2022 (4) TMI 1685 - AT - Income Tax

On-money addition fails where builder's statement is uncorroborated and electronic evidence does not meet admissibility requirements.

An addition for alleged on-money payment could not be sustained where it rested only on a builder's statement and seized material, without any independent ... On-money addition - Corroborative evidence - Admissibility of electronic evidenceOn-money addition - Statement of third party - Electronic evidence - The addition for alleged on-money payment could not be sustained when it was made only on the basis of the builder's statement and electronic material found at the builder's premises, without any corroborative material from the assessee and without showing compliance with the requirement of section 65B of the Evidence Act for admissibility of electronic evidence. - HELD THAT: - The Tribunal found that no corroborative material had been found from the assessee to support the allegation of on-money payment. The addition rested solely on the builder's statement, which was held insufficient to sustain the addition, consistent with the principle noticed from CIT vs P.V Kalyanasundasram . The Tribunal further held that there was nothing on record to show that the electronic evidence collected by the Revenue from the builder's office satisfied the requirement of section 65B of the Evidence Act regarding admissibility. On these determinative grounds, the addition was held unsustainable. [Paras 6]The addition was directed to be deleted.Final Conclusion: The Tribunal allowed the appeal and deleted the addition for alleged on-money payment. It held that, in the absence of corroborative material from the assessee and in the absence of demonstrated compliance with the law governing admissibility of electronic evidence, the addition could not be sustained. Issues: Whether the addition for alleged on-money payment could be sustained when it was based only on a builder's statement and seized material, without corroborative evidence from the assessee, and whether the electronic material relied upon satisfied the admissibility requirement.Analysis: The addition was made without any independent material found from the assessee and rested solely on the builder's statement. Such material, without corroboration, was found insufficient to sustain the addition. The electronic evidence relied upon by the revenue was also not shown to meet the requirement of section 65B of the Indian Evidence Act, 1872 for admissibility of electronic records.Conclusion: The addition was held unsustainable and was deleted; the assessee succeeded.