TaxTMI 
TaxTMI 
2025 (12) TMI 1834
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....thout DIN. It is blatant contravention of the Circular No. 19/2019, dated 14-8-2019 issued by the CBDT 2. On the facts and circumstances of the case in law, Ld CIT(A) erred in confirming addition without referring to any incrementing document. Besides, he has not referred to any incriminating material in the satisfaction note issued to the Appellant. 3. On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming stand of A.O. for not sharing incrementing documents found during the course of search of rubberwala group which was pertained to the appellant. 4. On the facts and circumstances of the case in law, Ld CIT(A) erred in confirming stand of A.O. about the not providing statement and materials used by him against the appellant 5. On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming stand of A.O. about opportunity of cross examination of the person whose statements were used against the appellant 6. On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming addition of Rs. 10,12,350/- u/s 69 of the Act. 7. On the facts and circumstances of the case, the....
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....nd Promoter of Rubberwala Group) and that such data related to shops was maintained by him in excel sheets. Corroborating to the fact that data was being maintained by Shri Imran Ansari in excel sheet, during search proceedings at the residence of Shri Imran Ansari, a 16GB pen drive was retrieved from his possession which he accepted that it contained data maintained for the sale of shops in Platinum Mall. He also revealed that he used to take the parties to Shri Abrar Ahmed who after receiving cash confirms back to Shri Imran Ansari to update the diaries and excel file. 6. The assessee categorically denied having paid any cash to any person, disputed knowledge of the individuals named, and specifically asserted that the purchase was in joint ownership and his share, even if assumed, could not exceed one-third. Crucially, he sought the statements and adverse material relied upon and requested opportunity to cross-examine the persons whose depositions were invoked. These requests were not acceded to by the Assessing Officer. Based on the finding of search in case of RHIL Group and also the fact that RHIL Group had offered 8% of the overall unaccounted receipts., the ld AO made....
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....d person. In our opinion, mere entries in a third-party excel sheet cannot, by themselves, constitute substantive evidence unless duly corroborated, authenticated, and linked to the assessee by independent and cogent material. No corroborative evidence of actual cash payment by the assessee exists. Neither the pen drive nor the statements of Shri Imran Ansari or Shri Tabrez Shaikh were supplied to the assessee. The CIT(A)'s approach of merely restricting the addition to 1/3rd does not cure the fundamental infirmity of absence of legally admissible evidence against the assessee. It is trite law that suspicion, however strong, cannot take the place of proof. Third-party admissions, untested and uncorroborated, cannot form the sole basis of an addition under section 69. The Revenue has failed to discharge the burden cast upon it to bring on record credible, independent, and cogent material establishing that the assessee made any payment in cash over and above the recorded consideration. The coordinate Bench of Tribunal in the case of assessee Pravin Khetaramm Purohit v. DCIT (supra) held that :- "8. We have heard the arguments for both the parties and have also perused th....
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....r section 132 of the I.T. Act, 1961. His statement was also recorded on oath at his residence. Vide question no. 11 of the said statement dt. 17.03.2021, Shri Imran Ansari was questioned about his roles and responsibilities in M/s. Rubberwala Housing & Infrastructure Ltd (RHIL). In response, Shri Imran Ansari stated that he has been working with Rubberwala group of entities since 2010 and inter-alia handling sale and registration of the shops in "PlatinumMall" Project of M/s. Rubberwala Housing & Infrastructure Ltd (RHIL). 5.3. Shri Imran Ansari in his response to question no. 13 & 14 of the said statement explained the complete procedure of the of the sale of shops in the "Platinum Mall" project. While explaining further about the price structure of the shops, Shri Imran Ansari in response to Q. no. 15 categorically revealed that the total price of the shops contains cash component and banking channel component, and these components are decided by Shri Tabrez Shaikh (Director/CMD of RHIL and Promoter of Rubberwala Group). On probing further, Shri Imran Ansari, in response to Q. no. 16, stated that these prices, as decided by Shri Tabrez Shaikh, are communicated to him ora....
