--- title: "No Addition for \"On money\" merely based on conjectures and surmises | BNPS and Associates LLP" url: "https://bnpsca.com/insight/no-addition-for-on-money-merely-based-on-conjectures-and-surmises" description: "ITAT deletes the addition u/s 69 for \"On money\" in hands of property buyer" --- # No Addition for "On money" merely based on conjectures and surmises Written by: **[CA Divyang J Shah](https://bnpsca.com/partner/ca-divyang-j-shah)** \| Topic: **Income Tax** ![No Addition for "On money" merely based on conjectures and surmises](https://imageproxy.inlancer.in/pr:sharp/f:webp/rs:fit:1200:0/g:sm/plain/https://bnpsca.com/public/assets/upload/images/original/6a9e5f512fdc6-cash-1.jpg)07-09-2026 ITAT deletes the addition u/s 69 for "On money" in hands of property buyer ### No Addition for "On-Money" on Mere Presumption: ITAT Ahmedabad Reiterates the Need for Direct Evidence **Facts of the Case** A search action was conducted on the Shivalik Group on 10.02.2022. During the search, several digital devices were seized, including a pendrive from which deleted data was retrieved. Among the recovered files was an Excel sheet titled "LEGACY.xlsx," which listed various flat/unit numbers of the "Shivalik Legacy" project along with corresponding figures under a column named "Amount Cash." Against Unit No. B-101 — the flat purchased by the assessee — the sheet reflected an amount of ₹2,67,600/- under "Amount Cash." Separately, a WhatsApp image titled "Brokerage Sheet," recovered from a different seized computer, showed brokerage computations for five other, unrelated units/buyers, indicating that brokerage was paid at 2% each on the cheque and cash components of the sale consideration. **The Assessing Officer's Reasoning:** The AO noticed that for three units (B-502, B-601, and A-302), the cash figure in LEGACY.xlsx matched the cash brokerage figure in the WhatsApp brokerage sheet. Extrapolating this pattern, the AO treated the ₹2,67,600/- entry against the assessee's flat (B-101) as "cash brokerage," and reverse-computed the underlying cash sale consideration at 2% brokerage, arriving at an alleged on-money payment of **₹1,33,80,000/-**. This amount was added to the assessee's income under Section 69 of the Income Tax Act, 1961, as unexplained investment. It is worth noting that the assessee's name did not appear anywhere in the seized Excel sheet, the WhatsApp image, or in any statement recorded during or after the search. **Findings of the CIT(A)** The CIT(A), NFAC, deleted the addition, holding that: - The assessee's name did not appear directly in any finding of the AO or in the seized material. - Mere mention of the flat number and a cash figure against it could not conclusively prove that the assessee had paid on-money. - The AO had not brought a single piece of evidence on record to establish that the assessee had actually made a cash payment to the Shivalik Group; connecting the flat number to the assessee was, at best, a hypothesis without corroboration. - Reliance was placed on *CIT v. Shoorji Vallabhdas & Co.* \[1962\] 46 ITR 144 (SC), for the proposition that income tax cannot be levied on hypothetical income, and that an assessment cannot be framed on surmises and conjectures. **Findings of the ITAT** The Tribunal upheld the CIT(A)'s order and dismissed the Revenue's appeal, making the following key observations: 1. **No nexus with the assessee:** The assessee's name did not appear anywhere in the seized material or in any statement recorded during the search. 2. **The addition figure itself was not found in seized material:** The Tribunal specifically noted that the sum of ₹1,33,80,000/- treated as on-money did not appear anywhere in the seized documents — it was an amount arrived at by the AO through extrapolation, not an amount actually discovered during search. 3. **Cross-matching unrelated documents is presumptive:** Correlating an entry in LEGACY.xlsx (relating to the assessee's unit) with a brokerage pattern derived from a WhatsApp image relating to five entirely different buyers/units was held to be based on "mere presumption," not evidence. 