection with purchase of flat, jointly with her husband, therefore, notice u/s 148 of the IT Act was issued to the assessee on 28.03.2024 in response to which the assessee furnished her return of income on 08.06.2024 declaring total income of Rs.10,86,620/-. Subsequently, notices u/s 143(2) and 142(1) respectively and show cause notice were issued to the assessee. The assessee in response denied to have made any payment to the CCL group as alleged by the Assessing Officer. Not being satisfied with the reply and submissions of the assessee, the Assessing Officer vide order dated 28.03.2025 completed the assessment proceedings u/s 147 of the IT Act by determining the income of the assessee at Rs.29,42,646/- as against the income of Rs.10,86,620/- returned by the assessee in response to notice u/s 148 of the IT Act. The above assessed income includes addition of Rs.18,56,026/- being on-money payment u/s 69B r.w.s. 115BBE of the IT Act.
4. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. Since the assessee remained absent, Ld. CIT(A)/NFAC dismissed the appeal.
5. It is the above order against which the assessee is in appeal before this Tribunal.
6. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that Ld. Counsel of the assessee placed reliance on the following coordinate bench decisions wherein the Tribunal under identical facts has deleted the addition made on account of alleged on-money payment made to City Corporation Limited :-
(i) Amit Shantaram Bagade vs. ITO (ITA No.832 & 6286/MUM/2025 order dated 04.03.2026).
(ii) Abhishek Shivaji Gade vs. ITO (ITA No.467/PUN/2026 order dated 30.04.2026).
(iii) Rajesh Narayanrao Pawar vs. DCIT (ITA No.2041/PUN/2026 order dated 23.07.2026).
7. On perusal of above coordinate bench decision passed in the case of Rajesh Narayanrao Pawar (supra), we find that under identical facts, addition of Rs.15,00,000/- was made in the hands of the assessee Rajesh Narayanrao Pawar on the basis of alleged cash payment to M/s City Corporation Limited against purchase of flat jointly with his son. The Tribunal deleted the above addition by observing as under :-
“5. Now, coming to the addition of Rs.15,00,000/- made by the AO in the assessment order. Again this is a classical case of callous attitude of Officers of the Income Tax Department. In the entire assessment order, the AO merely states that certain documents were seized during the search and seizure action u/s 132 of the Act in the case of M/s. City Corporation Limited conducted on 15.02.2023. Nowhere, in the assessment order there is any specific mention of any of the seized documents which established payment of Rs.15,00,000/- by the assessee to M/s. City Corporation Limited. Merely, stating that there were seized documents will not prove that the assessee had made cash payment of Rs.15,00,000/-. The assessee had categorically denied cash payment. The assessee had filed copies of Axis Bank, UCO Bank and HDFC Bank Account and other documents during the assessment proceedings. Once, the assessee had denied cash payment to M/s. City Corporation Limited, the onus was on a AO to establish it by referring to the documents which shows cash payment. However, we have already mentioned in the above paragraphs that in the assessment order the AO has not referred any seized documents or impounded documents. The AO has not referred to any of the statements in the assessment order. Even, otherwise, if the AO was relying on any seized documents, it was mandatory for the AO to provide copies of those documents to the assessee. In the assessment order, we are repeating again that nowhere there is any reference of any seized documents or any other documents wherein alleged cash payment is mentioned.
6. In these facts and circumstances of the case, the addition made by the AO is not based on any documents. Accordingly, we direct the AO to delete the addition of Rs.15,00,000/- made u/s 69 of the Act. Accordingly, ground No. 3 raised by the assessee is allowed.”
