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2021 (6) TMI 247 - AT - Income TaxAddition based on loose sheets found during the search - on money payment - HELD THAT - It is settled issue that loose sheets does not convey any meaning without having corroborative evidence. In the instant case, though certain notings were made with regard to cash payment, however, no details were mentioned with regard to plot number, payer, payee and the purpose of payment etc. The assessee has denied having made any payment over and above the sale consideration recorded in the sale deed. Unless there is tangible evidence, merely on the basis of loose sheet which does not have any details do not convey any meaning for making the addition. It is settled issue that the sale consideration recorded in the sale deed needs to be adopted for the purpose of payments made to the vendor as decided in case of Paramjit Singh Vs. ITO 1996 (3) TMI 120 - PUNJAB AND HARYANA HIGH COURT - Thus we hold that the Ld. CIT(A) has rightly deleted the addition - Decided against revenue. Addition u/s. 69A for on money payment - CIT- A deleted the addition - HELD THAT - As rightly observed by the Ld. CIT(A), the AO relied on the loose sheet for assuming the payment of cash consideration over and above the registered amount as per the registered sale deed, however, there was no corroborative evidence or material found during the course of search. The said loose sheet did not give any details with regard to actual payment, the name of purchaser and the vendor. The assessee denied having made the payment over and above the registered sale deed. He explained the notings on loose sheet are rough notings but not the actual payments. No other corroborative evidence was found by the AO to assert that the payment was made over above the consideration recorded on sale deeds. The legal validity of notings on a loose sheet without having the corroborative evidence has come up before the coordinate bench of ITAT, Amritsar in the case of Smt. Harmohinder Kaur 2020 (1) TMI 1459 - ITAT AMRITSAR as held that without the corroborative evidence, to prove the authenticity of diary seized during the course of search, the AO could not make addition in assessee's income on the basis of notings in the diary. Thus we, hold that in the absence of corroborative evidence to support the payment of on money merely on the basis of some notings on loose papers, the addition made by the AO is unsustainable. Addition u/s. 69C - HELD THAT - In the case of the assessee no other evidence was found indicating incurring of expenditure estimated by the AO. The assessee has explained the contents of the diary as cash inflow and out flow of M/s. Phozo Digital Press (P) Ltd. which was not controverted by the AO with the tangible evidence. In fact, the AO has acknowledged in assessment order that the cash inflows are related to the company. Therefore, if the contents of the diary and the explanation of the assessee considered together, no addition is warranted in this case. Thus we hold that there is no case for making the addition u/s. 69C on the basis of the notings made in scribbling pad in the hands of the assessees and hence, we, uphold the order of the Ld. CIT(A) and dismiss the appeals of the revenue. Addition u/s. 69A r.w.s.115BBE - cash found was from the undisclosed sources - HELD THAT - There is no dispute that the assessee has admitted the additional income for the A.Y. 2017-18 and the assessee stated that the cash found during the course of search was belonged to the company M/s. Phozo Digital Pvt. Ltd. and it was the practice to keep cash with the directors of the company in their residences. Since, search u/s. 132 was conducted in the residence and the business premises and no evidence was found evidencing application of additional income admitted by the assessee, either in the hands of the company or in the hands of the directors, we do not find any reason to reject the telescopic benefit requested by the assessee. Hence, we find no reason to interfere with the order of the Ld. CIT(A) and the same is upheld. Appeal of the revenue on this ground is dismissed. Addition of unexplained jewellery u/s. 69C - HELD THAT - From the facts of the case it is revealed that the assessee explained the source of jewellery as streedhan of two married family members and unmarried female members as well as gifts received on various occasions. It is also customary to receive gifts by female members on various occasions and functions related to the female child, more so in the states of Andhra Pradesh and Telangana. Thus, the source of jewelry to the extent of minimum threshold as per Board Circular No. 1916 stands explained by the assessee. Therefore, we hold that the Ld. CIT(A) rightly deleted the addition placing reliance on Board circular and the decision of this Tribunal in the case of Suresh Kumar Jain 2019 (12) TMI 1186 - ITAT VISAKHAPATNAM Addition on account of gold bars - Assessee explained during the course of search that gold bars were related to the company, kept in assessee's house. The AO made the addition for want of evidence in the form of entries in the books of accounts. Since the gold bars were purchased from the undisclosed income declared in the hands of the company, naturally no evidence would be available, since the same was acquired out of unexplained sources. Therefore expecting the evidence for the application of undisclosed income is unreasonable and ambitious. The assessee has requested for telescopic benefit from the additional income declared in the hands of the company in earlier assessment years and the same is justified. Therefore, we hold that the Ld. CIT(A) has rightly allowed the telescopic benefit and no interference is called for in the order of the Ld. CIT(A).
