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2025 (4) TMI 211 - AT - Income TaxUndisclosed investment in the plot jointly purchased by assessee with her father - certain digital data was extrapolated from the Mobile data of the assessee wherein the purchase consideration of plot purchased by the assessee and her father having share each and the total consideration as per Mobile Images were worked out by the AO - HELD THAT - The figures in the Mobile images have been extrapolated without any reason. No addition could be made on account of such Mobile data or loose paper in the absence of corroborative evidence for which the reliance has been placed by assessee on Bombay High Court different Benches of the ITAT and further reliance on the judgment of Hon ble Apex Court in the case of Common Cause 2017 (1) TMI 1164 - SUPREME COURT are quite apt. Copy of the statement as recorded of the seller the assessee and other co-owner have been recorded and they have undisputedly stated before the PBPT that no payment of on money have been made and no adverse view have been taken by the department in the hands of seller or in the hand of Sh. Manjeet Singh at all. The said fact has already been stated by the assessee in his argument before the Ld. CIT(A) and thus when no adverse conclusion have been drawn in the hands of seller and also that the figures in the Mobile data have been extrapolated and no adverse view has been taken in benami proceedings in the case of the assessee the addition as confirmed cannot be sustained. Addition on account of cash as seized during the course of search - Since there are six members of the family who are all filing their returns of income and the assessee himself is an engineer and she is having her own business there is no justification of sustaining the addition of Rs. 3 lacs as confirmed by the Ld. CIT (A).
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Addition Based on WhatsApp Messages and Mobile Data Relevant Legal Framework and Precedents: The court examined precedents such as K.P. Varghese vs. ITO, which places the burden of proof on the revenue in cases of alleged understatement or concealment in registered title deeds. The court also considered judgments from the Bombay High Court and ITAT that emphasize the need for corroborative evidence when relying on loose papers or digital data. Court's Interpretation and Reasoning: The court found that the addition was primarily based on WhatsApp messages and mobile data images, which were not corroborated by any independent evidence. The court emphasized that digital data alone, without corroborative evidence, lacks sufficient evidentiary value. Key Evidence and Findings: The statements of the seller and co-owner confirmed that the purchase was made as per the registered deed, with no 'on money' involved. The court noted the absence of any corroborative evidence from the revenue to support the extrapolated figures from the mobile data. Application of Law to Facts: The court applied the principles from previous judgments, concluding that the addition based on digital data without corroborative evidence is unsustainable. Treatment of Competing Arguments: The court acknowledged the revenue's argument that the mobile data indicated undisclosed investment but found it insufficient without corroborative evidence. Conclusions: The court concluded that the addition based on WhatsApp messages and mobile data could not be sustained due to the lack of corroborative evidence. 2. Cash Seized During Search Operation Relevant Legal Framework and Precedents: The court considered the principles of assessing cash found during searches, particularly the need to consider the context and family circumstances. Court's Interpretation and Reasoning: The court noted that the cash seized was claimed to be family savings, and all family members were filing tax returns. The court found the amount negligible given the family size and their income sources. Key Evidence and Findings: The court considered the fact that the family had multiple income sources and that the cash amount was reasonable for a family of their size. Application of Law to Facts: The court applied the principles of assessing cash in the context of family savings and concluded that the addition was unjustified. Treatment of Competing Arguments: The court found the revenue's argument for the addition unconvincing in light of the family's financial context. Conclusions: The court concluded that the addition of Rs. 3 lacs as undisclosed income was not justified and should be deleted. SIGNIFICANT HOLDINGS Core Principles Established:
Final Determinations on Each Issue:
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