9911796707
TMI Blog2024 (7) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Shri R.Sabapathy was modified within a short span of time and therefore, the same could not be accepted as credible one. No concrete reliance could be placed on the same to make impugned addition in the absence of any other evidence on record. We accept another argument of Ld. AR that the value as shown in the sale deed was accepted for stamp duty valuation purposes - No valuation whatsoever has been undertaken by Ld. AO and no exercise is shown to have been carried out by Ld. AO to establish that the market value of the impugned property was much more. In the absence of such a finding, the impugned additions are merely unsubstantiated additions which could not be sustained in law. It is trite law that no addition could be made on mere presumption and suspicion. The Ld. AO has to bring on record cogent positive evidences to sustain addition based on third party statement / material. The assessee has, all along denied impugned payments and the assessee, therefore, could not be expected to prove the negative. See P.V.Kalyanasundaram [ 2006 (2) TMI 79 - MADRAS HIGH COURT] wherein held Ld. AO did not conduct any independent enquiry relating to the value of the property purchased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bapathy alone. 6. The appellant humbly submits that a reference to the document (Annexure No. ANN/SR/SSSLLP/B&D/S-2) seized during the search in the case of Saravana Stores Jewellery read with the statement of Shri. A. Julian (dated 04.12.2021) explaining and asserting that "This loan of Rs. 25 Crores was taken in 2021, so all the dates are pertaining to the year 2021 only" and the sworn statement of Shri. Sabapathy (dated 04.12.2021) that the cash loan of Rs. 25 Crores was taken to pay for the purchase of immovable property at Perambur (and Madurai) indicate the improbability of payment of the alleged "On Money" to the appellant for the Perambur property sold on 11.12.2020. 7. The Commissioner (Appeals) has gone wrong in not accepting the submission supported by judicial decisions that solely on the basis of evidence such as notings in loose sheets found with third parties and the statement of third parties, additions cannot be made without corroborative evidence and independent inquiries. 8. The Commissioner (Appeals) further failed to take note of the two circulars dated 10.03.2003/ 18.12.2014 issued by CBDT disapproving recording of confessional statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sabapathy. In reply to Q.No.56, he deposed that cash loans were taken by him to pay for the purchase of immoveable properties at Perambur during December, 2020. He specifically stated that the property at Perambur was purchased for his sister Smt. Selvakumari for consideration of Rs. 21 Crores and he paid Rs. 5 Crores in cash over and above the registered value to the assessee (Shri Saravanan of Saravana Bhavan Hotels group). Out of cash loan of Rs. 25 Crores as received from Shri Rakesh Kumar of Swarna Shilpi, an amount of Rs. 5 Crores was stated to be paid as on-money over and above the sale consideration of the property. The assessee was thus said to have sold the property to Smt. Selvakumari for Rs. 21 Crores including Rs. 5 Crores which was paid in cash during FY 2020-21 as was evident from the seized material and sworn statement recorded from Shri Sabapathy during search. However, the assessee declared sale consideration of Rs. 16 Crores only and accordingly, Ld. AO proceeded to add the differential of Rs. 5 Crores to the income of the assessee. 3.2 The assessee refuted the allegation and submitted that the statement of Shri R.Sabapathy was retracted on 21-03-2022. The said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny the payment of on-money to the assessee. The claim of the assessee is that the statement of Shri A.Julian and Shri R. Sabapathy are contradictory statements, but the statement of R. Sabapathy is credible one as he is the person in whose case, search was conducted and the entries in the seized slips were initialled by him as deposed by Shri A.Julien in answer to question No.28. He also deposed that further details were known to Shri Sabapathy in answer to question No.29. In the circumstances, the statement of Shri R. Sabapathy given on the date of search, is credible and to be taken as true and correct. The reliance placed by the assessee in the Instruction issued by CBDT, is misplaced as there is recovery of seized material on which the searched person deposed the nature of entries and transactions. The above Instructions will be applicable only to the oral admission obtained regarding disclosure of additional income during survey/search without any material evidences and therefore, the above Instructions are not applicable to the facts of the case. For the same distinguishing reasons, the decisions cited are also misplaced and are not applicable to the facts of the instant asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertaken by Ld. AO and no exercise is shown to have been carried out by Ld. AO to establish that the market value of the impugned property was much more. In the absence of such a finding, the impugned additions are merely unsubstantiated additions which could not be sustained in law. It is trite law that no addition could be made on mere presumption and suspicion. The Ld. AO has to bring on record cogent positive evidences to sustain addition based on third party statement / material. The assessee has, all along denied impugned payments and the assessee, therefore, could not be expected to prove the negative. 7. We find that on given facts, the ratio of case law of Hon'ble High Court of Madras in the case of P.V.Kalyanasundaram (155 Taxman 454) would apply. In this decision, Hon'ble Court held that where Ld. AO did not conduct any independent enquiry relating to the value of the property purchased or did not refer the valuation to valuation officer and merely relied on the statement given by the seller, the same would be fatal to additions. 8. Considering the facts and circumstances of the case, we would hold that impugned additions are not sustainable in law. The same stand del ..... X X X X Extracts X X X X X X X X Extracts X X X X
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