TaxTMI 
TaxTMI 
2026 (5) TMI 474
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....of the Act 3. 5653/Del/2025 [Assessee's appeal] 2023-24 13.08.2025 31.03.2025 143(3) of the Act 4. 8028/Del/2025 [Revenue's appeal] 2019-20 13.08.2025 07.02.2025 147 r.w.s 143(3) of Act 5. 8002/Del/2025 [Revenue's appeal] 2023-24 13.08.2025 31.03.2025 143(3) of the Act 2. Since all the appeals filed by the assessee and the Revenue are having common, identical and similar issues, therefore, they are decided by a common order. 3. First we take appeal of the assessee in ITA No. 5651/Del/2025 and appeal of the Revenue in ITA No. 8028/Del/2025 for Assessment Year 2019-20. 4. Brief facts of the case are that the assessee is an individual and e-filed his return of income on 19.08.2019, declaring total income at INR 31,32,020/-. A search and seizure action was carried out on 31.10.2022 at the business premises of Kapoor Watch Company Pvt. Ltd. and its key Associates. The assessee is handling the showroom of Kapoor Watch at Ambience Mall at Gurugram and closely related to the group, his residence situated at C-27, Sushant Lok, Phase-1, Gurugram was also searched. During the course of search, various loose papers/documents were f....
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....e revenue in Grounds of appeal No. 1 & 2 has challenged the deletion of addition of Rs. 64,50,000/- made by the Ao u/s. 69A/115BBE towards the gifts received from father-in-law held as bogus. Since the issue if common thus the grounds of appeal taken by the assessee and revenue are taken together. 9. Heard the contentions of both the parties at length and perused the material on record. It is observed that the AO has made the additions by alleging that assessee has received the gifts from his father-in-law who is residing at Dubai and as per WhatsApp Chat found, assessee has sent cash to his father-in-law and received back the same in the guise of gifts. The AO thus alleged that these gifts were received by the assessee out of his unaccounted money generated through property transactions, selling out of books luxury watches in gray market and undisclosed commission income generate by providing entries to M/s Kapoor Watch Company in lieu of cash sales through dummy buyers. 10. In this regard, it is observed that all the gifts were duly credited in the bank account of the assessee which is forming part of regular books of accounts of assessee based on which return of income was....
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....by ld. CIT(A), as observed above, the AO alleged that assessee has earned undisclosed income from property transactions and cash sales of the luxury watches however, no such allegations are without any corroborative material and made on mere assumptions and presumptions. The AO further observed that assessee has admitted this fact in the statements recorded however, such statements are not corroborated by any evidences. The assessee has filed the copies of the bank statements of the donor alongwith his affidavit and it is not the case of the revenue that cash was deposited prior to remittance to the assessee of the gift. The assessee also explained the source of income in the hands of the donor who is NRI and residing out of India since past long. Therefore, the sources in the hands of eh donor cannot be doubted merely on the basis of some WhatsApp chats which do not mention that the sum was send by the assessee which was received back as gift more particularly when no cash was deposited in the bank account of the donors. Only evidence is the statement of the assessee which was retracted later on thus the same cannot be made the sole basis for holding the gifts received as ingenuin....
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....payment for construction of property, the AO in para 17.1 of the order observed that the search was also carried out simultaneously at the business premises of ENN V ENN Designs Pvt. Ltd. at 2798/2798A, Sushant Lok Road, Block-C, Phase-I, Sector-43, Gurgaon, wherein certain soft data was found with respect to the construction, architectural and other design related work of various properties which includes the digital evidences of the construction of immovable properties belonged to the assessee company. AO based on such documents, alleged that there were cash payments with respect to the construction of property situated at C-2604, Sushant Lok 1, Gurgaon which were not recorded in the books of accounts of the assessee and therefore, addition of INR 1,16,90,723/- was made being the difference of amount stated in Excel sheet and amount recorded in the books of accounts of the assessee company u/s. 69A/115BBE of the Act which was deleted by ld. CIT(A). 59. Against this, Revenue is in appeal before the Tribunal. During the course of hearing Ld. CIT DR vehemently supported the order of the AO and submits that there were evidences were found as a result of search at the busines....
