> **Order:** ITA Nos. 7061 & 7062/Mum/2025 (ITAT Mumbai), Assessment Years 2019-20 and 2020-21, pronounced 23.02.2026.

## Facts

The assessee challenged a Rs.6,00,000 addition under section 69, made on the allegation of cash paid over the registered value for a property purchased from a builder.
The addition rested on a search under section 132 on a builder group, where electronic data in a pen drive seized from a third party's premises contained entries purportedly indicating receipt of cash on-money from customers including the assessee; the Assessing Officer issued section 142(1)/153C notices on that basis.
The assessee denied any cash payment and furnished the registered sale agreement and bank statements.

## Issue

Whether a section 69 addition can rest solely on third-party search material without corroboration or cross-examination.

## Holding

The Tribunal recorded that no statement relied upon was provided to the assessee, none of the deponents was produced for cross-examination, and even the extracts in the assessment order did not name the assessee.
Denial of cross-examination of witnesses whose statements are relied upon breaches natural justice and renders the order a nullity, and additions made solely on third-party information without further scrutiny or cross-examination are bad in law.
Taking the facts and coordinate-bench decisions on the identical issue in the same group, it directed the Assessing Officer to delete the addition and allowed the grounds.
The finding applies mutatis mutandis to the second appeal, both appeals were allowed, and the order was pronounced on 23.02.2026.

## Why a client would care

A 153C on-money addition built only on somebody else's seized data is tested on two questions: was there corroboration, and was cross-examination given — absent both, the addition fails on this reasoning.

## Questions clients ask

**Q1. An addition rested solely on a third party’s seized data. Did it survive?**

No — it was directed to be deleted in both years.

**Q2. What was wrong with that reliance?**

No statement relied on was furnished, no deponent was produced for cross-examination, and the extracts did not even name the assessee.

**Q3. What follows from denying cross-examination?**

The Tribunal held it breaches natural justice and renders the order a nullity.

## Disclaimer

*This note summarises a Tribunal order for general information. It is not professional advice and does not predict the outcome of any other case. Tax and company-law positions depend on facts and dates; take a written opinion before you act. Harun Raaj & Associates is a Chartered Accountants firm in Visakhapatnam.*

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