No cash in his possession, no receipts, no matching bank withdrawals. That was the gap the Mumbai bench of the Income Tax Appellate Tribunal found in the tax department’s case against Sanjeet Kumar Kedarnath Gupta, and it was enough to wipe out a ₹90 lakh addition to his income, Mint reported on June 28, 2026.
Gupta bought a commercial unit in GNP Galaxy Phase I with his brother. The agreement, dated 6 August 2020, put the price at ₹50 lakh. On 23 September 2021 the department searched the GNP Group and its associated entities. Officials took away loose papers and electronic records that allegedly listed payments from buyers. On that basis the department said Gupta had paid ₹90 lakh in cash, so-called “on-money,” on top of the registered price, and reopened his assessment for AY2019-20.
Gupta denied it. Everything he paid, he said, went through banking channels. The papers belonged to the developer, he argued, and could not by themselves count as evidence against him.
What the tribunal found
The bench agreed. The department had produced no independent evidence that the cash changed hands, it held. Gupta was neither the author nor the custodian of the seized documents. The department had also relied on statements from people linked to the developer, but never let Gupta cross-examine them before making the addition.
The tribunal leaned on the Supreme Court’s decision in KP Varghese vs ITO for the point that the burden of proving undisclosed income sits with the Income Tax Department. A taxpayer cannot be made to prove a negative, the bench said. It also held that Section 69A, the provision on unexplained money, did not apply, because nothing unexplained was found with Gupta and nothing tied him to the alleged payment.
Two more Supreme Court rulings, Common Cause vs Union of India and CBI vs V.C. Shukla, back the view that entries in loose papers or private records cannot establish liability alone. The tribunal also cited the Bombay High Court in Ashok Commercial Enterprises vs ACIT, which held that additions cannot rest solely on third-party documents or statements.
The wider point for taxpayers
Mint described the order as reinforcing a principle for anyone facing reassessment after a search. Papers recovered in a search can justify a closer look. They cannot automatically be treated as proof that a buyer paid on-money. Before alleging undisclosed income, the department has to establish the transaction through credible, independent evidence.