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....s. It is further observed that nowhere in the said documents, it is observed that any cash payments were made by the assessee to the contractor in addition to the amount which were recorded in the books of accounts. Ld. CIT DR appreciated these facts and deleted the additions made by AO by making following observing in para 8.1 to 8.9 of the order:- 62. From the perusal of the observations of Ld. CIT(A) and the conclusion drawn, it is observed that AO has made the additions solely on the basis of so-called Excel Sheets wherein amounts stated to have been recorded on estimated basis without bringing on record any corroborative material to hold that these amounts are actually incurred by the Contractor as well as paid in cash by the assessee. Further, no inquiry was made from the Contractor with respect to the receipt of such cash from the assessee. Further, if the AO has any doubts about the cost of construction declared by the assessee of the subject property, he could have referred the matter for valuation before the District Valuation Officer which has not been done in the instant case. In view of these facts, we are of the view that without having any corroborative evid....
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....d received 'on money' of Rs. 67.00 lacs in cash in addition to the sale consideration declared in registered Sale Deed. Thus, the same cannot be deleted. However, it is observed that the AO made the addition u/s. 69A for this on money by treating the same as unexplained money. Before going further, we first examine the provision of section 69A of the Act which reads as under:- Unexplained money, etc. 69A. "Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year." 24. The provisions of section 69A are applicable in cases where the assessee is found to be the owner of any....
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.... AO. Once the source is established, provision of section 69A cannot be invoked for making addition of sale consideration received over and above the declared sale consideration in cash. 27. It is further observed that assessee has declared LTCG from the sale of his 50% share in the said property. However, the sale consideration is taken at Rs. 50.00 lacs only (50% of Rs. 1.00 cr) and 33,50,000/- being 50% of on money of INR 67 Lakhs remained excluded while computing income from Capital gains. Since the on money of INR 67.00 lacs was jointly received by the assessee alongwith other two co-owners at the time of sale of immovable property owned by them, it partakes the character of sale consideration and thus, the same cannot be held as unexplained money as the source of the same is explained as from the buyer of the property whose whereabouts are mentioned in the sale deed. Therefore, the on money so received should to be treated part of the sale consideration and should be taxed as 'Income from capital gain' and the assessee should pay tax on LTCG from the sale of said property and not as income from other source u/s. 69A of the Act. Accordingly, we allow Ground of appeal No.4 r....
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....neral in nature, needs no separate adjudication. 35. Ground of appeal No.2 raised by the assessee is with respect to the confirmation of addition of INR 38,80,000/- made u/s. 69A/115BBE of the Act on account of gifts received by father-in-law as unexplained money. The revenue in Ground of appeal Nos. 1 & 2 has challenged the deletion of addition made on account of gifts u/s. 69A of the Act of INR 89,81,452/- out of total addition of INR 1,28,61,452/- made by AO. 36. Before us, during the course of hearing, both the parties have fairly admitted that facts involved in this issue are identical to the facts in assessee's own case for AY 2019-20 where the addition of identical nature were made towards the gifts received from father-in- law by holding the same as unexplained money u/s. 69A of the Act. 37. While deciding the appeal of the assessee in ITA No. 5651/Del/2025 for Assessment Year 2019-20, we have already deleted the addition confirmed by ld. CIT(A) and further confirmed the order of ld. CIT(A) to the extent addition was deleted. Therefore, by following the observations made in ITA No.5651//Del/2025 for AY 2019-20 in assessee's own case, which is Mutatis Mutandis appli....
