2026 (4) TMI 175 - AT - Income Tax

Third-party loose sheet without corroboration cannot sustain reassessment addition for alleged cash payment.

A third-party loose excel sheet, without a clear nexus to the assessee's alleged purchase and without corroborative evidence, cannot by itself justify an ... Addition sustained in reassessment relying on excel sheet found during survey at a third party premises - Corroboration of seized material - Addition for unexplained investment - Mismatch of property and period - HELD THAT:- The Tribunal found that the excel sheet relied upon by the Assessing Officer related to the project 'Westfields' and referred to entries of March 2019, whereas the assessee's purchase was of a different shop in a different project in July 2021 through cheque payments. AO had not correlated the seized sheet with the assessee's transaction, nor referred to any supporting statement or other material establishing actual cash payment by the assessee. The developer's notarized affidavit also stated that no cash payment was received from the assessee and that there were no financial transactions with her during the relevant assessment year. Applying the principle stated in PCIT, Central vs. Kaushik Nanubhai Majithia [2024 (3) TMI 1339 - GUJARAT HIGH COURT] Tribunal held that a third-party unsigned excel sheet, without explanation of its nature and without corroborative material, was insufficient to sustain the addition. [Paras 7, 8] The addition was deleted and the assessee's appeal was allowed. Final Conclusion: The Tribunal held that the reassessment addition had been made only on the basis of an uncorroborated excel sheet that did not match the assessee's actual transaction or the relevant period. The addition was therefore deleted and the appeal was allowed. Issues: Whether the addition sustained in reassessment could rest solely on an excel sheet found during survey at a third party premises without proper nexus or corroboration with the assessee's alleged purchase transaction.Analysis: The reassessment was founded on a loose excel sheet found in the course of survey on a builder's premises. The sheet related to a different project and did not satisfactorily correlate with the shop purchased by the assessee in 2021. The record also showed cheque payments and a notarized affidavit from the developer denying receipt of cash from the assessee. In the absence of corroborative material, the document by itself was not sufficient to sustain the inference that the assessee had made undisclosed cash payments.Conclusion: The addition could not be sustained and was deleted in favour of the assessee.Final Conclusion: The reassessment addition was set aside because the material relied upon did not establish a credible link between the assessee and the alleged cash payment.Ratio Decidendi: A third-party loose sheet or excel extract, without corroboration and without a clear nexus to the assessee, cannot by itself justify an addition in assessment.