Issues Involved:
1. Condonation of Delay 2. Addition of ?10,08,315/- for On Money Payment for Purchase of Plot 3. Addition of ?6,04,800/- for On Money Payment for Purchase of Villa 4. Addition of ?60,00,000/- for Unexplained Expenditure 5. Addition of ?37,00,000/- for Unexplained Cash Seized 6. Addition of ?56,45,783/- for Unexplained Gold Jewellery Condonation of Delay: The appeals were filed by the assessee on 08.01.2021, beyond the due date of 27.12.2020. The Hon'ble Supreme Court extended the limitation period due to the COVID-19 pandemic by 90 days from 15.03.2021. Therefore, the appeals were treated as filed within the limitation period and admitted. Addition of ?10,08,315/- for On Money Payment for Purchase of Plot: The AO made an addition of ?10,08,315/- under Section 69 of the Act, based on seized loose sheets indicating on money payment for plots. The assessee denied any cash payment over the registered sale consideration of ?6,42,000/-. The CIT(A) deleted the addition, stating that the loose sheets lacked specific details and corroborative evidence. The Tribunal upheld the CIT(A)'s decision, citing that without tangible evidence, the sale consideration recorded in the sale deed should be adopted, referencing the case of Paramjit Singh Vs. ITO and ITAT, Hyderabad's decision. Addition of ?6,04,800/- for On Money Payment for Purchase of Villa: The AO added ?6,04,800/- as undisclosed income based on loose sheets indicating a higher payment rate for plots. The CIT(A) deleted the addition, noting the lack of corroborative evidence. The Tribunal upheld this decision, emphasizing that the loose sheets alone, without corroborative evidence, cannot substantiate the addition, referencing ITAT, Amritsar's decision in Smt. Harmohinder Kaur Vs. Dy. CIT and other similar cases. Addition of ?60,00,000/- for Unexplained Expenditure: The AO made an addition of ?60,00,000/- per director based on notings in a scribbling pad found during the search, indicating undisclosed expenditure. The CIT(A) deleted the addition, stating that the notings were explained as cash handled by the company and duly accounted for. The Tribunal upheld this decision, referencing ITAT, Amritsar's decision and other similar cases, stating that without corroborative evidence, the notings on loose sheets cannot justify the addition. Addition of ?37,00,000/- for Unexplained Cash Seized: The AO added ?37,00,000/- seized from the assessee's residence as unexplained income under Section 69A, rejecting the request for telescopic benefit. The CIT(A) allowed the telescopic benefit, noting that the cash belonged to the company and was part of the additional income declared earlier. The Tribunal upheld this decision, stating that in the absence of evidence of other utilization, the telescopic benefit is justified. Addition of ?56,45,783/- for Unexplained Gold Jewellery: The AO added ?56,45,783/- for unexplained gold jewellery found during the search. The CIT(A) allowed part of the jewellery as streedhan and gifts as per CBDT Circular No. 1916 and allowed telescopic benefit for the rest. The Tribunal upheld this decision, noting the customary nature of receiving jewellery as gifts and the absence of evidence for other utilization of the declared income. Conclusion: The Tribunal dismissed the appeals filed by the Revenue and upheld the orders of the CIT(A) in all the issues, emphasizing the necessity of corroborative evidence for making additions based on loose sheets and notings. The cross objections filed by the assessees were dismissed as infructuous.
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