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....he same was not provided and therefore, the AO has made the addition of the said sum u/s. 69B r.w.s. 115BBE of the Act. 42. In first appeal, Ld. CIT(A) has deleted the addition to the extent of INR 83,28,912/- by holding that the said jewellery as received by assessee and his wife from his in-laws from time to time for which necessary copies of bills was also submitted. Ld. CIT(A) after considering the same and further by placing reliance on the judgement of Hon'ble Delhi High Court in the case of Ashok Chaddha vs. ITO [2011] 14 taxmann.com 57 (Del) and the decision of Co-ordinate Bench of Tribunal in the case of Vibhu Agarwal [2018] 93 taxmann.com 275 has held that looking to the social and family status of the assessee, receipt of jewellery as gifts on various occasions from the relatives cannot be doubted and the jewellery found in excess of CBDT Instruction No.1994 dated 11.05.1994 was held as acquired out of unexplained sources and addition of INR 25,97,479/- was confirmed and deleted the remaining addition of INR 83,28,912/-. 43. Before us, the Revenue has failed to controvert the findings of Ld. CIT(A) by placing any contrary material. Such findings of ld. CIT(A) are b....
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.... the addition made. However, ld. AR made an alternate claim that the benefit of telescoping and set off out of the additions confirmed on account of on money received in cash from the sale of property should be given. On careful consideration of the claim of the assessee, it is observed that the application of the on money so received from the sale of property in the year under appeal of INR 36,66,666/- & INR 61,50,000/- and also of INR 33.50 lacs in AY 2021-22 has not been applied elsewhere. While deciding the ground of appeal No. 5 of the assessee herein above, we have allowed the benefit of telescoping and set off of INR 25,97,479/- towards unexplained investment in jewellery. Likewise we further allow the benefit of telescoping towards cash of INR 17 Lakhs found during the course of search. The ground of appeal No. 6 of the assessee is thus partly allowed. 49. Ground of appeal No.7 of the assessee is regarding the validity of the approval granted u/s. 148B of the Act. Before us, no effective arguments were made by the ld. AR of the assessee, therefore, this ground of appeal is hereby dismissed. 50. Ground of appeal No.4 of the Revenue is with respect to the deletion of ad....
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....on income. The AD has further inferred that the Pago,19 61 47 Document 2 Shri Parvinder Singh Taneja, A.V. 2019-20 Appeal No .: CIT (A), Delhi- 27/10956/2018-19 unaccounted money was routed back from his father-in-law in the form of gifts. On the basis of the alleged inferences, the AO has made the addition of Rs. 89,50,000/- u/s 69A of the Act. 4.2 I have considered the submissions of the appellant. I find that the addition has been made by the AD on the basis of some WhatsApp chats found between the appellant and his father-in-law Sh. Prabhjot Singh Kohli which showed that the appellant was making some cash payments to Sh. Prabhjot Singh Kohli and in return, he was making payment in form of gifts back to the appellant Further, in his statement recorded u/s 132(4) of the Income-tax Act, 1961 on 31.10.2022, the appellant confessed that he used to send cash to his father in law and the same was earned on account of various immovable property transactions undertaken by him. This confession of the appellant was in respect of those cash payments made to his father-in-law which were reflected in the Whatsapp chats. On the basis of the said evidences, in the impugned financi....
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....nditions exist: (1) Ownership: The assessee must be found to be the owner of the money, bullion, jewellery, or other valuable article during the relevant financial year. Ownership here is not about mere possession; it means having full rights over the asset, such as the right to possess, enjoy, transfer, or use the asset for one's own benefit. The Supreme Court has clarified that mere possession does not amount to ownership if the person does not have legal rights over the asset. For example, a thief or a carrier of goods is not considered the owner under this section; (ii) Not Recorded in Books: The asset must not be recorded in the books of account maintained by the assessee. If the asset is already accounted for, Section 69A cannot be applied; (iii) Unsatisfactory Explanation: The assessee must either offer no explanation or an explanation that is not satisfactory to the Assessing Officer regarding the nature and source of the asset. The explanation must be credible and supported by evidence; otherwise, the addition can be made. Page 21 61:47 Document 4 Section 69A of the Act is a deeming section and it is applicable only when all the aforesaid conditions are cum....
