Woman Faced Rs. 27.75 Lakh Tax Addition Based on Builder’s Excel Sheet; ITAT Deletes Addition for Lack of Evidence

The Income Tax Appellate Tribunal (ITAT) Ahmedabad has observed that the assessee’s name did not appear in the digital data and that all payments for the property purchase were made through banking channels. Accordingly, the addition made by the assessing officer and sustained by the CIT(A) was held to be unsustainable.

The assessee had originally filed her return of income, declaring a total income of Rs 384,860. Based on information received by the department regarding a cash payment of Rs. 27.75 lakh towards the purchase of Shop No. 43 in the Samanvay Samipya project, reassessment proceedings were initiated by issuing notice under Section 148 of the Income Tax Act, 1961.

The information was taken from an Excel sheet recovered during survey proceedings conducted under Section 133A at the premises of the Samanvay Group. According to the AO, the digital data revealed that the assessee had paid Rs 27.75 lakh in cash towards the property, and, therefore, the amount represented an unexplained investment liable to be taxed under Section 69 read with Section 115BBE. The assessee contended that the shops were purchased on 4 April 2023 for Rs 14 lakh and that the entire consideration had been paid through cheques and NEFT. Copies of bank statements and payment details were produced to support the claim.

Despite these explanations, the AO made an addition of Rs. 27.75 lakh under Section 69, which was later affirmed by the National Faceless Appeal Centre (NFAC).

The Tribunal noted that the Excel sheet did not contain the name of the assessee. Instead, the name appearing therein was “Bharatkumar Jayshriben Shah”. It further observed that the payment details furnished by the assessee were duly reflected in her bank statements and were never disputed by the AO. It also pointed out that the cash payment of Rs 27.75 lakh was never conveyed to the Samanvay Group or any concerned person associated with the project. The revenue had merely proceeded on the basis of digital data recovered from a third party without carrying out any further verification.

Holding that such material, in the absence of evidence, could not justify the addition, the Tribunal held that the addition made under Section 69 and taxed under Section 115BBE was unsustainable. Accordingly, the Ahmedabad Bench of the ITAT allowed the appeal of the assessee and directed deletion of the addition of Rs. 27.75 lakh.