TaxTMI 
TaxTMI 
2026 (5) TMI 939
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.... or evidence to substantiate such estimation. 2. On the fact and circumstances of the case as well as in law ld. CIT(A) has erred in confirming the action of the ld. Assessing Officer in making an addition of Rs. 15,00,000/- on account of transaction with Vilas Pawar as alleged undisclosed income of the Assessee, without considering the facts and circumstances of the case. 3. On facts and circumstances of the case as well as in law ld. CIT(A) has erred in restricting the addition made by the ld. Assessing Officer to the extent of Rs. 1,20,80,508/- by treating the transaction with M/s Parekh Ornaments as alleged undisclosed income, without considering the facts and circumstances of the case. 4. On facts and circumstances of the case as well as in law ld. CIT(A) has erred in confirming the action of the ld. Assessing Officer in making an addition relying upon statement of third parties without confirming such statement to the Assessee and without providing copy of such statement material. 5. On facts and circumstances of the case as well as in law id CIT(A)as well as ld. Assessing officer has erred in not appreciating the fact that the statement re....
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.... account of transaction with Mr. Vilas Pawar. 5. We have heard the counsels for both parties, perused the material placed on record, the judgments cited before us, and the order passed by the Revenue Authorities. From the records, we noticed that during the course of search proceedings, some whatsapp communication with Vilas Pawar from the I-phone of the Assessee was found by the department. On the basis of the said whatsapp communication, the department alleged that the Assessee has kept his unaccounted income in the form of cash with Shri Vilas Pawar and accordingly made the addition of Rs. 15,00,000/- as alleged Undisclosed income. Summary of these transaction reproduced by AO on page 24 of the assessment order. 6. At the outset we would like to submit that message exchanged on WhatsApp did not have any evidentiary value. And relied upon the decision of Apex court on July 14, 2021, stated that there is no evidential value of any chats or messages exchanged between people over WhatsApp. Specially no certificate U/s 658 of the Indian Evidence Act, 1972 obtained by the search team for seizure of digital evidence. Therefore, no addition can be made based on whatsapp chat. Reli....
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....5: 10. These grounds raised by the Assessee are interrelated and interconnected and related to challenging the order of Id. CIT (Appeal) in restricting the additions made by the AO to the extent of Rs. 1,20,80,508/- by treating the transaction with M/s Parikh Ornaments as undisclosed income of the Assessee. Therefore, we have decided to adjudicate these grounds through the present consolidated order. 11. We have heard the counsels for both parties, perused the material placed on record, the judgments cited before us, and the order passed by the Revenue Authorities. From the records, we noticed that the fact of the case is that during the course of search proceedings, certain documents were found, on the basis of the same, the Assessing Officer alleged that the Assessee has kept cash with the Mukesh Parekh/ Parekh Ornaments. The said allegation was made only on the basis of the statement recorded u/s. 132(4) of Assessee and statement recorded u/s. 131 of Shri Mukesh Parekh, based on which unaccounted income of Rs. 4,05,80,508/ (Rs. 3,75,80,508/- for A.Y. 2016-17 & Rs. 30,00,000/- for A.Y. 2017-18) with M/s. Parekh Ornaments. Assessee asked for the copy of said seized documents....
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....ged for construction of Restaurant at Belapur. Out of this 2.5 crores are to be arranged from the bank loan and Rs. 35 lakhs are to be arranged from sale of property in the name of family members. To prove his contention, the Assessee also stated that he took loan for this transaction from TJSC Co-operative Bank and submitted sanction letter from the TJSC Co-operative Bank during the course of the assessment proceedings, copy of which placed on page 4-7 of paper book. Here it is pertinent to note that even Loan papers were seized during the course of search proceedings. Thus, with documents the Assessee proved that Rs. 2.85 crore represents the amount to be arranged for construction of Restaurant at Belapur, therefore, it does not represent unaccounted income of the Assessee income. 15. But the Assessing Officer has not accepted the contention of Assessee and without providing any cogent reason and without giving any adverse comment or finding simply rejected the explanation of the Assessee. While making an addition, the Assessing Officer simply mentioned in the assessment order that: (pg no 28 of AO) "the reply of the assessee is considered but not found to be tenable.....