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....e jewellery, any addition or other can be Page 22 of 47 1 Document 5 be the owner of the money, bullion, jewelry or other valuable articles. The Court held that where the assessee was mere carrier supplying goods/ Bitumen from consignor i.c. oil marketing companies to consignee i.e. road construction department, he could not be said to be owner for purpose of section 69A of the Act. Further, the Apex Court, in Para 26 and 27, while interpreting the provisions of section 69A, observed that 'Section 69 and Section69A, apart from being close neighbours, do bear resemblance with one unother. Section 69 deals with unexplained investment. Section69A deals with unexplained money, bullion, jewellery or other valuable articles. Section69A was inserted by Amending Act 5 of 1964 and it came into effect w.e.f. 1-4-1964. Both sections require that the subject matter of the provisions, viz., investments in the cuse of section 69 and money, hullion, jewellery or other valuable articles in the case of section69A are not recorded in the Books of Account. That is, in a case where Books of Accounts are maintained. In the case of investments under section 69, necessarily....
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....s possession. On his disclaimer that such articles found in his possession do not belong to him, the burden lies on the revenue to establish the ownership of the assessee before raising any presumption against him. 9. So far as the finding that the money and valuable articles are owned by the assessee is concerned, the burden is squarely on the revenue because it is only on reaching such finding the opinion that can be given about the source of its acquisition. It is only on establishment of ownership of such articles either on admission of the assessee or otherwise if assessee fails to explain satisfactorily the source of acquisition of such valuables that section 69A can be invoked for making additions into the total income of the assessee value of such articles as income from undisclosed sources for the assessment year relevant to previous year during which the assessee is found to be owner of such valuable articles. Therefore, the burden of proving ownership of the assessee in valuables found in possession of the assessee rests on the revenue and not with the assessee. What amount of evidence to establish ownership would depend on facts and circumstances of each case. In the....
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....essee was released from confiscation only on a clear finding that such primary gold belong to the abovenamed three persons. The said persons had admitted their ownership in income-tax proceedings also. The three persons' existence is not in doubt. Their affidavits have been brought on record. The fact that because the ornaments were brought by these three persons, the assessee has described them as owners of the gold cannot be held against the assessee to hold him to prove the ownership. if these persons had not stated correctly about the ownership of the gold ornaments brought to assessee by them it cannot be evidence of the ownership of the assessee over the primary gold und gold ornaments found in his possession on 4-10-1987 brought hy said three persons to the assessee. There is nothing to rebut the statements of said three persons brought different weight of gold ornaments to the assessee for remaking the new ornaments. Thus, the finding recorded by the IT authorities remains a finding on a wrong view of the burden of proof, by erroneous reading of the requirement of section 69A for the purpose of making additions of the value of the primary gold and gold ornaments in the hand....
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....based on such assumption. 4.6 It is settled law that suspicion, howsoever, strong cannot take place of proof and that assessment under the Act has to be made on the basis of material/evidence and not on the basis of assumptions/presumptions: · J.J. Enterprises v. CIT 254 ITR 216 (SC). · Assam Tea Co. V. ITO: 92 ITD 85 (Asr.) (SB) · Faqir Chand Chaman Lal v. ACIT: (2004) 1 SOT 914 (Asr.) (Appeal dismissed by P&H High Court in 262 ITR 295 and SLP dismissed by SC in 268 ITR) · CIT V. Paras Cotton Co .: 288 ITR 211 (Raj.) The Supreme Court in the case of Lalchand Bhagat Ambica Ram vs. CIT: 37 ITR 288 held that no addition could be made on the basis of conjectures, suspicion and surmises. In this case, since the circumstances relied upon by the assessing officer were found to be matters of pure conjecture, suspicion and surmises, the addition made in such circumstances was held to be unsustainable. The Supreme Court In the case of 37 ITR 271 (SC) Uma Charan Shaw & Bros. Co. v. CIT held Taking into consideration the entire circumstances of the case, we are satisfied that there was no material on which the Income-tax Officer could come * Page 20 %f 43. ....
