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2013 (11) TMI 365 - AT - Income TaxPresumption u/s. 292C of the Act to apply to only the person, who is searched Presumption as to assets, books of account, etc. - Search u/s 132 was conducted on third party Addition made on the basis of search Held that - Document in question was seized from the possession of one Mr. Sohanraj Mehta. The seized document makes a reference to the name of the assessee and a figure of Rs.22.75 lakhs appears against his name - There is no basis set out in the order of the AO for coming to the conclusion that the seized document evidences receipt of money by the assessee from Sohanraj Mehta. The presumption u/s. 292C of the Act is only with reference to the person searched and it cannot be extended to the assessee. There is no corroborative evidence or statement of Sohanraj Mehta relied upon by the AO, to the effect that a sum of Rs.22.75 lakhs was paid to the assessee. The assessee has categorically denied having received any payment from Sohanraj Mehta - Even in the proceedings before the AO, when the assessee was examined, he had taken the same stand. The details called for in the scrutiny assessment did not call for any specific details on the seized document or receipt of cash based on the seized document Decided against the Revenue.
Issues:
- Appeal by the revenue against the order of CIT(Appeals)-II, Bangalore for assessment year 2004-05. - Delay in filing the appeal. - Addition of Rs 22,75,000 made by the AO. - Justification of the deletion of the addition by CIT(Appeals). - Interpretation of seized document and evidence. - Application of section 132(4A)(ii) and section 292C of the Act. - Lack of corroborative evidence and statements. Analysis: 1. Delay in filing the appeal: The revenue appealed against the order of CIT(A) for the assessment year 2004-05. There was a delay of 57 days in filing the appeal, which was explained by the DCIT, Circle 5(1) Bangalore. The appeal was initially filed in the wrong office but was later corrected and filed before the Asst. Registrar, ITAT, Bangalore on 27.11.2012. The Tribunal condoned the delay, considering it occurred due to a reasonable cause. 2. Addition of Rs 22,75,000 by the AO: The AO initiated reassessment proceedings against the Assessee based on the belief that the Assessee had received Rs 22,75,000 from Mr. Sohanraj Mehta. However, the Assessee denied receiving this amount and provided explanations regarding legitimate earnings from services rendered to Dhariwal Industries Ltd. The AO relied on the presumption under section 132(4A)(ii) of the Act, stating that any document found during a search can be presumed true. 3. Justification of deletion of the addition by CIT(Appeals): The CIT(Appeals) deleted the addition made by the AO based on the lack of evidence supporting the alleged receipt of Rs 22,75,000 by the Assessee. The CIT(Appeals) noted that the AO did not provide substantial evidence or corroborative proof to substantiate the claim. The Assessee's denial, lack of specific details in the scrutiny assessment, and absence of statements from Sohanraj Mehta were crucial factors in the deletion of the addition. 4. Interpretation of seized document and evidence: The seized document found during a search of Mr. Sohanraj Mehta contained an entry showing Rs 22,75,000 against the Assessee's name. However, the Tribunal questioned whether this document truly indicated payment to the Assessee and highlighted the absence of a clear basis for the AO's conclusion regarding the alleged receipt of money by the Assessee. 5. Application of section 132(4A)(ii) and section 292C of the Act: The Tribunal emphasized that the presumption under section 292C of the Act applies only to the person searched and cannot be extended to the Assessee. The lack of corroborative evidence or statements from Sohanraj Mehta regarding the payment further weakened the AO's case. 6. Lack of corroborative evidence and statements: The Tribunal concluded that the AO failed to provide substantial evidence to prove that the Assessee received Rs 22,75,000 from Sohanraj Mehta. The Assessee's consistent denial, coupled with the absence of supporting documentation or statements, led to the deletion of the addition by the CIT(Appeals. In conclusion, the Tribunal dismissed the revenue's appeal, affirming the CIT(Appeals)'s decision to delete the addition of Rs 22,75,000 due to the lack of concrete evidence supporting the alleged receipt by the Assessee.
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