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2016 (5) TMI 331 - AT - Income TaxAddition on Cash received - addition made based on a document found at the premises of M/s. R.R. Movie Makers when there was a search at their premises - Held that - Since the evidentiary value of the document was certainly examined it was held that in the absence of any corroborative evidence, the same will not have any evidentiary value. The Revenue did not establish that the said document was not prepared for distribution purposes. It is also on record that assessee in the statement recorded subsequent to the search also denied the document or receipt of the payments. Presumption u/s 292C - The reliance on Section 292C by the AO and CIT(A) is also not correct. Provisions of Section 292C are applicable in a case where a search was conducted or certain documents were requisitioned. The provisions were applicable only in the hands of the searched person. Assessee having been not covered by the provisions of Section 132 or 132A, the said provisions of 292C does not apply. Moreover, the assessment order was not passed even u/s. 153C. Therefore, the addition cannot be sustained in the hands of assessee only because certain documents stated to have been filed for the purpose of marketing the cinema and not the actual expenditure cannot be considered for making an addition in the hands of assessee. Accordingly, the grounds of assessee are allowed, the addition so made is deleted. - Decided in favour of assessee
Issues:
Appeal against Commissioner of Income Tax (Appeals) order - Addition of cash received from M/s. R.R. Movie Makers - Applicability of Section 292C of the Income Tax Act - Confirmation of addition by CIT(A) - Comparison with similar case - Reliance on seized documents - Evidentiary value of seized documents - Application of Section 292C - Assessment without search or requisition under Section 132 or 132A. Analysis: The appeal pertains to the addition of ?10,00,000 in the assessee's income based on cash received from M/s. R.R. Movie Makers, as per a document found during a search at their premises. The CIT(A) upheld the addition, prompting the appeal before the ITAT. The key issue was the applicability of Section 292C, which allows inferences from seized documents. The assessee argued against its applicability, citing lack of evidence and denial by the alleged payer. The ITAT considered a similar case where the addition was deleted due to insufficient evidence and lack of correlation to the assessment year. The ITAT emphasized the importance of corroborative evidence and the chronological order of payments in the seized document. The ITAT concluded that the addition could not be sustained due to insufficient evidence and lack of linkage to the assessment year. The ITAT also addressed the misuse of Section 292C by the AO and CIT(A), emphasizing its applicability only to searched persons. Since the assessee was not covered under Sections 132 or 132A, Section 292C did not apply. Moreover, the assessment was not conducted under Section 153C. The ITAT ruled that documents meant for marketing purposes, not actual expenditure, could not be the basis for additions. Consequently, the ITAT allowed the assessee's appeal and deleted the addition. In summary, the ITAT's judgment focused on the lack of evidentiary value in seized documents, the chronological order of payments, and the incorrect application of Section 292C. The ITAT emphasized the need for corroborative evidence and proper linkage to the assessment year for any additions. The ITAT's decision highlighted the importance of adhering to legal provisions and ensuring a fair assessment process based on concrete evidence.
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