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....sessee without any material and on pure guess and suspicion. The pertinent observations of the apex Court are reproduced hereunder: les Page 27 of 47 Document 10 As regards the second contention, we are in entire agreement with the learned Solicitor-General when he says that the Income-tax Officer is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence in a court of law, but there the agreement ends; because it is equally clear that in making the assessment under sub-section (3) of Section 23 of the Act, the Income-tax Officer is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. There must be something more than bare suspicion to support the assessment under Section 23(3). The rule of law on this subject has, in our opinion, been fairly and rightly stated by the Lahore High Court in the case of Seth Gurmukh Singh v. Commissioner of Income-tax, Punjab. In this case we are of the opinion that the Tribunal violated certain fundamental rules of justice in reaching its conclusions. Firstly, it did not disclose to the assesse....
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.... 6 Page 28 pf 47 Document 11 conjectures and surmises. The Tribunal has also held that the assessee, who accepted the gift for and on behalf of his daughters, was not privy to any information regarding the source of funds with Mr. B.P. Bhardwaj. One cannot be oblivious to the fact that such a large gift received from a foreign country is bound to raise suspicion but cannot disregard the fact that suspicion and doubt cannot replace proof or translate into reasons, much less reasons for invoking a deeming provision to hold that gifts represent the income of the assessee, particularly in the absence of relevant facts." I rely upon the judgement of the jurisdictional Delhi High Court in the case of CIT vs. Vivek Aggarwal: ITA No. 66 of 2014 where the assessce purchased property for consideration of Rs.3.70 lakhs. During the course of block assessment proceedings, the assessing officer rejected the transaction value and referred matter to DVO who in his report valued property at Rs.10.65 lakhs. Accordingly, addition of Rs.6.95 lakh was made to the assessee's income. On appeal, the Tribunal, however, set aside the said addition. On further appeal preferred by the Revenue, th....
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....ms of the MoUs, assessce had paid certain amount as part consideration. However, before the assessing officer, the assessee denied having made any payment and further 'R' and 'M' also denied having received any amount. The assessing officer however concluded that denial was only to escape payment of tax liabilities and added that amount to income of the assessee as unexplained expenditure. On appeal, the Commissioner (Appeals) as well as the Tribunal deleted the addition on the ground that there was not enough evidence to add that amount in the hands of the assessee, and it appeared from the facts that the property in question was eventually sold by 'R' and 'M' to 'D". The issue for consideration before the Hon'ble jurisdictional High Court was whether the addition was rightly deleted by the CIT(A)/ ITAT since there was no corroborative evidence to show that there was in fact transfer of money, The Court held the even if there was something wrong with some other transactions entered into, that would not give rise to an adverse inference insofar as the subject MoUs were concerned and dismissed the appeal preferred by the Revenue. The relevant observations of the Court are as u....
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....t. I also find that this issue was also dealt by Delhi Iligh Court in the case of CIT v Harjeev Aggarwal [2016] 70 taxmann.com 95 (Delhi) wherein the Court held as under :- "20. __ The words "evidence found as a result of search" would not tuke within its sweep statements recorded during seurch and seizure operations. However, the statements recorded would certainly constitute information and if such information is relatable to the evidence or material found during search, the same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the explanation to Section 132(4) of the Act. Page 32 91 47) Document 14 However, such statements on a standalone basis without reference to any other material discovered during search and seizure operations would not empower the AO to make a block assessment merely because any admission was made by the Assessee during search operation.' 4.8 In view of the above discussion and applying the legal position to the facts of the present case, I find that credits of Rs.89,50,000 received by the appellant from his father-in-law cannot be taxed under section 69A of the Act for the reason that thes....
