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TMI Blog2014 (9) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... unjab Vigilance Bureau. 4. The CIT(A) has erred in law by deleting the addition to the tune of Rs. 34,83,206/- made on account of unexplained cash credits/ deposits." 3. The solitary issue emerging from the aforesaid grounds, is regarding additions of Rs. 34,83,206/- representing unexplained cash credit/debits held as income of the assessee. 4. The factual matrix is that the assessee filed her return of income for the assessment year under consideration on 08.08.2002, declaring a total income of Rs. 10,92,888/-. The return filed by the appellant was processed u/s 143(1) of the Income Tax Act, 1961 (herein after „the Act‟) which was not taken up for scrutiny and hence no order u/s 143(3) of the Act was passed. Thereafter, the AO received an information from the Assistant Commissioner of Income-tax, Central Circle-5, New Delhi vide letter dated 25.03.2009, whereby it was informed that one Sh. Chetan Gupta, R/o Maharani Bagh, New Delhi was arrested on 17.05.2007 vide FIR No. 5 dated 23.03.2007 by the Vigilance Bureau, Ludhiana in relation to the "Ludhiana City Centre Scam". As per this information, in the course of operation, a computer pen-drive was recovered from said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssman was arrested vide FIR NO.5 dated 23.3.2007, PS Vigilance Bureau Ludhiana pertaining to Ludhiana City Center and kept in judicial custody. The Vigilance Bureau recovered a computer pen drive Sh. Chetan Gupta in which computerized accounts of hawala transactions of about 148 odd people were found. From the perusal of records in the form of pen drive and print outs the said pen drive received from the Punjab Vigilance Bureau, there appeared various entries in the various names in the said documents pertaining to F.Y. 2001-02. Further, from the perusal of letter No. 217-l9/SPIFS- I/Unit-III Ludhiana dated 12.11.2007 of Superintendent of Police, Vigilance Bureau, FS-I, Unit-II, Ludhiana, it is noticed that out of various names; identities of some of the persons have been deciphered by the Punjab Vigilance Bureau as Capt. Amrinder Singh and his family members including Smt Haminder Kumari, sister of Capt. Amrinder Singh. The account name of Smt. Haminder Kumari was BIBA and KlRAN/BIBA. Further perusal of the Charge Sheet dated 7.12.2007 filed in the case revealed that Sh. Chetan Gupta was looking after the money transactions related to Capt. Amrinder Singh and his family members in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year". 10.1 It is a point to note that the word "investment" has not been defined in section 69 of the IT Act, 1961 and has to be construed in general meaning. In the instant case, the appellant denied having made any investment (credits/ deposits) with Sh. Chetan Gupta. A perusal of section 69 envisages two pre- requisite conditions before an addition can be made under this section. The first pre-requisite is that the appellant should have made an "investment" and the second is that such "investment" should remain "unexplained". In the present case, according to the Assessing Officer, the appellant transacted her unaccounted money amounting to Rs. 34,83,206/-. The basis of the same is stated to be the information received from the Asstt. Commissioner of Income-tax, Central Circle-5, New Delhi, which in turn is based on a communication received from the Vigilance Bureau, Punjab. As per this information, the Assessing Officer was informed that on 17.05.2007, one Sh. Chetan Gupta was arrested i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessing Officer made an addition on account of unexplained investment. Thirdly, I also find that Sh. Chetan Gupta denied recovery of pen drive and also the impugned transactions in the statement recorded by the IT Authorities. Even if it is accepted that a pen drive was recovered from Sh. Chetan Gupta, it only amounts to a third party evidence and cannot be relied upon without any corroborative evidences. Reliance is placed in the judgment of Hon'ble Supreme Court in the case of Kishan Chand Chellaram, Hon'ble Delhi High Court in the case of SMC Share Brokers Ltd. and S.M. Aggarwal and also of the Hon'ble Punjab and Haryana High Court in the case of Chiranji Lal Steel Rolling Mills. The information received by the Assessing Officer at the best was to be regarded as a prima facie material, but cannot be construed as conclusive for utilizing the same against the appellant to fasten any tax liability because the same was required to be corroborated by credible and independent evidence which was not done in the present case. Therefore, under these circumstances, in my opinion, the Assessing Officer did not prove conclusively that an impugned investment was made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein it was held as under:- "A pen drive of one Mr. Chetan Gupta was