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TMI Blog2024 (12) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... e these persons. As decided in SURENDER KUMAR JAIN [ 2024 (3) TMI 426 - ITAT DELHI] addition made by the Ld. AO in both the AY(s) is not sustainable because it is based on mere suspicion, surmise and conjectures and not on legally sound footing and the Ld. CIT(A) admittedly confirmed the addition based alone on facts which emerges from the details and findings made by the Ld. AO. Thus addition u/s 69A and on account of undisclosed income need to be deleted - Decided in favour of assessee. - Shri Vikas Awasthy, Judicial Member And Smt. Renu Jauhri, Accountant Member For the Appellant : Shri Gautam Jain, Adv. And Shri Parth Singhal, Adv. For the Respondent : Ms. Jaya Chaudhary, CIT DR ORDER PER RENU JAUHRI, AM : This assessee s appeal is directed against the order of Ld.CIT(A)-24, New Delhi dated 31.08.2022 passed in respect of order u/s 153C r.w.s. 143(3) of the Income Tax Act, 1961 ( the Act ) for Assessment Year 2016-17. 2. The assessee raised the following grounds in the instant appeal:- 1. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the assumption of jurisdiction u/s 153C of the Act and, framing of assessment u/s 153C/1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng alleged undisclosed profit on alleged unaccounted transaction of Rs. 10,000/-, made by the appellant. 5. That both the lower authorities have failed to appreciate that additions made and sustained without rejection of books of accounts u/s 145(3) of the Act are illegal, invalid and, untenable. 5.1. That the learned Commissioner of Income Tax (Appeals) Tax has failed to appreciate that material found from a premises of a third party in absence of corroborative evidence could not be ipso-facto a ground or basis to assume that there is unexplained money taxable in the hand of appellant u/s 69A of the Act. 5.2. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that in absence of section 65B of Evidence Act, soft/digital data recovered from third party cannot be made a foundation of addition. 5.3. That further, the alleged enquiries conducted by the various income tax authorities have no evidentiary value as has been done behind the back of appellant and without granting any fair, meaningful and proper opportunity and cross examination to the appellant and thus, could not be made a basis in law to sustain the addition. 6. That the learned Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whose statements, the notice was issued to the assessee. The assessee s objections were disposed off by the Ld.AO vide letter dated 15.12.2021. Thereafter, the assessment was completed vide order dated 30.12.2021 after making addition of INR 26,60,000/- on account of unexplained money u/s 69A and INR 200/- on account of undisclosed income computed @ 2% on total cash transactions of INR 10,000/-. 4. Aggrieved with the assessment order, the assessee preferred appeal before Ld.CIT(A). Vide order dated 31.08.2022, Ld.CIT(A) dismissed the appeal of the assessee on merits as well as on the legal issues. 5. Aggrieved with the said order, the assessee is in appeal before the Tribunal. 6. During the course of hearing, Ld.AR of the assessee submitted that the legal grounds i.e. Ground Nos.1 2 are not being pressed and may be kept open and argued factual Ground Nos.3 4 on merits. 7. Ld.AR demonstrated through copies of replies submitted before the Ld. AO on 09.07.2021, 15.12.2021 23.12.2021 that the assessee had repeatedly sought copies of the statement of the person based on which satisfaction had been recorded as well as opportunity to cross examine the counter party. However, neither the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any link with these names. Neither copies of the documents/statements were provided to the assessee nor he was given an opportunity to cross-examine the persons concerned based on whose statement proceedings in the case of the assessee had been initiated. The assessee has all along maintained that he is in no way connected to the names Anuj-Shamli Shyamli . We also note that while coming to the conclusion that these entries belonged to the assessee, Ld.AO has relied upon the statements recorded during the search and has also reproduced relevant portions thereof in the assessment order. As such, the assessee ought to have been provided relevant documents, copies of statements as well as an opportunity to cross-examine these persons. We have also perused the decisions of the Co-ordinate Benches in this regard. Relevant portions of the order passed by the Co-ordinate Bench of the Tribunal in the case of Surender Kumar Jain vs ACIT in ITA Nos.1314 1315/Del/2023 (supra) are reproduced as under:- 9. We have given our careful thought to the submission of the parties and perused the records. The facts are not in dispute. During assessment proceedings the common plea of the assessee in both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valid. This decision was rendered in the context of order under section 158BD which is equally applicable in the case of the assessee to order passed under section 153C of the Act. 9.3 Perusal of the assessment orders would show that whereas the Ld. AO has used his imagination in applying the provision of section 69C for making the impugned addition in both the years treating the alleged cash transactions as expenditure incurred by the assessee towards purchase of gold/bullion from M/s. JBL, the Ld. CIT(A) was in a fix. So he confirmed the impugned addition in AY 2016-17 under section 69C as unexplained expenditure and in AY 2017-18 under section 69A as unexplained money. In our view the impugned addition made by the Ld. AO in both the AY(s) is not sustainable because it is based on mere suspicion, surmise and conjectures and not on legally sound footing and the Ld. CIT(A) admittedly confirmed the addition based alone on facts which emerges from the details and findings made by the Ld. AO (para 6.5 of appellate orders refers). 9.4 For the reasons set out above and on the facts and in the circumstances of the case, we allow the appeals of the assessee and direct the Ld. AO to delete ..... 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