Nitish Baburao Bhatkar Vs ITO (ITAT Mumbai)
Mumbai ITAT Deletes ₹30 Lakh Alleged On-Money Addition; Third-Party Search Material Without Corroboration Cannot Sustain Section 69C Addition
The Mumbai ITAT deleted an addition of Rs. 30 lakh under section 69C, holding that an alleged on-money payment for purchase of an industrial unit could not be sustained solely on the basis of third-party search material and a general statement recorded during the search on the GNP Group. The Tribunal noted that the assessee had produced the registered sale agreement, builder’s receipts, bank statements, and an affidavit demonstrating that the entire purchase consideration of Rs. 27 lakh was paid through banking channels. It further observed that the seized Excel sheet relied upon by the Assessing Officer referred to another person (“Anup Tejwani”), and no independent enquiry was conducted to establish any nexus between the seized material and the assessee. The Assessing Officer neither examined the builder, provided an opportunity for cross-examination, nor brought any corroborative evidence such as cash trail, receipts, or admissions specifically implicating the assessee. Following its earlier decisions in similar “on-money” cases arising from builder searches, the Tribunal held that uncorroborated third-party statements and seized documents cannot, by themselves, justify an addition under section 69C. Accordingly, the addition was deleted. The Tribunal, however, dismissed the legal grounds challenging the reopening and natural justice as not pressed by the assessee during the hearing.
