2019 (4) TMI 569 - HC - Income Tax

Addition on account of unexplained cash payment - based on on loose sheets - seized from the premises of a third person and not written by the assessee - as per CIT-A and ITAT document in question does not contain any signature and date, and the word cash is nowhere mentioned on the seized document - HELD THAT - Having regard to the facts as emerging from the record as well as the contents of the seized documents, there is nothing to connect the assessee with the contents thereof. The relied upon documents have not been seized from the assessee and on the basis of some noting made by a third party, no conclusion could be drawn that the same pertain to the assessee, more so, when the seized documents nowhere refer to the assessee. Having regard to the material on record, this court does not find any infirmity in the concurrent findings of fact recorded by the Tribunal after appreciating the material on record - No substantial question of law warranting interference. - Decided against revenue.

Summary

Issues:
1. Appeal under section 260A of the Income Tax Act, 1961 challenging the order passed by the Income Tax Appellate Tribunal.
2. Disallowance of unexplained cash payment made by the assessee.
3. Reliance on the judgment of the Honorable Supreme Court in a similar case.

Analysis:

Issue 1:
The appellant-revenue challenged the order of the Income Tax Appellate Tribunal regarding the deletion of disallowances amounting to ?2,07,81,390 made by the Assessing Officer on account of unexplained cash payment by the assessee. The Tribunal upheld the decision of the Commissioner (Appeals) in favor of the assessee. The appellant contended that the seized documents were reliable and sufficient to establish the liability of the assessee based on matching details with the land dealings. However, the Commissioner (Appeals) found that the seized documents did not conclusively prove the cash payment by the assessee. The Tribunal concurred with the Commissioner (Appeals) and emphasized the need for corroborative evidence to make additions towards undisclosed income.

Issue 2:
The primary contention revolved around the authenticity and evidentiary value of the seized documents. The appellant argued that the contents of the seized documents, including specific land details and payment amounts, were sufficient to implicate the assessee. However, both the Commissioner (Appeals) and the Tribunal found that the seized documents lacked crucial information such as signatures, dates, and explicit mention of cash payments. Relying on the Supreme Court judgment in C.B.I. v. V.C. Shukla, the Tribunal ruled that loose sheets cannot be considered conclusive evidence for making additions towards undisclosed income without further substantiation.

Issue 3:
The appellant also raised the issue of the Tribunal's reliance on the Supreme Court judgment in C.B.I. v. V.C. Shukla. The Tribunal justified its decision by emphasizing the need for corroborative evidence to support the seized documents' contents. Both the Commissioner (Appeals) and the Tribunal highlighted the absence of essential details and explicit references to cash payments in the seized documents, leading to the dismissal of the appellant's appeal.

In conclusion, the High Court upheld the Tribunal's decision, emphasizing the lack of conclusive evidence connecting the seized documents to the assessee. The court found no grounds to question the concurrent findings of fact by the Tribunal and dismissed the appeal, stating that no substantial question of law warranted interference.