seized as per which the assessee had received certain money. On the basis of information contained in the said pen drive, addition was made in the income of the assessee under Section 69 of the Income Tax Act. CIT(A) set aside the order of the Assessing Officer and deleted the addition on the ground that reliance cannot be placed on pen drive. More so, that Mr. Chetan Gupta, had denied payment to assessee in his statement recorded under Section 131, ITAT has upheld this order on the following terms:- As regards merit of the addition, there is no evidence in the possession of the revenue authorities to prove that the assessee ever paid cash to Shri Chetan Gupta except the so called report of ADIT (Investigation), Ludhiana, which in turn is based on the report of the Superintendent of Police, Ludhiana. However, neither the report of the SP, Ludhiana is available to the Assessing Officer much less to the assessee nor any statement was recorded by ADIT (Investigation) from Sh. Chetan Gupta to corroborate that any cash was paid by the assessee to Sh. Chetan Gupta. On the contrary, Sh. Chetan Gupta on his deposition b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b. Shri Chetan Gupta had admitted initially that he was looking after the transactions relating to family members of Capt Amrinder Singh and assessee is sister of Capt. Amrinder Singh. Thus in the face of the aforesaid evidence, ld CIT(A) was not justified to interfere with the addition made by the AO. The ld DR wants us to set-aside the order of the ld CIT(A) and restore the order of the AO. On the other hand the ld Sr. Advocate Shri C.S.Agarwal appearing for the assessee, relied upon the finding of the ld CIT(A) and stated that matter is fully covered by the order of this Tribunal in the case of Capt. Amrinder Singh brother of the assessees. He thus prayed that the order deleting the addition be upheld. 12. We have heard both the parties and have perused the record and carefully gone through the case-laws cited by both the sides. In the instant case the addition of Rs. 34,83,206/- was based on certain entries reflected and retrieved from a pen- drive recovered from Shri Chetan Gupta. According to the Revenue, the seized pen-drive contains computerized accounts of hawala transactions of about 148 people including the account of the assessee, whose identity was denominated as "BIB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounded/ seized by them. A. As far as I remember, In March 2007 an FIR was lodged against me at Ludhiana in connection with Ludhiana City Center scam. Nothing was recovered from me. However, the police claimed that a pen-drive recovered from me which is not correct. I have already denied this allegation of police, during the proceeding before IT authorities as well as Distt. Session Judge, Ludhiana. Q.5. I am showing you a letter written to DIT(Inv.) Ludhiana by SP, Vigilance Bureau Unit-II Ludhiana as per which you were maintaining A/cs of about 148 odd people who had black money dealing with you including Maharaja Amrlnder Singh and his family members, presence of which reveals that you were engaged in Hawala business and payments were routed through your concerns/companies through cheques as maintained In the letter: Please explain the nature of entries pertaining to Maharaja Amrinder Singh made through your abovesaid concerns. A. As already stated, the entries found in so called pen-drive do not pertain to me and no case of entry or transaction with Maharaja Amrinder Singh can be said through me or my company/ concerns. Q6. As stated above, a copy of a/c in the name of Mahar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anted, then such deficiencies would amount to denial of opportunity and would be fatal to the proceedings. Thirdly In this case, Shri Chetan Gupta has denied recovery of the pen- drive and also the impugned transactions in the statement recorded by the Assessing officer on 16.11.2009, so however, even if it is accepted that the pen-drive was recovered from shri Chetan Gupta, then, it only amounts to a third-party evidence and could not be straightaway relied upon without being tested in cross-examination or on the basis of any corroborative evidence. For the aforesaid proposition, we are fortified by the judgment of the Hon'ble Supreme Court in the case of Kisan Chand Chella Ram (supra), that of the Hon'ble Delhi High court in SMC Share Brokers Ltd. (supra) and S.M. Aggarwal (supra) and, also of the Hon'ble Punjab & Haryana High Court in the case of Chiranjil Lal Steel Rolling Mills (supra). The information received by the Assessing officer from his investigation Wing, at best, be regarded as a prima-facie material, but could not be construed as conclusive for use against the assessee to fasten any tax liability, because the same was required to be corroborated by cred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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