On-money addition for flat purchase deleted where search statements were unsupported by seized material or corroborative evidence.

Addition for alleged on-money payment on flat purchase could not be sustained where it was based only on builder-group statements and search material, without any seized document or independent corroborative evidence linking the assessee to the alleged extra payment. The record did not show actual payment by the assessee over and above the agreement value, and mere reliance on third-party statements was insufficient. The ITAT Mumbai therefore deleted the addition and granted relief to the assessee.

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Issues: Whether the addition made on account of alleged on-money payment towards purchase of flat was sustainable when it was based only on statements recorded in the search proceedings and no seized incriminating material or corroborative evidence linking the assessee to such payment was brought on record.

Analysis: The addition rested on the statements of persons associated with the builder group and on electronic material said to have been found in search, but the assessee was not provided any seized material showing actual payment by him. The record did not contain independent corroboration to establish that the assessee had paid Rs. 31,00,000/- over and above the agreement value. In the absence of such material, the mere reliance on builder statements was insufficient to sustain the addition.

Conclusion: The addition was deleted and the issue was decided in favour of the assessee.

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