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TMI Blog2025 (1) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, declaring taxable income of Rs. 3,00,000/-. During the year under consideration, the Appellant along with her mother acquired a property situated at B-376, B Block, 2nd Floor, Sushant Lok - I, Gurugram. Haryana - 122001 from Ms. Sudha Malik through her GPA holder Sh. Anil Narang for an agreed sales consideration of Rs. 61,50,000/-. The share of the Appellant in the said property was 50%, while the balance 50% was acquired by her mother, accordingly, the Appellant paid 50% of the agreed consideration of Rs. 30,75,000/- after deducting the appropriate TDS. The amount of sales consideration was paid by the Appellant from her own disclosed sources and completely through bank account. 2.2 On 03.01.2018, a search and seizure operation were carried u/s 132 of the Act in the case of Navneet Dawar and others, which also covered the premises of Sh. Anil Narang. During the search, certain photo/image was seized from the phone of Sh. Anil Narang, marked as Annexure A1 (Exihibit-1 to the statement of Sh. Anil Narang) allegedly belonging to/pertaining to the Appellant. The alleged seized material is placed at page 26 of the paper-book. Relying on the seized material the assessment under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce: "Q.14 During the search operation in case of Sh. Navneet Davar and others on 03.01.2018 at your residence M-22, GK-II, Delhi, various imáges were found from your Samsung A9. In this respect, document found as Exhibit-A is being shown to you. Phase give details regarding this Ans. I am unable to understand the document." 5. Thus based on aforesaid it was submitted that the image/photo found during the search and was illegible. In this context, ld. Counsel has submitted that, it is settled legal position that no adverse action can be taken on a person on the basis of illegible document/piece of evidence. Reliance was placed on decision of Hon'ble Supreme Court in the case of Pramod Singla Vs. UOI [Special Leave Petition (Crl.) No. 10798 Of 2022]. Reliance is also placed on the decision of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in the case of M. M. Industries Private Limited vs. Commissioner, Customs & Central Excise [Excise Appeal No. 51687 of 2017], where the order creating the demand of excise duty made on the basis of illegible handwritten paper ledger was set aside. Reliance is placed on the decision of Hon'ble Mumbai ITAT in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble High Court of Delhi in case of CIT v. D.K. Gupta [308 ITR 230]. 7. Ld. Counsel has then submitted that otherwise too the image/photo seized from the phone of Sh. Anil Narang, cannot be admitted as digital evidence in violation of section 65B of the Indian Evidence Act, 1872, rendering the addition made on the basis of said evidence unsustainable and liable to be deleted. The sole seized material, being image/photo retrieved from the mobile phone of Sh. Anil Narang, which was extensively relied by the Ld. AO for making the impugned addition, being digital record, cannot be admitted as evidence, as the mandatory certificate under section 65B(4) of the Indian Evidence Act, 1872 is not provided to the Appellant, rendering the said image/photo non-est in the eye of the law. In this context certain judicial decision were relied which we will deal in later part. 8. Ld. DR on the contrary relied the orders of ld. Tax authorities below. 9. As the sole ground of assault on the impugned assessment order was on the basis of the challenge of incriminating document not being legible and dumb document, so during the course of hearing, the ld. DR sought opportunity to summon assessment rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce with the provisions of section 65B of the Indian Evidence Act. The relevant para 2.7.3 is reproduced here in below; "2.7.3 Under Indian Evidence Act there are several references to documents and records and entries in books of account and their recognition as evidence. By way of the THE SECOND SCHEDULE to the Information Technology Act Amendments to the Indian Evidence Act have been brought in so as to, incorporate reference to Electronic Records along with the document giving recognition to the electronic records as evidence. Further, special provisions as to evidence relating to electronic record have been inserted in the Indian Evidence Act, 1872 in the form of section 65A & 65B, after section 65. These provisions are very important. They govern the integrity of the electronic record as evidence, as well as, the process for creating electronic record. Importantly, they impart faithful output of computer the same evidentiary value as original without further proof or production of original. Accordingly, while handling any digital evidence, the procedure has to be in consonance of these provisions." 