Pune ITAT Deletes ₹10 Lakh Addition on Alleged On-Money Payment for Flat Purchase — Incomplete Seized Documents and Uncorroborated Witness Statements Held Insufficient
Case Background
Ashutosh Pandurang Patil Vs ITO (ITAT Pune)
Assessment Year: 2023-24
Order Date: 24th June, 2026
The Income Tax Appellate Tribunal, Pune Bench, delivered a significant ruling in favour of the assessee by directing deletion of an addition of ₹10,00,000/- alleged to have been paid as on-money during the purchase of a residential flat. The Tribunal concluded that the Revenue had utterly failed to discharge its burden of establishing that any undisclosed cash consideration had actually changed hands between the assessee and the builder.
Facts of the Case
The assessee, Ashutosh Pandurang Patil, bearing PAN APBPP0957M, filed his return of income under Section 139(1) of the Income Tax Act, 1961 for Assessment Year 2023-24, declaring a total income of ₹23,68,910/-. He is employed with Mahindra and Mahindra Limited at their Pune office. During the relevant period, he had purchased a flat in Pune on 31-03-2022.
How the Case Was Triggered
The assessee's case was picked up for compulsory complete scrutiny based on intelligence inputs received from the Investigation Wing, specifically arising out of a search and seizure operation conducted on the SSD Group on 4th May, 2023. During this search, certain incriminating documents were reportedly recovered from the premises of Yash Jhan Giyani, an employee of the SSD Group. Based on this information, the Assessing Officer initiated scrutiny proceedings under Section 143(3) read with Section 144B of the Income Tax Act, 1961.
The assessee was asked to furnish an explanation regarding the alleged payment of ₹10,00,000/- in cash to SSD Promoters and Builders as undisclosed consideration over and above the registered agreement value for Flat No. E-503 in the Sai Vista project.
Position Taken by the Assessee
The assessee categorically denied having made any cash payment to the builder. He maintained that the entire purchase consideration was structured and paid strictly as per the terms of the registered sale agreement, entirely through banking channels. To substantiate his position, the assessee placed the following documents on record before the Assessing Officer:
- Copy of ICICI Bank account statement
- Copy of State Bank of India home loan statement
- Copies of payment receipts issued by Sai Vista
- A detailed chart mapping the sources of funds used for the flat purchase
- The registered sale agreement for Flat No. E-503
- Housing loan sanction letter
Despite acknowledging the assessee's response, the Assessing Officer held the explanation to be unsatisfactory and proceeded to make an addition of ₹10,00,000/- under the assessment order passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961 dated 04.02.2025.
The Learned Commissioner of Income Tax (Appeals), NFAC, Delhi, confirmed the addition vide order passed under Section 250 of the Income Tax Act, 1961 on 27.01.2026. Aggrieved by this, the assessee preferred the present appeal before the Pune ITAT.