Subscribe to the Bombay Chartered Accountant Journal Subscribe Now!

August 2026

Addition for payment of on-money cannot be sustained merely on the basis of a statement which per statement per se cannot be considered as evidence against third party unless it is tested by cross examination.

By Jagdish T Punjabi, Chartered Accountant Devendra Jain & Aditya Bhatt, Advocates
Reading Time 3 mins

38. 2026(6) TMI 1385 – ITAT - Mumbai

Nitish Baburao Bhatkar v. ITO

A.Y.: 2019-20 Date of Order : 23.6.2026

Sections: 28, 132

Addition for payment of on-money cannot be sustained merely on the basis of a statement which per statement per se cannot be considered as evidence against third party unless it is tested by cross examination.

FACTS

The Assessing Officer (AO), on the basis of information obtained from the Investigation Wing that in the course of search on GNP Group, an incriminating document was found and seized, which revealed details of on-money collected by GNP Group, reopened the assessment of the assessee on the ground that the assessee has paid on-money of Rs.30 lakh for purchase of immovable property.

The assessee submitted that he had purchased the industrial unit on 27.8.2020 for a consideration of Rs.27 lakh. Payment of Rs.27 lakh plus other amounts such as development charges, etc was made by cheques, details whereof were furnished. The AO was of the view that since the particulars of the unit purchased by the assessee viz. Unit No. 7 on 1st floor matched with details me

Read More
Download PDF

You May Also Like

What the Assessing Officer could not have done directly while exercising jurisdiction under sections 147/148, the CIT(A) cannot be permitted to do indirectly while exercising powers under section 251. What cannot be done directly cannot be permitted to be achieved indirectly. Where no addition survives on the issue for which the assessment was reopened, the Revenue cannot independently assess income on issues unconnected with the reasons recorded for reopening. Power of enhancement is only ancillary to appellate jurisdiction and cannot become an independent source of jurisdiction to assess income which the Assessing Officer himself could not have assessed in the reassessment proceedings If Revenue’s argument that the CIT(A) can at any stage introduce a completely new source of income unrelated to the issue for which reassessment proceedings were initiated, is accepted, then it would virtually render the statutory limitations prescribed under sections 147 to 149 otiose.

Payment for availing Google AdWords advertising services through Google’s standardised, automated self-service platform could not be characterised as fees for managerial, technical or consultancy services under section 194J and deduction of tax at 2% under section 194C was proper.