Tribunal dismisses revenue's appeal, deletes Rs 22,75,000 addition for AY 2004-05 due to lack of evidence

The Tribunal dismissed the revenue's appeal against the CIT(Appeals)'s decision to delete the addition of Rs 22,75,000 for the assessment year 2004-05. The Tribunal accepted the explanation for the delay in filing the appeal and emphasized the lack of corroborative evidence and statements supporting the alleged receipt by the Assessee. The Tribunal questioned the interpretation of the seized document and highlighted the insufficiency of evidence provided by the AO, ultimately leading to the deletion of the addition.

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Issues:
- Appeal by the revenue against the order of CIT(Appeals)-II, Bangalore for assessment year 2004-05.
- Delay in filing the appeal.
- Addition of Rs 22,75,000 made by the AO.
- Justification of the deletion of the addition by CIT(Appeals).
- Interpretation of seized document and evidence.
- Application of section 132(4A)(ii) and section 292C of the Act.
- Lack of corroborative evidence and statements.

Analysis:

1. Delay in filing the appeal: The revenue appealed against the order of CIT(A) for the assessment year 2004-05. There was a delay of 57 days in filing the appeal, which was explained by the DCIT, Circle 5(1) Bangalore. The appeal was initially filed in the wrong office but was later corrected and filed before the Asst. Registrar, ITAT, Bangalore on 27.11.2012. The Tribunal condoned the delay, considering it occurred due to a reasonable cause.

2. Addition of Rs 22,75,000 by the AO: The AO initiated reassessment proceedings against the Assessee based on the belief that the Assessee had received Rs 22,75,000 from Mr. Sohanraj Mehta. However, the Assessee denied receiving this amount and provided explanations regarding legitimate earnings from services rendered to Dhariwal Industries Ltd. The AO relied on the presumption under section 132(4A)(ii) of the Act, stating that any document found during a search can be presumed true.

3. Justification of deletion of the addition by CIT(Appeals): The CIT(Appeals) deleted the addition made by the AO based on the lack of evidence supporting the alleged receipt of Rs 22,75,000 by the Assessee. The CIT(Appeals) noted that the AO did not provide substantial evidence or corroborative proof to substantiate the claim. The Assessee's denial, lack of specific details in the scrutiny assessment, and absence of statements from Sohanraj Mehta were crucial factors in the deletion of the addition.

4. Interpretation of seized document and evidence: The seized document found during a search of Mr. Sohanraj Mehta contained an entry showing Rs 22,75,000 against the Assessee's name. However, the Tribunal questioned whether this document truly indicated payment to the Assessee and highlighted the absence of a clear basis for the AO's conclusion regarding the alleged receipt of money by the Assessee.

5. Application of section 132(4A)(ii) and section 292C of the Act: The Tribunal emphasized that the presumption under section 292C of the Act applies only to the person searched and cannot be extended to the Assessee. The lack of corroborative evidence or statements from Sohanraj Mehta regarding the payment further weakened the AO's case.

6. Lack of corroborative evidence and statements: The Tribunal concluded that the AO failed to provide substantial evidence to prove that the Assessee received Rs 22,75,000 from Sohanraj Mehta. The Assessee's consistent denial, coupled with the absence of supporting documentation or statements, led to the deletion of the addition by the CIT(Appeals.

In conclusion, the Tribunal dismissed the revenue's appeal, affirming the CIT(Appeals)'s decision to delete the addition of Rs 22,75,000 due to the lack of concrete evidence supporting the alleged receipt by the Assessee.

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