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....his contention. He has not brought out any concrete evidence in support of addition. 17. Ld. CIT(A) accepted contention of the Assessee on handwritten part for Rs. 2.85 crore and deleted the addition however, for other part he worked out peak credit amount and confirmed addition to the extent of Rs. 1.20 crore. However, Ld CIT(A) has not given any finding on cross examination and not providing copy of seized documents and statement of third party based on which addition made by the AO. 18. Therefore, considering the totality of the facts and circumstances as discussed by us as above we allow the present ground raised by the Assessee and direct the AO to delete the additions. Appeal filed by the Revenue Ground no. 1 19. This ground raised by the revenue related to challenging the order of CIT (Appeal) in treating the professional fee of Rs. 16,67,500/- being the income of Smt. Jayshree Rasal instead of treating it the income of the Assessee. 20. We have heard the counsels for both parties, perused the material placed on record, the judgments cited before us, and the order passed by the Revenue Authorities. From the records, we noticed that the AO has made the addit....
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....th the documents that the said income does not belongs to him and the same was discharged by the Assessee. The Assessee of had already provided the documents to prove that the said professional Income belonged to the Assessee's wife. Therefore, it is not possible to allege that her professional income is Assessee's unaccounted income. AO did not carry out any enquiry to verify the same with Adv. Narichandani who paid this professional fee to her. Further this income was already taxed in the hands of the Assessee wife and making an addition again in the hands of Assessee tantamount the double taxation of the same income, which is not permissible under law. In other words, the Assessee submits that under the Act the same income cannot be taxed twice. 23. Ld. CIT(A) discussed this issue on page 13 para 8.2.2 and followed decision of earlier year where similar addition made and revenue not challenged the same due to tax effect. Ld. CIT(A) held that once the income already in the hands of spouse of the Assessee and AO has not disturbed the said returned income of spouse, same income cannot be taxed in the hands of Assessee. 24. Therefore, considering the totality of the fa....
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.... on the basis of statement. The said addition is not sustainable for the following reasons: a. Addition was not made on the basis of the incriminating documents found during the course of search proceedings; b. Addition was made on the basis of the statement of Assessee recorded u/s, 132(4) of the Act, which was retracted immediately and such retraction filed with Investigation ream; c. No evidence was produced by the Ld AO why the retraction is not to be accepted; d. No evidence was brought by the Ld AO in support of addition; e. No adverse comment was given by the Ld AO on the evidence produced by the Assessee during the course of assessment proceedings; f. No further enquiry was made by the Ld. AO also on the request of the Assessee; g. Third party statement was not provided to the Assessee; h. No opportunity of cross examination to third party was provided to Assessee; i. No evidence was found which shows that the Assessee earned the undisclosed income. 29. Ld. CIT(A) discussed this issue on page 21 para 8.3.2 and appreciated the documentary evidence filed by the Assessee and restricted the addition to 1....
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....t from the agricultural income offered in the return of income of his father and brother. In spite of asking, the Assessing Officer failed to provide the details. He simply deducted the certain amount from the agricultural income offered in return of Income, how that figure was arrived by him was not disclosed to the assessee. This, itself shows that the addition made by the Assessing Officer is without any basis. Any addition made in assessment order without any basis is not sustainable under the Act. 34. The Assessing Officer has made the addition on the plea that the assessee filed the return of income of their family member and they are not having any idea of the return filed on their behalf. In this regard assessee submit that the assessee is the elder son of the Vilas Rasal. His father and brother are the agriculturalist and they are not aware of the Income Tax law. They don't understand the importance of filling Income tax returns because of lack of knowledge and understanding of the process, hence, being an elder son the assessee took the responsibility of filing return of his family members. All the returns are being filed at Sangli Income Tax office only. The Asses....
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....ation of the Assessing Officer is Incorrect and without any basis. 36. The assessee further submit that assessee's family members specifically stated in the statement recorded u/s. 132(4), that they are agriculturist and their annual agriculture income is about Rs. 25/- lakhs and assessee has no share in the agricultural income. They also provided the details of the crops cultivated by them and also stated that the assessee does not own any property at native place. All these details are on record than also the Assessing Officer considered their agricultural income as unaccounted Income of the assessee on what basis? 37. The assessee further submitted that during the course of assessment proceedings the assessee also submitted the further evidence such as 7/12 extracts of the agricultural land of more than 10 acres owned by family members of the assessee along with details of crops produced from time to time, Contract agreements for agriculture land taken from other farmers, Photographs of the agriculture site, bills for installation of irrigation pump of about 13 HP, bills for purchase of tractor, copies of sample receipts from sugar factories in their names, details of ....