Alleged cash "on-money" in shop purchase deal across AYs 2017-18 to 2019-20; s.69 additions deleted for lack of proof

Additions under s.69 for alleged cash "on-money" paid for purchase of a shop were examined across AYs 2017-18 to 2019-20. For AYs 2017-18 and 2018-19, the Tribunal found no material showing any cash payment in those years; allotment and bank records indicated the purchase transaction occurred only in FY 2018-19 (AY 2019-20), so the s.69 additions for AYs 2017-18 and 2018-19 were deleted. For AY 2019-20, the Revenue relied solely on third-party search statements and an Excel sheet from a pen drive, which were held uncorroborated by independent evidence, consistent with coordinate bench decisions; the s.69 addition for AY 2019-20 was deleted and the appeals were allowed.

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Issues: Whether additions made under section 69 of the Income-tax Act, 1961, on account of alleged cash on-money paid for purchase of the shop could be sustained for the assessment years in question.

Analysis: The shop purchase was found to have been booked and substantially transacted in the relevant later year, and the record did not show any cash on-money payment in the earlier assessment years. For the year in which the transaction was booked, the Revenue relied principally on a third-party statement and an Excel sheet recovered from a pen drive in the possession of a search-party employee. The material was not confronted to the assessee, no independent corroboration supported the alleged cash component, and the assessee was denied the benefit of cross-examination. In such circumstances, the adverse material could not be treated as credible evidence to sustain the addition.

Conclusion: The additions under section 69 were not sustainable and were deleted.

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