2018 (2) TMI 1146 - AT - Income Tax

Income from undisclosed sources - cash component appearing in the Excel sheets seized from the premises of M/s AEZ group - incriminating material found in search - Held that - The addition has been upheld by the Ld. CIT(A) mainly only on the basis of (i) details recorded in Excel sheet on hard disk found during the course of search at M/s AEZ group, wherein the payment through cheque and cash been mentioned against the name of the assessee at Serial No. 30 of the list (ii) the surrender made by Sh. I.E. Soomar, whose name was appearing at Serial No. 39 of the list (iii) the said hard disk cannot be relied upon in part as the assessee has admitted the payment through cheque but denied the cash payment therein. In view of the identical facts of the case of the assessee and the case of Sh. Subhash Khattar (2017 (7) TMI 1091 - DELHI HIGH COURT) we hold that addition cannot be made in the case of assessee without corroborating evidences, merely on the basis of surrender made by Sh. I.E. Soomar i.e. third-party and accordingly, we set aside the orders of the lower authorities and direct the Assessing Officer to delete the said addition - Decided in favour of assessee.

Summary

Issues Involved:
1. Addition of ?25,20,884/- as income from undisclosed sources.
2. Validity of the addition based on evidence from a third-party search.
3. Consideration of evidence provided by the appellant.
4. Legality of the assessment and addition under section 153A of the Income-tax Act.

Issue-wise Detailed Analysis:

1. Addition of ?25,20,884/- as Income from Undisclosed Sources:
The appellant contested the addition of ?25,20,884/- made by the Assessing Officer (AO) as income from undisclosed sources. The AO's decision was based on an Excel sheet seized during a search at the premises of M/s AEZ Group, which recorded both cheque and cash payments from the appellant for booking space in the "Indirapuram Habitat Centre" project. The appellant denied making any cash payment and argued that no corroborative evidence was found during the search at their premises. The Tribunal noted that similar additions were deleted in the case of Sh. Subhash Khattar, where the Tribunal held that no addition could be made under section 153A in the absence of incriminating documents found during the search.

2. Validity of the Addition Based on Evidence from a Third-Party Search:
The Tribunal examined whether the addition of ?25,20,884/- was justified based on the Excel sheet found at M/s AEZ Group's premises. The Tribunal referred to the case of Sh. Subhash Khattar, where it was held that additions could not be made solely based on third-party evidence without corroborative evidence. The Tribunal emphasized that the mere appearance of the appellant's name in the Excel sheet, without independent corroborative evidence, was insufficient to justify the addition.

3. Consideration of Evidence Provided by the Appellant:
The appellant provided several pieces of evidence, including an affidavit stating that no cash payment was made, and pointed out that no documents evidencing cash payment were found during the search at their premises. The Tribunal noted that the evidence found at the third-party premises was insufficient to substantiate the addition, especially when the appellant had denied the cash payment and no corroborative evidence was found.

4. Legality of the Assessment and Addition under Section 153A:
The Tribunal addressed the legality of the assessment under section 153A. It referred to the decision in the case of Sh. Subhash Khattar, where it was held that in the absence of incriminating material found during the search at the appellant's premises, the assessment under section 153A could not be justified. The Tribunal reiterated that the addition could not be sustained merely based on third-party evidence without corroborative evidence.

Conclusion:
The Tribunal concluded that the addition of ?25,20,884/- could not be justified without corroborative evidence. It set aside the orders of the lower authorities and directed the AO to delete the addition. The Tribunal allowed the appeal of the assessee, aligning with the findings in the case of Sh. Subhash Khattar and emphasizing the need for independent corroborative evidence to support such additions.

Result:
The appeal of the assessee was allowed, and the addition of ?25,20,884/- was deleted. The decision was pronounced in the open court on 13th February 2018.