Suraj Kumar Vs DCIT (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, allowed the assessee’s appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Year 2021-22. The appeal challenged the confirmation of an addition of ₹5,00,000 under Section 69 of the Income-tax Act, 1961, enhancement of income by ₹19,58,230 by the CIT(A), the direction to initiate proceedings under Section 269SS, and alleged violations of the principles of natural justice.
The assessee had originally filed a return declaring total income of ₹7,28,410. A search under Section 132 was conducted in the Rubberwala Group on 17.03.2021. During the search, the investigation authorities alleged that the assessee had purchased a commercial shop in Platinum Mall, Mumbai, and had paid an additional cash component of ₹24,58,230 in three instalments, comprising ₹5,00,000 relating to Assessment Year 2020-21 and ₹19,58,230 relating to Assessment Year 2021-22. The Assessing Officer completed the assessment under Section 143(3) by making an addition of ₹5,00,000 under Section 69. The CIT(A) upheld the addition and further enhanced the assessed income by ₹19,58,230 while directing the Assessing Officer to initiate proceedings under Section 269SS.
The assessee contended before the Tribunal that no cash payment had been made for the purchase of the property and that the entire consideration had been paid through banking channels. It was submitted that the additions were based solely on statements recorded from employees and promoters of the Rubberwala Group and on Excel sheet data recovered from a pen drive belonging to an employee of the developer. The assessee argued that no incriminating material had been found from his possession, that no effective opportunity for cross-examination had been granted, and that the additions violated the principles of natural justice. The assessee also relied upon several coordinate bench decisions involving the same search conducted in the Rubberwala Group, which had held that additions based solely on third-party statements or uncorroborated electronic records were unsustainable. The assessee further argued that even according to the alleged statements, any cash payment related to an earlier assessment year and not to Assessment Year 2021-22.
