Kedar Ramakant Kulkarni Vs ACIT (ITAT Pune)
Survey in Builder’s Case Not Enough: Onus on AO, Not on Assessee: ITAT Pune Rejects Unexplained Investment Theory-Third-Party Survey Material Without Proof Can’t Sustain s.69 Addition
The Pune Bench (SMC) of the ITAT, vide order dated 31.12.2025 in Kedar Ramakant Kulkarni v. ACIT, Circle-8, Pune (ITA No. 2614/PUN/2025, AY 2020-21), allowed the assessee’s appeal and deleted the addition of ₹17,50,000 made u/s 69 on account of alleged unexplained cash investment in purchase of office premises.
The assessee had purchased office premises from M/s Swadik Trade Pvt. Ltd. (STPL). Based on a survey u/s 133A conducted in the case of STPL, the AO alleged that apart from the registered consideration of ₹15 lakh, the assessee had paid cash of ₹17.50 lakh during FY 2019-20. The addition was made solely on the basis of information received from the Investigation Wing and a ledger extract found in the builder’s books.
The Tribunal noted that no specific document evidencing cash payment was referred to or confronted to the assessee. While the AO relied on a ledger for FY 2020-21, the alleged cash payment was attributed to FY 2019-20, creating an inherent inconsistency. The assessee had categorically denied any cash payment, and no opportunity of cross-examination of the builder or survey officials was provided.
Interpreting Section 69, the ITAT held that the primary onus lies on the AO to first establish, through cogent material, that an unrecorded investment was actually made. In the absence of any incriminating document or corroborative evidence, the AO failed to discharge this burden. Mere third-party survey information or assumptions could not justify a deeming addition.
Accordingly, the ITAT directed deletion of the entire addition of ₹17.50 lakh and allowed the appeal in full, reiterating that unexplained investment additions cannot rest on suspicion or unverified third-party material.
FULL TEXT OF THE ORDER OF ITAT PUNE
