Archive · 20 Aug 2026
ITAT Deletes ₹25 Lakh Flat Cash Tax Addition Over Evidence
The tax department said Shivaji Tukaram Pawale paid ₹25 lakh in cash for a flat.
This payment was allegedly made in addition to the declared price of ₹49 lakh.
Pawale denied making the extra payment.
The department relied on statements from two builder partners.
Pawale asked to see those statements and question the people who made them.
He was not given either opportunity.
The tribunal said this was unfair because the statements were important evidence against him.
It therefore removed the ₹25 lakh tax addition.
The tribunal also asked officials to check whether he could claim a separate interest-income deduction.
The Mumbai ITAT deleted a ₹25 lakh income addition against Shivaji Tukaram Pawale.
The addition concerned an alleged cash payment for a flat beyond the declared ₹49 lakh consideration.
The tax department relied on statements from two partners of Lakshmi Builders and Developers.
Pawale was not given copies of the statements or an opportunity to cross-examine the partners.
The tribunal also directed verification of Pawale’s separate Section 80TTA deduction claim.
- Who
- Shivaji Tukaram Pawale, the Income Tax Department, and partners of Lakshmi Builders and Developers were involved.
- What
- The Mumbai ITAT deleted a ₹25 lakh addition to Pawale’s income over an alleged flat-related cash payment.
- When
- The case concerned assessment year 2017-18; the ruling date is not stated in the article.
- Where
- The ruling was delivered by the Mumbai bench of the Income Tax Appellate Tribunal; the assessing officer was in Kalyan.
- Why
- The tribunal found that Pawale was denied access to the third-party statements and the opportunity to cross-examine their makers.
Taxpayer’s position
Tax department’s position
Alleged cash payment
Taxpayer’s position
Pawale denied paying ₹25 lakh in cash beyond the declared flat consideration.
Tax department’s position
The department alleged that Pawale paid ₹25 lakh in unreported cash, based on information from a survey of the builder’s partners.
Use of third-party statements
Taxpayer’s position
Pawale argued that he needed copies of the statements and an opportunity to cross-examine the partners before the evidence could be used against him.
Tax department’s position
The Assessing Officer relied on the partners’ statements to add ₹25 lakh to Pawale’s income, and the first appellate authority upheld the addition.
- Case
- Shivaji Tukaram Pawale vs Income Tax Officer, Ward 3(1), Kalyan
- Assessment year
- 2017-18
- Deleted addition
- ₹25 lakh under Section 69 of the Income Tax Act
- Declared flat consideration
- ₹49 lakh
- Evidence relied upon
- Statements from two partners of Lakshmi Builders and Developers
- Procedural issue
- Pawale was not given the statements or an opportunity to cross-examine the partners
- Separate tax claim
- The Assessing Officer must verify and allow the Section 80TTA deduction if Pawale is eligible