DCIT Vs Karan Gupta (ITAT Pune)
Pune ITAT Deletes ₹4.02 Crore ‘On-Money’ Addition; Third-Party Statements and Dumb Documents Not Enough
The Pune ITAT upheld the deletion of an addition of ₹4.02 crore made under section 153C on account of alleged cash “on-money” paid for purchase of land at Savargaon, holding that no addition can be sustained merely on the basis of third-party statements, loose papers and presumptions without independent corroborative evidence.
The assessee, one of the co-purchasers of Savargaon land from the Kokani family, was alleged to have paid cash over and above the registered consideration. The addition was based on loose sheets found during search proceedings in the case of the sellers and on statements recorded from members of the Kokani family claiming receipt of on-money. Based on these materials, the Assessing Officer made an addition of ₹4.02 crore as unexplained investment.
The Tribunal noted that identical additions made in the hands of the other co-purchasers had already been deleted by coordinate benches. It observed that no incriminating material whatsoever was found during search in the hands of the assessee, and the seized documents from the sellers neither mentioned the assessee nor established any payment of on-money by him. The Tribunal also noted that during cross-examination, members of the Kokani family denied having received any on-money from the purchasers and stated that the additional income was offered merely to buy peace and avoid litigation.
Relying on earlier Tribunal decisions in the same land transaction, the ITAT reiterated that contradictory statements have little evidentiary value, “dumb documents” containing mere numerical notings cannot justify additions, and suspicion however strong cannot replace evidence. The Tribunal further held that the presumption under section 132(4A) applicable to searched persons cannot automatically be extended to third parties.
Accordingly, the Tribunal confirmed the CIT(A)’s order deleting the addition of ₹4.02 crore and dismissed the Revenue’s appeal. On the assessee’s cross-objection, the Tribunal restored to the CIT(A) the issues relating to approval under section 153D and the validity of a consolidated satisfaction note under section 153C for fresh adjudication.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal filed by the Revenue is directed against the order dated 03.12.2024 passed by Ld. CIT(A), Pune- 12 [‘Ld. CIT(A)’] for the assessment year 2014-15. The assessee is also in Cross Objection against the appeal of the Revenue.
