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Facts
The assessee's assessment for AY 2020-21 was reopened, and an addition of Rs. 8 Lacs was made by the AO for an alleged cash payment towards a shop purchase from M/s Omaxe Ltd. This was based on information from a search action and an electronic excel sheet. The assessee denied the cash payment, asserting all transactions were through banking channels, but the AO and CIT(A) upheld the addition.
Held
The Tribunal held that the AO failed to provide cogent evidence for the cash payment and violated the principle of natural justice by denying the assessee cross-examination rights. The assessee, having provided documentary evidence of bank payments, confirmation from M/s Omaxe Ltd., and an affidavit, was deemed to have discharged its onus. The Tribunal concluded that the addition, based on unsubstantiated allegations and presumptions, was not sustainable and directed the AO to re-compute the income.
Key Issues
Sustainability of addition under Section 69 read with 115BBE based on alleged cash payment from third-party information without allowing cross-examination.
Sections Cited
147, 148, 132(4), 69, 115BBE
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Income Tax Appellate Tribunal, “SMC” BENCH, CHANDIGARH
(िनधा"रण वष" / Assessment Year: 2020-21) M/s Amarjot Singh Sohi - HUF ITO, Ward-6(1) House No. 624, Phase-2, Sector-54 बनाम/ Vs. Sector-17 Mohali, Punjab – 160055 Chandigarh "थायीलेखासं./जीआइआरसं./PAN/GIR No. AANHA-5844-F (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant by : Sh. Rohit Bector (CA) – Ld. AR ""थ"कीओरसे/Respondent by : Sh. Vivek Vardhan (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 06-01-2026 घोषणाकीतारीख /Date of Pronouncement 07-01-2026 : आदेश / O R D E R
Aforesaid appeal by assessee for Assessment Year (AY) 2020- 21 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 21-07-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 147 of the Act on 19-03-2025 making addition of Rs.8 Lacs in the hands of the assessee. The same has been confirmed by Ld. CIT(A) against which the assessee is in further appeal before Tribunal. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under.
It emerges that pursuant to receipt of certain information that the assessee paid cash of Rs.8 Lacs to M/s Omaxe Ltd. in lieu of purchase of shop besides making payment through banking channels, the case of the assessee was reopened and notice u/s 148 was issued on 15-03-2024. The said information stem from search action by the department on Omaxe group and statement recorded from officers of that concern u/s 132(4) of the Act. It transpired that the assessee purchased a shop from Omaxe group in its project situated at Mullanpur. In reply to show-cause notices of Ld. AO, the assessee contended that all the payments were made through banking channels and denied having made any cash payment in the said transaction. The details of payments as made by the assessee were also furnished to Ld. AO. However, considering the statement of officers of M/s Omaxe Ltd u/s 132(4) regarding data pertaining to cash payment gathered from the electronic device wherein the details of assessee making cash payment was mentioned, the assessee’s submissions were rejected by Ld. AO. As per electronic data, the assessee allegedly made payment of Rs.8 Lacs. In the electronic data, the amounts mentioned in the excel sheet was suppressed by factor of “100”. Considering the factual matrix, Ld. AO made addition of Rs.8 Lacs u/s 69 r.w.s. 115BBE of the Act and framed the assessment. The Ld. CIT(A) upheld the action of Ld. AO. Aggrieved, the assessee is in further appeal before Tribunal.
From the facts, it clearly emerges that the assessee has, all along, denied having made any cash payment in the transaction. The whole case of Ld. AO stem from search action on the seller group coupled with statement of officers recorded therein. Apparently, one excel sheet has been found which allegedly contain details of cash payment on sale transaction. In the excel sheet, the assessee is shown to have made payment of Rs.8 Lacs on the impugned transaction. However, the assessee has denied the same and contended that all the payments were made pursuant to written agreement and the payments were through banking channels only. The details of such payment have duly been furnished to Ld. AO. No opportunity of cross-examination has ever been provided to the assessee which is in violation of principle of natural justice. In my considered opinion, the onus was on Ld. AO to prove with cogent evidence that cash was exchanged in the transaction. The assessee has furnished all the documentary evidences as available with him to support the contention that all the payments were made through banking channels only. The confirmation of payment has duly been furnished by the assessee from M/s Omaxe Ltd. which is kept on Page No.30 of the paper book. The payments are duly supported by bank statements and the same are reflecting in Form No.26AS of the assessee. The assessee has filed affidavit to the effect that no cash has even been paid to M/s Omaxe Ltd. The assessee could not be asked to prove the negative. In my opinion, the assessee has duly discharged its onus whereas the allegations of Ld. AO remain unsubstantiated. It is trite law that no addition could be made on mere presumptions and assumptions. Considering the facts and circumstances of the case, the impugned addition is not sustainable. I order so. The Ld. AO is directed to re-compute the income of the assessee.