12. Section 65B of the erstwhile Indian Evidence Act, 1872, (as was applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A Nos. 172 to 180/Viz/2023 [2023]153 taxmann.com 591 (Visakhapatnam Trib.) vide dated 18.08.2023 has held as follows: "45. On careful perusal of the case laws cited above, we are of the considered view that the Revenue Authorities should mandatorily and scrupulously follow the conditions laid down under section 65B(2) and (4) of the Indian Evidence Act to render any documents to be valid in the eyes of law. In the instant case, the investigation agency obtained a Certificate about the details of the pen drive and the person in whose custody it was seized. Except these details nothing was there in the Certificate and also the said Certificate was not completely filled up by the Ld. Revenue Authorities. Further, from the Certificate obtained under Indian Evidence Act which is placed in Page-11 of Paper Book-2, we find force in the arguments of the Ld. AR that it is not as per the conditions laid down u/s. 65B of the Indian Evidence Act. 46. After considering the decisions of the Hon'ble Supreme Court in the case of Anvar P.V (supra); Arjun Pandit Rao Khotkar (supra) and the judgment of the Hon'ble Madras High Court in the case of Vetrivel Mineral (supra) as well as on per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of Evidence Act. The safeguard u/s 65B is provided to avoid any manipulation or loosing the contents in the process of collecting the electronic record." 17. Next in Shri Purushotham Naidu Lekkala Vs. A.C.I.T Central Circle 3(2) Hyderabad vide decision dated 11/06/2024 the Hyderabad Bench of this Tribunal has dealt with the issue and held as follows. "4. The learned AR submitted that the Ld. AO and Ld. CIT (A) on the basis of only electronic data, sustained the addition of Rs. 60,26,040/-. Relying on various decisions of the Hon'ble Supreme Court/High Court/ITAT, he further submitted that the said electronic data cannot be used in isolation for making any addition. He also submitted that no certificate as mandated u/s 65B(4) of the Indian Evidence Act ("Ecertificate") was obtained by the Ld. AO in accordance with the manual on Digital Evidence Investigation issued by the CBDT ("CBDT manual") in the year 2014. Further, no corroborative material have also been brought into the record by the Revenue authorities that the said interest amount of Rs. 60,26,040/- have been actually received by the assessee. Hence, he submitted that the action taken by the Revenue Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Investigation Manual has been issued by the CBDT by virtue of powers available u/s 119 of the I.T. Act and hence, the Income Tax Authorities and all the other persons employed in the execution of this Act are bound to observe and follow such orders, Instructions and directions issued by CBDT". The Hon'ble High Court also held that if the procedure as specified under the CBDT Manual have not been followed while relying on the electronic record, the said record must be supported by corroborative evidence. The relevant portions of the decision of the Hon'ble High Court are reproduced as under: "iii) The Digital Evidence Investigation Manual has been issued by the CBDT by virtue of powers available under Section 119 of the IT Act and hence, the Income Tax Authorities and all the other persons employed in the execution of this Act are bound to observe and follow such orders, instructions and directions issued by CBDT. In the case of Commissioner of Customs (referred supra), the Hon'ble Apex Court had culled out the principles, which has to be followed while conducting search and seizure of evidences and the same has been extracted at paragraph No.50 of this order. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Evidence Act.
20. Even otherwise, if this piece of document is considered, the same has no signatures of the assessee or even Shri Anil Narang. There is no separate piece of evidence establishing the handwriting to be of Shri Anil Narang or the assessee. As we go through the contents there are no corroborating facts to establish that any on money was paid separately. The ld. AO himself mentions that when Shri Anil Narang was confronted with this document and his statement u/s 131(1A) of the Act was recorded, Shri Anil Narang had deposed that he is unable to understand the document. As with regard to the transaction also he had shown his ignorance. There is no independent inquiry also by the AO of the fact that the value of the property was otherwise thrice at Rs. 1,67,00,000/- than the amount paid by the assessee of Rs. 67,50,000/- by way of banking transactions. Thus being a case of no evidence, the addition is not sustainable under law.
21.. In the light of the aforesaid, we are inclined to allow the grounds raised by the assessee and consequently, the appeal of the assessee is allowed.
Order pronounced in the open court on 31.12.2024. X X X X Extracts X X X X X X X X Extracts X X X X
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