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....be sustained only to the extent of the amount which is emanating from the incriminating WhatsApp chats of the appellant showing cash payments made by the appellant to his father-in-law and around the same time, credits in the bank account have been received by the appellant from his father-in-law. 4.11 On perusal of the assessment order, I find that in respect of credits of Rs.89,50,000 received by the appellant from his father-in-law, evidences were found only in respect of certain payments: Whether evidences found Date Amount (in Rs.) 07.04.2018 10,00,000 No evidence indicating that any cash payment of Rs.10,00,000 was made by the appellant to his father-in-law which has been received back in form of gift has been found and referred by the AO in the assessment order. In the absence of any evidence, these credits cannot be treated as unexplained money 1 Page 33.20 47 Document 16 under section 69A of the Act. It is seen that an incriminating WhatsApp chat has been found showing that the cash was paid by the appellant to his father-in-law. The chat was dated 04.07.2018 which is reproduced below: 06.07.2018 10,00,000 . .... Rakesh wil Call m....
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....the reason of transfer of funds from one account to another account by Shri Prabhjot Singh Kohli. The appellant has explained the source of credits in his hands and he is not liable to explain the source of funds in the hands of the donor. Further, Sh. Prabhjot Singh Kohli is a non-resident in India and his source of funds cannot be enquired by the AO. Had AO found any evidence that this gift of money pertains to cash sent back by the appellant, in that case, this amount could have been taxed under section 69A of the Act. However, this is not the case. In the absence of any evidence, these credits cannot be treated as unexplained money under section 69A of the Act. 15,00,000 It is seen that an incriminating WhatsApp chat has been found showing that the cash was paid by the appellant to his father-in-law. The chat was further confronted to the appellant and he admitted that he acknowledged the same. Thereafter, on 12.10.2018, the same amount was received in the bank account of the appellant from his father in law in form of gift. Hence, this money is unexplained under section 69A of the Act -Page 36 ef 67 Document 19 20.10.2018 5,00,000 No evidence indicating that any cash....
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.... as the donors had appeared before the Registrar and the gifts are duly registered. All gifts are absolute and without any lien of anyone. There is no evidence on record to prove that the assessee has favoured the donor in any manner whatsoever by acquiring the gifts in question. The capacity of any person does not mean how much they earn monthly or annually, but the term capacity has vided term and that can be perceived by how wealthy he is. All the formalities, as per law are met by the assessee and donors as well. All the donors have admitted that they are great admirer of the assessee as she is working for the upliftment of poor people." 1 also rely upon the decision of Andhra Pradesh High Court in the case of Pendurthi Chandrasekhar vs. DCIT: [2018] 407 ITR 179. In that case, the Court held that when the donor herself has given a confirmation letter clearly stating therein that she has transferred the amount to the account of the assessce and further declaring that she gave the said gift out of her natural love and affection towards her nephew, the AO ought not to have entertained further doubts. The relevant extracts of the decision of the High Court are as under: 20. I....
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....hat she was brought up by the assessee's parents, and her daughters having already been married off and in a well-to-do position, it cannot be said that such a gift falls bevond "human probability" test as quite often applied by the Courts. Hence, it is not permissible for the AO to judge the conduct of the donor sitting in his arm chair." I also rely upon the decision of Delhi Bench of the Tribunal in the case of Rajesh Kumar Gupta vs. ITO: ITA No.4684/Del/2018. The ITAT held that gift given by an old lady to her son for Europe tour cannot be disputed or disregarded on the basis of surmises and conjectures. The relevant extracts are as under: "10. On careful consideration of the above rival submissions, I am of the view that the assessee has submitted affidavit of his mother stating the clear facts that she is holding PAN, but had not filed the return of income during the period under considerution. The Id. Counsel submitted that since her income was lesser than the taxable limit, therefore, she was not filing the return of income for relevant AY 2014 15. In para 3 of the affidavit, Smt. Angoori Devi clearly stated that she had paid an amount of Rs.5 lakh to Shri Rajesh Kuma....
