ITAT Deletes Rs. 70 Lakh Addition on Cash Property Purchase, Citing Lack of Evidence
The present appeal has been filed by Deepti Shreyas Talpade (Appellant) in the Income-Tax Appellate Tribunal (ITAT) “D” Bench, Mumbai, before Shri Beena Pillai (Judicial Member) and Smt Renu Jauhri (Accountant Member), against the ITO Ward 24(1)(5) (Respondent). The case was heard on October 13, 2025, and the final decision was announced on October 31, 2025. The matter relates to the assessment year 2011-12. The appeal has been filed challenging an order dated February 20, 2023, issued by the Learnt Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre, Delhi.
It has been noted that the current appeal has been filed 380 days late. Therefore, the assessee has submitted an affidavit and application praying for condonation of delay, giving the reason that her husband was not well and therefore had to undergo Angioplasty in December 2023. Angioplasty is a procedure to open narrowed or blocked coronary arteries, often caused by a buildup of plaque. In this process, doctors guide a long, thin tube with a balloon at the tip to the area of blockage. This is done to restore blood flow in the blocked area. Due to this reason, they were not able to pay attention to the matter during this period. The authority condoned the delay prayed for by the assessee and accepted her appeal, as the reason was genuine (bona fide reason).
On December 03, 2011, the assessee filed her income tax return (ITR) for the A.Y. 2011-12, disclosing a total income of Rs. 11,50,550. When the assessing officer took the matter for assessment, it added an extra amount of Rs. 70 lakh to the income of the assessee, claiming that she paid this amount in cash (beyond the registered value) when buying a house in the Cosmos Regency project, Thane. She assumed this income was “unaccounted for” and made a “protective addition” under Section 69B (unexplained investment).
The tax authority reopened the case based on information from a search (Under Section 132) on the Cosmos Group. They believed Ms Talpade paid Rs 70 lakh in cash (on top of a registered value of Rs 29.50 lakh) for the property. However, the assessee denied the claim of the tax authority and said she paid the entire purchasing amount by cheque, according to the agreement.
The assessing officer (AO) did not accept her claim and still added Rs 70 Lakh to her income on a protective basis (as the same was already added in her husband’s case). Previously, the same addition was done to the income of the assessee’s husband, i.e., Shreyas Talpade, in his case relating to the same property. However, in his case, the ITAT had already ruled that the allegations of the cash payment were baseless.
When the case was taken before the ITAT Mumbai, the tribunal examined all the real estate documents and discovered that the flat was spread over an area of 710 square feet and its stamp duty value was only Rs. 15.38 lakh (not Rs. 70 lakh). The registered purchase amount was Rs. 29.50 lakh, paid by cheque and bank loan. The tribunal endorsed the assessee’s claim that the purchase payment was made via cheque, not through cash, and the addition by the AO was based only on suspicion, not evidence. Hence, the tribunal deleted the Rs. 70 lakh addition to her income. Meaning, the appeal has been allowed.
Citation: Deepti Shreyas Talpade Vs ITO Ward 24(1)(5) (ITAT Mumbai); ITA No.272/MUM/2025; 31/10/2025; 2011-12
Refer to the official judgement for complete information.
