I-T Authorities Must Prove Authenticity Of Entries And Its Nexus With Dealer, Before Making Addition U/s 69: New Delhi ITAT
Pankaj Bajpai
12 March 2024 8:15 PM IST
On finding that the person from who's possession seized document is recovered, was not subject to cross examination of assessee and no opportunity of cross examination was given to assessee, the New Delhi ITAT deleted the addition made u/s 69 of the Income Tax Act.The Bench of the ITAT comprising of Yogesh Kumar U.S. (Judicial Member) and Dr. B.R.R. Kumar (Accountant Member) observed...
On finding that the person from who's possession seized document is recovered, was not subject to cross examination of assessee and no opportunity of cross examination was given to assessee, the New Delhi ITAT deleted the addition made u/s 69 of the Income Tax Act.
The Bench of the ITAT comprising of Yogesh Kumar U.S. (Judicial Member) and Dr. B.R.R. Kumar (Accountant Member) observed while considering the judgment of Allahabad High Court in the case of Mumar Trading Co. Vs. Commissioner of Trade Tax, 2008 taxmann.com 1672 that, “It is well settled law that the dumb documents having no evidentiary value cannot be taken as sole basis for determination of undisclosed income of the assessee. If the Department of Revenue wants to make use of dumb documents, then the onus on the Revenue Department to collect cogent corroborative evidences.” (Para 18)
As per the brief facts of the case, the assessee had purchased land during the captioned assessment years. A search was conducted on the assessee on 04/08/2016, wherein an estimated working was seized from the laptop of the employee of the assessee containing details of certain land which was registered in the name of the assessee. The assessee was asked by the A.O to file details of land purchased along with the copy of the registered deed, proof of payment along with source of investment and charges paid for registration of the plot. The AO observed that the assessee was confronted with the seized document, but assessee has not furnished any details. As assessee failed to explain the source of cash payment of Rs.1,52,45,000/-, the said amount has been computed as cash payment made for the purchase of land which has been considered as unaccounted and the same has been added by the AO to the total income of the assessee.
The Bench noted that during the search proceedings, from the laptop of an employee of the assessee company an uncompleted working was seized, wherein details of certain land which was registered/to be registered in the name of Assessee Company along with estimated costs of construction/development of said land has been reflected.
The Bench observed that the said working seized from the laptop was 'incomplete estimation' and not ending final shape as certain information still to be required to complete the said estimation.
The Bench further observed that the AO even after considering the said material as 'estimated uncompleted working', made as basis for making the addition u/s 69.
The Bench stated that the AO had not found any evidence in support of the said inference that the payment was made in cash to acquire the land.
The Bench further stated that there is no confirmation from any of the sellers or the employees in their statement recorded u/s 132(4) during the search proceedings to substantiate that the cash payment was made to acquire the land by the assessee.
The Bench found that at no point of time, the AO have made any enquiry from the seller of the land, or registering authority to substantiate that the cash payment has been made in transferring the land.
Therefore, on finding that no opportunity of cross examination was given to the assessee, ITAT allowed the assessee's appeal.
Counsel for Appellant/Taxpayer: S. S. Naagar
Counsel for Respondent/Department: Sapna Bhatia
Case Title: RSWM Ltd. verses DCIT
Case Number: ITA No.145/Del/2021