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.... of which the AO inferred that cash payment was made. 8.2. In this regard, the appellant has contended that assessee has been entered in to a construction contract with M/s Enn V Enn Designs Pvt Ltd for constructing a building on property no. C-2604, Sushant Lok-I, Gurgaon, Haryana on 27.11.2018 for total consideration of Rs. 2,00,00,000/- and produced copy of invoices and details of payments made. It was further submitted that no expenditure on construction of premises C-2604, Sushant Lok-I, Gurgaon was incurred during the period under consideration. Further, as regard the excel sheet, it was submitted that the aforesaid excel sheet does not reflect the date of payment, mode of payment, and much less particulars of party / material in respect of which alleged payment may have been made by M/s Enn V Enn Designs Pvt Ltd on account of construction carried on at the premises of assessee. It was submitted that neither the amounts recorded in the excel sheet are further supported by any documentary evidence. 8.3. I have considered the submissions of the appellant. I find that the AO has made the addition on the basis of excel sheet found from the residential and office premises of....
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....tton Co .: 288 ITR 211 (Raj.) Document 25 8.6. Further, while adjudicating the previous Grounds of Appeal, I have already discussed in detail that no addition could be made on the basis of conjectures, suspicion and surmises [Lalchand Bhagat Ambica Ram vs. CIT: 37 ITR 288 and Others]. 8.7. I also rely upon the decision of Hyderabad Bench of the Tribunal in the case of Sri Tarun Kumar Goyal vs. ACIT: ITA No. 456/Hyd/20. In that case, the Tribunal held that no addition could be made merely on the basis of dumb excel sheets containing rough notings and jottings. Extracts of the decision of the Hon'ble Tribunal are reproduced as under: 13. Lastly comes the crucial issue as to whether the impugned seized material /"Excel' sheet (not mentioning the assessees' names) forms a dumb document or not. We make it clear that the department has failed to corroborate the impugned seized document indicating assessee's alleged on money payment over and above the sale price itself, All it has done is to rely on their father's name only. It is nowhere clear as to whether it is an alleged document forming part of the books of account maintained in the regular course of business either by t....
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....ddition of Rs.1,16,90,723/-made by the AO is deleted. Therefore, the ground of appeal no. 8 is allowed. Document 27 Ground no. 3 5.1 I have carefully considered submissions filed by the appellant and Assessment Order. In this ground of appeal, the appellant has challenged addition of Rs. 16,18,460/- made by the AO on account of cash payments made for construction of immovable property situated at C-213, Sushant Lok-1, Gurgaon. The AO has stated that the cash amount was regularly paid by the appellant to M/s ENN V ENN Designs Pvt. Ltd. for the construction of various projects and has relied upon some excel sheet found from the residential and office premises of M/s Enn V Enn Designs Pvt Ltd. on the basis of which the AO inferred that cash payment was made. 5.2 In this regard, the appellant has contended that assessee has been entered in to a construction contract with M/s Enn V Enn Designs Pvt Ltd for constructing a building on property no. C-213, Sushant Lok-I, Gurgaon, Haryana on 27.11.2018 for total consideration of Rs. '1,02,42,236/ -. It was further submitted that no ' Page 40 of 47, Document 28 expenditure on construction of premises C-213, Sushant Lok-1, Gurg....
