Tribunal overturns Rs. 32.56 crore addition based on unverified on-money receipts

The Tribunal allowed the appeal filed by the assessee, setting aside the addition of Rs. 32.56 crores based on alleged on-money receipts. The Tribunal found the loose sheets lacking corroborative evidence and emphasized that entries in loose sheets are not admissible unless supported by independent evidence. The AO was directed to delete the addition as the actual prices paid were not verified, and further inquiries were not conducted, concluding that the additions lacked merit.

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Issues: Whether additions towards alleged on-money receipts based solely on a loose sheet found during survey, without examination of buyers or independent corroborative evidence, were sustainable.

Analysis: The loose sheet did not mention the assessee's project in clear terms and its contents did not tally with the actual configuration of the flats. The assessee had furnished purchaser-wise details including names, addresses and PANs, but no buyer was examined and no independent enquiry was made to establish cash over and above declared sale consideration. The Tribunal held that the Revenue could not enhance business receipts merely on suspicion, general market perception, or a loose paper lacking reliability and corroboration. Such a document, unsupported by surrounding evidence, was treated as a dumb document and insufficient to sustain the addition.

Conclusion: The addition of alleged on-money receipts was deleted and the issue was decided in favour of the assessee.

Final Conclusion: The assessment additions based on alleged unaccounted cash receipts were held unsustainable for want of reliable and corroborated material.

Ratio Decidendi: A loose sheet unconnected to the assessee's project and uncorroborated by independent evidence cannot, by itself, justify an addition for alleged unaccounted receipts.

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