2020 (4) TMI 775 - AT - Income Tax

Addition on account of payment of undisclosed commission - onus of explaining the seized document - addition based on some computer generated loose sheets which was seized and found from the computer - HELD THAT - It is also an admitted fact that name of the assessee nowhere appeared in the said document albeit the name of Smt. Vineeta Chaurasia that she has entered into an agreement for sale of commercial property in Vasant Square Mall has been mentioned. Apart from that, the aforesaid finding of the Ld. CIT(A) that this addition cannot be made in the hands of the assessee for the reason that, firstly , the name of the assessee is not mentioned in the seized document; secondly , there is no corroborative evidence or any statement that the payment has been received by the assessee other than cheque amount as entered in the sale agreement; and lastly , on the bare perusal of the document it cannot be inferred or concluded that seized document belongs to or has any nexus with the assessee. Once on exactly same seized document the Hon ble High Court VINITA CHAURASIA 2017 (5) TMI 992 - DELHI HIGH COURT has decided this issue that this document does not belong to Mrs. Vineet Chaurasia nor any adverse inference can be drawn, therefore, in the case of the assessee whose name is not even was mentioned in the seized documents, no addition can be made. Accordingly, the said addition is deleted and the order of the Ld. CIT(A) is confirmed. - Decided in favour of assessee.

Summary

Issues Involved:
1. Deletion of addition made on account of payment of undisclosed commission.
2. Onus of explaining the seized document.
3. Evidence brought on record by the Assessing Officer (AO).
4. Validity and sustainability of the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)].

Issue-wise Detailed Analysis:

1. Deletion of Addition Made on Account of Payment of Undisclosed Commission:
The Revenue challenged the deletion of an addition of ?16,42,68,522/- made on account of an alleged undisclosed commission payment to Mrs. Vinita Chaurasia. The AO inferred that the amount was received by the assessee as payment otherwise than by cheque for the sale of commercial space in Vasant Square Mall. However, the CIT(A) found that the seized document was a computer-generated loose sheet not found from the computer of Mr. Lalit Modi or any authorized person of the company. The document mentioned Mrs. Vinita Chaurasia but not the assessee. The assessee received the agreed amount through cheque, and there was no corroborative evidence to prove the receipt of the alleged undisclosed amount. Mrs. Vinita Chaurasia also denied making any payments other than those agreed upon. The Tribunal in Mrs. Vinita Chaurasia's case had deleted a similar addition, finding it to be based on unsubstantiated jottings on a loose sheet.

2. Onus of Explaining the Seized Document:
The CIT(A) held that the onus of explaining the seized document was not on the assessee, as the document was found from Mr. Lalit Modi's premises. Mr. Lalit Modi explained that the document contained rough calculations and was of no relevance. The CIT(A) concluded that the document did not belong to the assessee and could not be used to substantiate the addition made by the AO.

3. Evidence Brought on Record by the Assessing Officer (AO):
The CIT(A) observed that the AO did not bring any independent material to substantiate the addition. The seized document did not mention any cash receipt from Mrs. Vinita Chaurasia by the assessee. The AO's addition was based on surmises, suspicion, and conjectures without corroborative evidence. The Tribunal and the Hon'ble High Court in Mrs. Vinita Chaurasia's case found the addition unsustainable due to the lack of supporting evidence.

4. Validity and Sustainability of the Order Passed by the Commissioner of Income Tax (Appeals) [CIT(A)]:
The Tribunal upheld the CIT(A)'s order, finding it well-reasoned and based on the lack of corroborative evidence. The Hon'ble High Court dismissed the Revenue's appeal, affirming that the seized document did not belong to Mrs. Vinita Chaurasia and could not be used to draw adverse inferences. The Supreme Court also dismissed the Revenue's SLP. The Tribunal confirmed that no addition could be made in the assessee's case based on the same seized document, as the name of the assessee was not mentioned, and no evidence supported the AO's claims.

Conclusion:
The Tribunal dismissed the Revenue's appeal, confirming the deletion of the addition of ?16,42,68,522/- made by the AO. The CIT(A)'s order was upheld, and the Tribunal found no basis for the addition, as it was based on unsubstantiated jottings on a loose sheet without corroborative evidence. The findings of the Hon'ble High Court and the dismissal of the Revenue's SLP by the Supreme Court further supported the Tribunal's decision.