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....uspicion, howsoever, strong cannot take place of proof and that assessment under the Act has to be made on the basis of material/evidence and not on the basis of assumptions/presumptions: · J.J. Enterprises v. CIT 254 ITR 216 (SC). · Uma Charan Shaw & Bros. Co. v. CIT: 37 ITR 271 [SC) · Omar Salay Mohammad Sait vs. CIT: 37 ITR 151(SC) · Dhirajlal Girdharilal v CIT: 26 ITR 736 (SC) · Dhakeshwari Cotton Mills Ltd. v CIT: 26 ITR 775 (SC) · Assam Tea Co. V. ITO: 92 ITD 85 (Asr.) (SB) · Faqir Chand Chaman Lal v. ACIT: (2004) 1 SOT 914 (Asr.) (Appeal dismissed by P&H High Court in 262 ITR 295 and SI.P dismissed by SC in 268 ITR) · CIT V. Paras Cotton Co .: 288 ITR 211 (Raj.) The the Supreme Court in the case of Lalchand Bhagat Ambica Ram vs. CIT: 37 ITR 288 held that no addition could be made on the basis of conjectures, suspicion and surmises. In this case, since the circumstances relied upon by the assessing officer were found to be matters of pure conjecture, suspicion and surmises, the addition made in such circumstances was held to be unsustainable. The Supreme Court in the case of 37 ITR 271 (SC) Uma Charan Shaw & Bros. Co. v. C....
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....ny evidence or any material at all. The Court held that on the facts of the case, the ITO and the Appellate Tribunal erred in estimating the gross profit rate on sales of the assessee without any material and on pure guess and suspicion. The pertinent observations of the apex Court are reproduced hereunder: As regards the second contention, we are in entire agreement with the learned Solicitor-General when he says that the income-tax Officer is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence in a court of law, but there the agreement ends; because it is equally clear that in making the assessment under sub-section (3) of Section 23 of the Act, the Income-tax Officer is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. There must be something more than bare suspicion to support the assessment under Section 23(3). The rule of law on this subject has, in our opinion, been fairly and rightly stated by the Lahore High Court in the case of Seth Gurmukh Singh v. Commissioner of Income-tax, Punjab. In this cuse we are of the opin....
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....s under: "30. The Tribunal has held that there is no evidence or material to link Varinder Sharma to the assessee and that findings have been recorded on mere suspicion, conjectures and surmises. The Tribunal has also held that the assessee, who accepted the gift for and on behalf of his daughters, was not privy to any information regarding the source of funds with Mr. B.P. Bhardwaj. One cannot be oblivious to the fact that such a large gift received from a foreign country is bound to raise suspicion but cannot disregard the fact that suspicion and doubt cannot replace proof or translate into reasons, much less reasons for invoking a deeming provision to hold that gifts represent the income of the assessere, particularly in the absence of relevant fucts." In the case of CIT vs. Ved Prakash Choudhary: 169 Taxman 130, the facts before the Delhi High Court were that pursuant to a search at the residence of the assessce, two Memorandum of Understanding.(MoUs) were recovered, . Page 44 of 47 Document 32 which were entered into by assessce with 'R' and 'M' for purchase of agricultural land. In terms of the Molls, assessee had paid certain amount as part consideration. Ilowev....
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....45 of 47///5 * Larúre 419 Document 33 independent transactions and had nothing to do with the Molls, which were the subject-matter of discussion. Even if there was something wrong with some other transactions entered into, that would not give rise to an adverse inference insofar as the subject Molis are concerned. 14. In our opinion, no substantial question of law arises. 15. Dismissed" (emphasis supplied) Against the decision of the Delhi High Court, SLP has been dismissed by the Hon'ble Supreme Court (SLP No. CC-17329/ 2008 vide order dated 09.01.2009). I also rely upon the decision of Hyderabad Bench of the Tribunal in the case of Sri Tarun Kumar Goyal vs. ACIT: ITA No. 456/Hyd/20. In that case, the Tribunal held that no addition could be made merely on the basis of dumb excel sheets containing rough notings and jottings. Extracts of the decision of the Hon'ble Tribunal are reproduced as under: 13. Lastly comes the crucial issue as to whether the impugned seized material / 'Excel' sheet (not mentioning the assessees' names) forms a dumb document or not. We make it clear that the department has failed to corroborate the impugned seized document indicating....