8. We also find that in the case of Abhishek Shivaji Gade (supra), who has also purchased flat from City Corporation Limited and addition on the basis of alleged on-money payment was made in his case, however, coordinate bench of this Tribunal deleted the above addition observing as under :-
“2. The ld. Authorised Representative(ld.AR) for the Assessee filed a paper book and submitted that assessee has not made any cash payments for purchase of flats, this fact was explained to ld. the Assessing Officer and ld. CIT(A). Ld. AR submitted that assessee is a Group –C employee in Ministry of Defence, Government of India earning salary income. Ld. AR submitted that assesseee has purchased a flat in Adreno Towers from City Corporation Ltd, the details of payments have been explained during the assessment proceedings and all payments were made through cheque. Ld. AO alleged that assessee had made cash payment of Rs. 2,50,000/- based on the statement of Mr. Chetan recorded during the search in the case of City Group. Ld. AR submitted that Mr. Chetan has retracted his statement during the assessment proceedings in the case of City Corporation. Ld. AR submitted that this fact is recorded in the assessment order of the assessee also. Ld. AR invited our attention to page No. 167 to 168 which is a letter issued by City Corporation letter. Assessee explaining that no cash payments have been made by the assessee the said letters also refers to retraction of statement made during the search. Ld. AR requested for deleting the additions.
Submission of ld.Departmental Representative(ld.DR) :
3. The ld.DR for the Revenue relied on the order of Assessing Officer(AO) and ld.CIT(A)[NFAC].
Findings & Analysis :
4. We have heard both the parties and perused the records. In this case assessee is a salaried employee working with Government of India. During the year assessee has purchased a flat in Adreno Towers for a consideration of Rs. 71,51,120/-. Based on the search in the case of City Group ld. AO asked the assessee to explain the source of payment and asked assessee to explain whether any cash payment has been made. Assessee submitted source of payments. Assessee also denied any cash payment, however ld. AO based on the statement of Mr. Chetan which was recorded during the search in the case of City Group and based on the excel sheet concluded that assessee had paid cash of Rs. 2,50,000/- for purchase of flat. It is observed that the statement recoded during the search were retracted subsequently. This fact is mentioned by the ld. AO in the assessment order itself. It is also observed that the City Corporation Ltd had issued letter to all the buyers explaining the search and admitting that no cash was received. One such letter is at page No. 167 to 168 of the paper book. The ld. AO has not brought on record any specific positive evidence to prove cash of Rs. 2,50,000/-. Ld. AO has relied on excel sheet however the source of the excel sheet is not clear whether the said excel sheet has been prepared by the builder or any one else. It is also noted that opportunity of cross examination asked by assessee was not provided.
5.1 On identical facts by the decision of Coordinate Bench of ITAT in the case of Amit Shantaram Bagade in ITA Nos. 832 & 6286/Mum/2026, who has purchased the flats from City Group has deleted the addition.
5.2 The ld. AO has failed to establish that assessee had made any cash payments. Accordingly, respectfully following the decision of Coordinate Bench of ITAT in the case of Amit Shantaram Bagade (supra), we direct the AO to delete the addition of Rs. 2,50,000/-.”
9. Respectfully following the above judicial precedents, wherein one of the party involved was City Corporation Limited and denied to receive any on-money from the assessee, the onus was on the Assessing Officer to establish it by referring to the documents which shows on-money payment made to City Corporation Limited. Even, otherwise, if the Assessing Officer was relying on any seized documents, it was mandatory for the Assessing Officer to provide copies of those documents to the assessee. However, we find that no such documents or evidences were supplied to the assessee, on the basis of which, so called addition was made. Even the statement of Mr. Chetan was retracted during the assessment proceedings in the case of City Corporation Limited and a confirmation letter was supplied to all the buyers that no on-money/ cash was received. Considering the totality of the facts of the case and in the light of above coordinate bench decisions involving the same party, we deem it appropriate to set-aside the impugned order passed by Ld. CIT(A)/NFAC and direct the Assessing Officer to delete the addition of Rs.18,56,026/- made u/s 69B r.w.s. 115BBE of the IT Act. Thus, the grounds of appeal raised by the assessee are allowed.
10. In the result, the appeal filed by the assessee is allowed.
Order pronounced on this 12th day of October, 2026.
