SHIVAJI TUKARAM PAWALE,NAVI MUMBAI vs. INCOME TAX OFFICER WARD 3(1), KALYAN, KALYAN

आयकर अपीलीय अिधकरण, मुंबई पीठ�, मुंबई INCOME TAX APPELLATE TRIBUNAL, MUMBAI ‘C’ BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER

ITA 2565/MUM/2026 िनधा�रण वष�/Assessment Year: 2017-18) Shivaji Tukaram Pawale Income Tax Officer Ward 3(1), Kalyan 1202,Solgem Chs,Plot No.22,Sector No.25 Kamothe, Kalyan Vs. Navi Mumbai-410209, Kalyan-Dombivali-421301, Maharashtra Maharashtra अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of ADJPP2856K Assessee:

अपीलाथ� �ारा/Appellant represented by: Shri Bhupendra Shah ��थ� �ारा/Respondent represented by: Shri Ajay Soneji, Sr. DR

सुनवाई की तारीख / Date of conclusion of hearing: 14-July 2026 घोषणा की तारीख / Date of pronouncement: 27.07.2026 आदेश / ORDER

Per: Saktijit Dey, Vice President:

This is an appeal by the assessee against order dated 16-1-2026 passed by National Faceless Appeal Center (NFAC), Delhi for the Assessment Year 2017- 18.

ITA 2565/MUM/2026 SHIVAJI TUKARAM PAWALE 2. Basically, two issues arise out of the appeal preferred by the assessee. The

first issue relates to addition of an amount of Rs.25,00,000/- representing alleged

on money paid in cash towards purchase of a flat. Whereas, the second issue

relates to denial of deduction claimed by the assessee under Section 80 TTA of

the Income Tax Act, 1961 (in short ‘the Act’).

assessment year under dispute, assessee filed his return of income on 23-7-2017,

declaring income of Rs.20,23,130/-. In course of assessment proceedings, based

on information available on record, the Assessing Officer noticed that during a

survey undertaken under Section 133A of the Act, in respect of partners of M/s.

Lakshmi Builders and Developers, a statement was recorded under Section 131

of the Act, wherein the concerned partner admitted of receiving on money in cash

over and above the declared sale consideration towards sale of flats. The

information available in course of survey allegedly revealed that the assessee had

paid on money of Rs.25,00,000/- to the builder for purchasing the flat. When the

aforesaid information was confronted to the assessee, the assessee flatly denied

of having paid any amount in cash over and above declared sales consideration of

Rs.49,00,000/-. The Assessing Officer, however, was not convinced.

Act of the partners of the builder company, he concluded that the assessee indeed

had paid on money of Rs.25,00,000/- in cash and added back the amount under

ITA 2565/MUM/2026 SHIVAJI TUKARAM PAWALE section 69 of the Act. Although the assessee contested the aforesaid addition

before learned First Appellate Authority, however, he was unsuccessful.

A reading of the assessment order reveals that the addition of Rs.25,00,000/- was

founded primarily upon the statement allegedly recorded under section 131 of the

Act from two partners of M/s Lakshmi Builders and Developers. It is the case of

the Assessing Officer that in the said statement, the partners of the builder

company had admitted of having received cash from the buyers of flat. However,

the material on record reveals that in course of assessment proceedings itself, the

assessee had not only denied of having paid any cash over and above declaration

sale consideration, but had also insisted upon the Assessing Officer to provide a

copy of the statement recorded under section 131 of the Act, as also to grant

opportunity to cross-examine the partners whose statements were relied upon.

However, such request of the assessee was brushed aside both by the Assessing

Officer and learned First Appellate Authority. Jurisprudence is well established

that any adverse material used by the Assessing Officer for making addition has

to be confronted to the assessee.

relied upon the statement of third parties, however, neither the statements were

given to the assessee nor the assessee was given any opportunity to cross-examine

the persons whose statements were relied upon. When the assessee had

ITA 2565/MUM/2026 SHIVAJI TUKARAM PAWALE specifically denied of having paid any cash over and above the declared sale

consideration, the Assessing Officer was duty-bound not only to supply the

adverse material to the assessee, but allow him to cross-examine the persons

whose statements were relied upon. The denial of such opportunity to the assessee

makes the addition vulnerable. Thus, we have no hesitation in deleting the

addition of Rs. 25,00,000/- made under Section 69 of the Act.

80TTA of the Income-tax Act, 1961 in respect of interest income is concerned,

we direct the Assessing Officer to verify assessee's claim. If, upon such

verification, the assessee is found to be eligible, the Assessing Officer shall allow

the deduction in accordance with the relevant statutory provision and in

conformity with law.

(Girish Agrawal) (Saktijit Dey) Accountant Member Vice President Dated: 27/07/2026 Mumbai Aks/-

ITA 2565/MUM/2026 SHIVAJI TUKARAM PAWALE

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT - concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai