ITAT Supports CIT(A) Decision to Delete Addition Based on Excel Sheet Without Concrete Evidence

ITAT Supports CIT(A) Decision to Delete Addition Based on Excel Sheet Without Concrete Evidence

Introduction

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the Commissioner of Income Tax (Appeals) [CIT(A)] deletion of Rs. 80 lakh treated as unexplained income for a flat, as no payment was made and no allotment existed.

Factual Background

Sudipta Ajoykumar Mukherjee, the respondent-assessee, was involved in a search and seizure conducted under Section 132 of the Income Tax Act on 07/05/2018. During the search, an excel-sheet of Ashirwad Co-operative Housing Society Ltd. showed that the assessee had allegedly paid Rs. 80,00,000/- in cash for a flat allotment.

Procedural Background

The Assessing Officer (AO) issued a show cause notice treating the amount as unexplained investment under Section 69. The assessee clarified that she received an allotment letter for a 2BHK flat but resigned from the Society before making any payment. The AO still added Rs. 80,00,000/- to her income. On appeal, the CIT(A) accepted her explanation and deleted the addition.

Contentions of Parties

Revenue's Contention: The Revenue-appellant appealed against the CIT(A) order, arguing that the addition was justified based on the excel-sheet.

Assessee's Contention: The assessee contended that no payment was made and no flat was allotted, and the addition was based on presumptions and conjectures.

Reasoning and Analysis

The bench of Sandeep Singh Karhail (Judicial Member) and Narendra Kumar Billaiya (Accountant Member) reviewed the orders of the lower authorities and noted that the assessee never made the initial 25% payment, and the AO did not produce any evidence showing that the assessee had paid any amount or that a flat was actually allotted to her. The addition was based solely on an excel-sheet recovered from a third party, and there was no registration or agreement evidencing allotment.

Implications

The judgment highlights that additions cannot be made based on presumptions and conjectures without concrete evidence. The tribunal's decision emphasizes the importance of verifying the facts and circumstances of a case before making additions.