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....jesh Jain. 5.5. Regarding the frequency of updating the said excel file/sheet, Shri Imran Ansari, in response to Q. no. 25, stated that this sheet is updated on the same day when a payment is received either in cash or cheque (or banking channel). The column A to AR of the sheet "Master" are stated to be updated till 16.03.2021 and other sheets of the said excel file are also stated to be updated till 16.03.2021. It is revealed in the above response that he takes the parties to ShriAbrar Ahmed (who during the search established to be a person handing cash for the Rubberwala Group). ShriAbrar Ahmed, after receiving the cash confirms to Shri Imran Ansari who update the diariesand the said excel file. Such detailed mechanism in place further upholds the facts stated by Shri Imran Ansari on oath. It is also important to note here that Shri Imran Ansari also used to call and follow up with the buyers on the numbers saved in his data. As aforementioned, the number, for the shops for which the assessee has paid the cash component, is mentioned as 9892196071, which is the assessee's own number. Thus, it makes clear that for the cash payment part, for all the above mentioned 27....
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....n should be deleted. 16. We heard Ld D.R and perused the record. We notice that the AO has made the addition on the basis of evidence found in the premises of third party and also on the basis of deposition made by the employee of the third party. No corroborative material was brought on record to support the statement so given, which is mandatory when the assessee denies any such payment. Further, the AO also did not provide opportunity of cross-examination to the assessee, even after the said request was made by the assessee. Under these set of facts, we are of the view that the impugned addition of Rs. 18,64,200/- cannot be sustained. In this regard, we may take support from the decision rendered by SMC bench of Mumbai Tribunal in the case of Naren Premchang Nagda vs. ITO (IT Appeal No. 3265/Mum/2015 dated 08-07-2016), wherein an identical issue was decided as under: - 17. We also notice that the AO did not provide opportunity to cross examine the persons from Rubberwala group, on whose statements the AO had placed reliance upon. The Hon'ble Supreme Court has held in the case of Andaman Timber Industries vs. Commissioner of Central Excise (2015) (62 taxmann.com....
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....iance in this regard has been placed on the decision in case of Heena Dashrath Jhanglani ITA no.1665/Mum/2018 (Assessment Year : 2007- 08) wherein the Coordinate Bench of ITAT had decided the issue in favour of assessee and the relevant portion is being reproduced herein below: 10. I have considered rival submissions and perused material on record. Undisputedly, the genesis of the addition made of 42 lakh on account of alleged payment of on-money in cash towards purchase of a flat lies in a search and seizure operation conducted in case of Hiranandani Group and related persons. Though, in the assessment order the Assessing Officer has not discussed in detail the nature of incriminating material/ evidence available on record to indicate payment of on-money in cash by the assessee to M/s. Crescendo Associates, however, from the show cause notice dated 4th March 2015, which is reproduced by the Assessing Officer in the assessment order, it appears that the incriminating materials are in the form of pen drive found and seized from the residence of one of the employees of Hiranandani Group and a statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani, ....
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....icer has heavily relied upon the statement recorded from Shri Niranjan Hiranandani, for making the disputed addition. However, it is the allegation of the assessee, which prima-facie appears to be correct, that the Assessing Officer has not provided the full text of such statement recorded and has also not allowed the assessee an opportunity to cross-examine Shri Niranjan Hiranandani, and other persons whose statements were relied upon. This, in my view, is in gross violation of rules of natural justice and against the basic principle of law. In this context, I may refer to the decision of the Tribunal, Mumbai Bench, in Nikhil Vinod Agarwal (supra). Thus, for the aforesaid reason, the addition made cannot be sustained. 11. Even otherwise also, the addition made is unsustainable because of the following reasons. As discussed earlier in the order, the basis for addition on account of on-money is the information contained in the pen drive found during the search and seizure operation and the statement recorded under section 132(4) of the Act. As regards the information contained in the pen drive, it is the contention of the assessee that the said pen drive was not found from ....
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....nce collected by revenue at the builder's office is compliant with the requirement of section 65B of Evidence Act regarding admissibility of electronic evidence. Hence, I set aside the orders of the authority below and direct that the addition be deleted. 16. In the case of Mrs. Mamta Sharad Gupta, ITA No.1553/M/2021 Assessment Year: 2011-12, wherein the coordinate bench has held as under: 9. Since the sole issue raised in this appeal is covered by the order (supra) passed by the co-ordinate Bench of the Tribunal addition made in this case is not sustainable. Because the addition is made merely on the basis of statement made by one Mr. Suraj Parmar, one of the promoters of Cosmos Group under section 132(4) of the Act without any corroboration. Moreover, statement or any material seized during the course of search under section 132(4) of the Act can only be used against Mr. Suraj Parmar of Cosmos Group and not against the assessee without any corroboration. Excel sheet alleged to have been recovered from the office of builders is also not admissible being not proved under section 65 of the Evidence Act. So in view of the matter, addition made by the AO and sust....