4. **No evidence of even the cheque component:** The seized material did not contain any reference to the cheque payments made by the assessee, making it impossible to correlate or verify any part of the alleged transaction. 5. **Conjecture cannot substitute evidence:** The Tribunal reaffirmed the settled principle that additions cannot be sustained merely on surmise and conjecture, however strong the suspicion arising from the builder's overall modus operandi may be. Accordingly, the deletion of the addition of ₹1,33,80,000/- was upheld, and the Revenue's appeal was dismissed. **Conclusion** This ruling reinforces a well-established but frequently tested principle — that additions under Section 69 (or similar provisions) must rest on cogent, direct evidence linking the assessee to the alleged unexplained investment, and cannot be sustained merely because the assessee happens to be a buyer in a project where the developer's broader conduct is under a cloud. Taxpayers facing similar additions arising from search actions on developers/builders would do well to examine whether the seized material contains any direct reference to their name, payments, or admissions — the absence of which, as this ruling shows, can be decisive. --- Read the order here - *Disclaimer: This article is intended for general informational and knowledge-sharing purposes only and does not constitute legal or tax advice. Readers are advised to refer to the full text of the order and consult a qualified professional before relying on it for any specific matter.* - Tags: - [\#incometax #litigation #section69](#) ![CA Divyang J Shah](https://imageproxy.inlancer.in/pr:sharp/f:webp/rs:fit:200:0/g:sm/plain/https://bnpsca.com/public/assets/upload/images/original/6872083e9ad46-10.png)About the Author #### CA Divyang J Shah Ahmedabad Income tax Assessment & Appeals Public trust, Private Trust [View Profile ](https://bnpsca.com/partner/ca-divyang-j-shah) #### Share this on social media : [ Share ](http://www.facebook.com/sharer.php?u=https://bnpsca.com/insight/no-addition-for-on-money-merely-based-on-conjectures-and-surmises) [ Tweet ](https://twitter.com/intent/tweet?url=https://bnpsca.com/insight/no-addition-for-on-money-merely-based-on-conjectures-and-surmises) [ Post ](https://vk.com/share.php?url=https://bnpsca.com/insight/no-addition-for-on-money-merely-based-on-conjectures-and-surmises) [ post ](https://www.linkedin.com/shareArticle?mini=true&url=https://bnpsca.com/insight/no-addition-for-on-money-merely-based-on-conjectures-and-surmises) [ Share ](https://api.whatsapp.com/send?text=https://bnpsca.com/insight/no-addition-for-on-money-merely-based-on-conjectures-and-surmises) [ post ](https://reddit.com/submit?url=https://bnpsca.com/insight/no-addition-for-on-money-merely-based-on-conjectures-and-surmises) [ pin ](https://pinterest.com/pin/create/button/?url=https://bnpsca.com/insight/no-addition-for-on-money-merely-based-on-conjectures-and-surmises) ## You May Also Like Similar Articles You Might Find Interesting [ ![TDS/TCS changes from 1st October 2024](https://imageproxy.inlancer.in/pr:sharp/f:webp/rs:fit:500:0/g:sm/plain/https://bnpsca.com/public/assets/upload/images/original/688064a0140c2-466852974.jpeg) ](https://bnpsca.com/insight/tds-tcs-changes-from-1st-october-2024 "Blog Link")06-10-2024 #### [TDS/TCS changes from 1st October 2024](https://bnpsca.com/insight/tds-tcs-changes-from-1st-october-2024 "TDS/TCS changes from 1st October 2024") By nareshco [Continue Reading](https://bnpsca.com/insight/tds-tcs-changes-from-1st-october-2024) [ ![New-Income Tax Bill 2025 – Simplification ~Consolidation ~ Clarity](https://imageproxy.inlancer.in/pr:sharp/f:webp/rs:fit:500:0/g:sm/plain/https://bnpsca.com/public/assets/upload/images/original/68886745de300-image-income-tax-bil.png) ](https://bnpsca.com/insight/new-income-tax-bill-2025-%E2%80%93-simplification-consolidation-clarity "Blog Link")14-02-2025 #### [New-Income Tax Bill 2025 – Simplification ~Consolidation ~ Clarity](https://bnpsca.com/insight/new-income-tax-bill-2025-%E2%80%93-simplification-consolidation-clarity "New-Income Tax Bill 2025 – Simplification ~Consolidation ~ Clarity") By CA. 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