DCIT Vs Appaswamy Real Estates Limited (ITAT Chennai)
A ₹1 Crore Entry in Someone Else’s Loose Sheet: Who Actually Paid the Cash?
A third-party loose sheet and statement may justify investigation, but they do not by themselves establish unexplained expenditure in the hands of another assessee. The Chennai Bench of the ITAT applied this principle in DCIT v. Appaswamy Real Estates Limited, ITA No. 2803/Chny/2026, AY 2024-25, pronounced on 28 September 2026. The Tribunal dismissed the Revenue’s appeal and upheld deletion of a ₹1 crore addition under Section 69C, while also holding that the amount could not alternatively be taxed under Section 69A.
The dispute arose from a search in the case of Jeeva Educational Trust and group concerns. During a search at the residence of Shri M. Gopal, a transport operator and real-estate broker, a loose sheet was found containing a narration concerning receipt of ₹1 crore. Shri Gopal stated under section 132(4) that the money had been handed over to him by a person at the Appaswamy Group office at T. Nagar, Chennai. When the statement was confronted to Shri Ravi Appasamy, Managing Director of the assessee group, he denied knowledge of the alleged transaction. No corresponding incriminating material, unaccounted cash, parallel books, withdrawal, money trail or other evidence of the alleged payment was found from the assessee.
