AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 1604
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.... Consequent to the information obtained from the search conducted from certain other people, the assessment of all the three years under consideration were reopened by the AO u/s 147 of the Act. 4. The assessee herein is an individual and is running a proprietary business in real estate & construction activities. Besides the above, he is also a Partner/Director in certain other firms/companies. The assessee is a non-executive director in M/s City Corporation Ltd. 5. The additions made in AYs. 2018-19 and 2019-20 are based upon same set of facts. Hence, appeals of both the years are first disposed of together. 6. The background of additions made in AYs. 2018-19 and 2019-20 is discussed in brief. During the course of search conducted in the case of M/s City Corporation Ltd, Pune, (CCL) a hard disk was recovered from an employee named Shri Chetan Borawake, who was working as Office boy of CCL, wherein Excel sheets were found. One of the sheets contained details of cash receipts and payments and the same is extracted below:- A sworn statement was taken from Shri Vijay Yewale, Accounts Manager of CCL u/s 132(4) of the Act, wherein he explained the work sheets. The Explanation given ....
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.... in the documents of third parties. He further submitted that the Excel sheet, being electronic evidence, the AO should comply with the requirements of sec. 65-B of Indian Evidence Act. Referring to the statements given by the above said parties, the assessee submitted that they have, nowhere, stated that the cash was received from the assessee. It was also submitted that Shri Vijay Yewale has retracted his statement made during the course of search and hence his statement should not be relied upon. The assessee accordingly reiterated that he has not entered into any cash transaction as mentioned in the Excel sheet. The assessee also requested the AO to provide an opportunity of cross examining the above said persons, on whose statements, the AO had intended to place reliance. However, the AO did not provide opportunity of cross examination. The assessee further submitted that the above said Excel sheet is a non-speaking dumb document and hence it cannot be relied upon for making addition in the hands of the assessee. In support of this legal proposition, the assessee relied upon various case laws. 9. Since the assessee was a director in CCL and since the Excel sheet was recovered....
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....t nature of the alleged transactions. (f) Ultimately, the addition has been made by the AO on the basis of statement given by Shri Vijay Yewale only, which has been retracted later and also on the basis of material found during the course of search of a third party named Shri Chetan Borawake. (g) The addition cannot be made on the basis of documents/material found from the premises of a third party unless such material or statement is corroborated by the independent evidence linking such material to the assessee. Following case laws were relied upon in this regard:- (i) Naren Premchand Nagda vs. ITO (ITA No. 3265 (Mum) of 2015 dated 8.7.2016. (ii) CIT vs, Santlal (2020)(118 taxmann.com 432)(Delhi) (iii) Jawaharbhai Atmaram Hathiwala vs. ITO (2010)(128 TTJ 36 (Ahd) (iv) Asst CIT vs. Prabhat Oil Mills (1995)(52 TTJ 533)(Ahd) (v) ACIT vs. Anand Kumar Jain (2023)( (147 taxmann.com 124)(Mum - Trib) (h) The presumption prescribed u/s 132(4A) or 292C of the Act could be taken only in the case of a person from whose possession the document or material has been found. It was so held in the case of Pramod Pandey vs. ACIT (ITA No. 4295 (Delhi) of 2012 dated 6.12.2013....
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.... Umacharan Shaw and Bros v CIT (1959) 37 ITR 271 held that suspicion, however strong, cannot take the place of evidence. Similarly, raising presumption itself does not amount to proof. Presumption, however strong, cannot take the place of evidence as held in the case of Pooja Bhatt 66 TTJ (Mum) 817 and in the case of D.M Kamani HUF 65 TTJ (Pat) 504. Thus, in the absence of any independent evidence linking the assessee with the material found from a third party or a third party statement, the addition made by the AO on the basis of such third party statement or material found from the third party cannot be sustained and is hereby deleted. The grounds of appeal are accordingly allowed." The Revenue is aggrieved. 11. We heard rival contentions and perused the record. We noticed that the assessing officer has placed reliance on the statement given by Shri Vijay Yewale and it is stated that the said person has retracted his statement later. Further, the document relied upon by the AO to make the addition was recovered from Shri Chetan Borawake, who was employee of some other concern and not M/s CCL, wherein the assessee is nonexecutive director. Thus, as noticed by Ld CIT(A), the AO ....
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....eir ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17.03.2005 was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits g....
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....0". In the statement, shri Rathi explained that Shri Nilesh Toshniwal was requested to pay 1.00 crore and in that connection, he had shared the phone number of angadia Vinod in order to co-ordinate with the transaction. When confronted with these information, the assessee denied both the above said transactions before the AO. However, the AO observed that there were regular communications between Shri Nilesh Toshniwal and Shri Shailendra Rathi and they were also regularly exchanging the documents which were in the nature of various cash transactions. Accordingly, the AO assessed both the amounts of Rs. 1.05 crores and Rs. 1.00 crore aggregating to Rs. 2.05 crores as the unexplained expenditure of the assessee u/s 69C of the Act. 16. The Ld CIT (A) deleted both the additions, following the various case laws mentioned above (in AY 2018-19 and 2019-20). The final conclusions recorded by Ld CIT (A) are extracted below:- "6.20 Thus it is seen that the Hon'ble Courts have clearly held that documents/material found from the premises of a third party or a statement of a third party cannot be relied upon to make additions in the hands of the assessee, unless such material ....