2021 (1) TMI 905 - AT - Income Tax

Assessee's appeals allowed, additions deleted. Tribunal stresses clear evidence, proper inquiry.

Shri Harpal Yadav Versus The ACIT, Central Circle-3, Jaipur.

Shri Harpal Yadav Versus The ACIT, Central Circle-3, Jaipur. - TMI Issues Involved:1. Legality of the assessment order passed under Section 143(3) read with Section 153A of the Income Tax Act.2. Addition on account of alleged cash payment out of undisclosed income.3. Addition on account of alleged unexplained money under Section 69A of the Income Tax Act.Detailed Analysis:1. Legality of the Assessment Order:The assessee contested the validity of the assessment order passed under Section 143(3) read with Section 153A of the Income Tax Act, claiming it to be bad in law as well as on facts. However, during the hearing, the assessee chose not to press this ground of appeal. Consequently, this ground was dismissed as not pressed.2. Addition on Account of Alleged Cash Payment:In ITA No. 1000/JP/2019 for A.Y 2014-15, the assessee challenged the addition of Rs. 235,000 made by the Assessing Officer (AO) on the basis of entries found in a seized diary (Exhibit No. 2, pages 20-21). The assessee argued that the entries were not in his handwriting and were made by his son, Shri Jitendra Yadav, who also submitted an affidavit owning up the entries. The AO and the Commissioner of Income Tax (Appeals) [CIT(A)] ignored this explanation and sustained the addition.The Tribunal noted that the Revenue did not dispute the contents of the affidavit submitted by Shri Jitendra Yadav. Since the son had owned up the entries and transactions, the assessee successfully discharged the onus cast on him, and the presumption under Section 132(4A) could not be drawn against him. Therefore, the Tribunal directed the deletion of the impugned addition, allowing the assessee's appeal.3. Addition on Account of Alleged Unexplained Money:In ITA No. 1001/JP/2019 for A.Y 2017-18, the assessee contested the addition of Rs. 876,197 made by the AO under Section 69A of the Income Tax Act, based on a loose paper (page 15 of Exhibit No. 2) found during the search, which mentioned 'savings' of Rs. 876,197. The assessee argued that the document was a 'dumb document' with no date, period, or corroborative evidence linking it to unexplained money.The Tribunal examined the provisions of Section 69A and noted that it applies only when the assessee is found to be the owner of any unexplained money, bullion, jewelry, or valuable article. In this case, no such physical finding was made. The Tribunal also observed that the document lacked details about the nature of transactions, parties involved, and dates. The AO himself was not clear about the nature of the transaction, stating it 'appears to be payment received in cash by the assessee.'Given the lack of clarity and corroborative evidence, the Tribunal concluded that the addition under Section 69A was not justified. The document seemed related to the diary business already disclosed by the assessee. Therefore, the Tribunal directed the deletion of the impugned addition, allowing the assessee's appeal.Conclusion:Both appeals filed by the assessee were allowed, resulting in the deletion of the additions made by the AO. The Tribunal emphasized the importance of clear evidence and proper inquiry before making additions based on seized documents.