2017 (2) TMI 1093 - AT - Income Tax

Unaccounted cash for the purchase of property - notings in the loose paper relied upon - Held that - CIT(A) has rightly concluded that on the examination of the copy of seized documents as provided together with the facts of the case and also considering the glaring mis-matches, there was an absence of independent, reliable, corroborative evidence and therefore it was rightly held by Ld. CIT(A) that the said document, in any manner cannot be held as genuine and reliable to hold that the assessee has paid unaccounted cash for the purchase of property. We are also of the considered view that in the absence of any other corroborative evidence to establish a direct nexus, it cannot be said that the notings in the loose paper are genuine and hence by virtue of said document, the AO could not have hold that undisclosed cash payment of ₹ 1,60,90,191/- has been made by the assessee with his wife. Moreover the Coordinate Bench of ITAT has already adjudicated this issue. No new circumstances or arguments have been brought on record before us by the learned DR in order to controvert or rebut the findings recorded by the learned CIT (A). Moreover, there are no reason for us to deviate from the findings recorded by the learned CIT (A). - Decided against revenue.

Issues Involved:
1. Deletion of addition made under Section 69 of the IT Act based on loose paper and mismatch of payments found during the Search Operation.
2. Consideration of super built-up area versus carpet area in the loose paper.
3. Reliability and genuineness of the loose paper seized from the construction project site.
4. Consistency of the addition made under Section 69 with the 'On Money' received from the assessee confirmed in another case.
5. General grounds for setting aside the CIT(A)'s order and restoring the AO's order.

Issue-wise Detailed Analysis:

1. Deletion of Addition under Section 69:
The revenue challenged the deletion of additions made under Section 69 of the IT Act by the CIT(A). The additions were based on loose papers found during a search operation, which allegedly showed a mismatch in payments. The CIT(A) found that the loose paper did not contain the name of the assessee, was undated, and did not bear any signatures. The CIT(A) also noted significant mismatches in the area and payment details between the loose paper and the actual transaction records. The Tribunal upheld the CIT(A)'s decision, stating that the document could not be held as genuine and reliable in the absence of corroborative evidence.

2. Super Built-up Area vs. Carpet Area:
The revenue argued that the area mentioned in the loose paper was the super built-up area, which explained the mismatch with the area in the sale agreement. The CIT(A) found that the super built-up area mentioned in the loose paper (2550 sq.ft.) did not correspond logically to the carpet area (1565.75 sq.ft.) or even the built-up area. The Tribunal agreed with the CIT(A), noting that the super built-up area calculation appeared exaggerated and unsupported by evidence.

3. Reliability and Genuineness of the Loose Paper:
The CIT(A) and the Tribunal both found that the loose paper seized could not be considered genuine and reliable. The document was undated, unsigned, and did not contain the name of the assessee. Both the purchaser and the seller denied the contents of the document. The Tribunal emphasized the absence of independent, reliable, corroborative evidence to support the addition based on the loose paper.

4. Consistency with 'On Money' Received:
The revenue argued that the addition under Section 69 should be consistent with the 'On Money' received from the assessee, which was confirmed in another case involving M/s Layer Exports Pvt. Ltd. The Tribunal noted that similar additions based on the same loose sheets were deleted in the builder's case and the assessee's own case for AY 2007-08. The Tribunal found no reason to deviate from these findings and upheld the CIT(A)'s decision to delete the addition.

5. General Grounds:
The revenue's general grounds for setting aside the CIT(A)'s order and restoring the AO's order were dismissed as they were found to be general in nature and required no specific adjudication.

Conclusion:
The Tribunal upheld the CIT(A)'s decision to delete the additions made under Section 69 of the IT Act. The Tribunal found the loose paper unreliable and unsupported by corroborative evidence. The appeals filed by the revenue were dismissed, and the CIT(A)'s order was upheld. The Tribunal emphasized the importance of reliable and corroborative evidence in making additions under the IT Act.

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