The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has deleted an addition of ₹27.75 lakh made under Section 69 of the Income Tax Act, holding that an addition for unexplained investment cannot be sustained solely on the basis of third-party digital data when the assessee’s name does not appear in the alleged evidence and no corroborative material is brought on record.
The bench of Suchitra Kamble (Judicial Member) has observed that the Excel sheet relied upon by the department did not contain the assessee’s name. Rather, it referred to another person, namely Bharatkumar Jayshriben Shah, as the purchaser associated with the alleged cash component. The Assessing Officer had merely relied upon the Excel sheet without establishing any direct nexus between the assessee and the alleged cash transaction.
The appeal was filed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), which had upheld an addition of ₹27.75 lakh as unexplained investment under Section 69 of the Income Tax Act for Assessment Year 2019-20.
The reassessment proceedings were initiated after the tax department received information alleging that the assessee had made a cash payment of ₹27.75 lakh for the purchase of Shop No. 43 in the Samanvay Samipya project. Based on this information, a notice under Section 148 was issued and reassessment proceedings were commenced.
The allegation stemmed from a survey conducted under Section 133A in the case of the Samanvay Group. During the survey, the department found an Excel sheet contained in impounded digital data recovered from the group’s premises in Vadodara. According to the Assessing Officer, the Excel sheet indicated that a cash component of ₹27.75 lakh had been paid towards the purchase of the property. Based on this information, the Assessing Officer treated the amount as unexplained investment and added it to the assessee’s income under Section 69.
The assessee consistently denied having made any cash payment. She submitted that Shops No. 43 and 44 in the Samanvay Samipya project were actually purchased on 4 April 2023 for a total consideration of ₹14 lakh and that the payments were made entirely through banking channels, including cheques and NEFT transfers. Supporting bank records and transaction details were furnished before the Assessing Officer.
The assessee further argued that the digital evidence relied upon by the department was never confronted properly and no opportunity for cross-examination was provided. She also pointed out that the Excel sheet did not contain her name. Instead, the purchaser’s name mentioned in the sheet was “Bharatkumar Jayshriben Shah” and not the assessee herself.
The Bench further noted that the assessee had produced detailed evidence of payments made through banking channels, which matched her bank statements. Importantly, these documentary evidences were never disputed by the Assessing Officer.
The Tribunal also highlighted that the alleged cash trail of ₹27.75 lakh was never confronted to the Samanvay Group or any concerned person connected with the project. No independent verification or corroboration had been undertaken by the department.
Holding that the addition was based solely on an Excel sheet that did not even mention the assessee’s name and in the absence of any corroborative evidence linking her to the alleged cash payment, the ITAT concluded that the addition of ₹27.75 lakh under Section 69 was unsustainable in law.
The Tribunal allowed the assessee’s appeal and directed deletion of the entire addition.
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