TaxTMI 
TaxTMI 
2026 (6) TMI 1114
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....additions are about the unaccounted cash generated from capitation fee receipts received in cash and certain cash payments booked in the name of the assessee. The AO based on the statement given by the accountant, made the additions. The AO had also discussed about the statements recorded from certain parents whose children sought for admission in the medical college run by the trust. The assessee sought for the cross examination of the accountant. The revenue had made the substantial addition in the hands of the trust and made similar additions on protective basis in the hands of the trustees. The AO had also made similar protective additions for the rest of the assessment years. 3. The trust had challenged the said substantive additions before the Ld.CIT(A) which were confirmed by the said authority. Thereafter, the trust files second appeals before this Tribunal and the Tribunal vide an order dated 16/08/2021 in ITA Nos. 503, 504, 505/Bang/2020 had held that the materials seized are having no evidentiary value and cannot be taken as a sole basis for determination of the undisclosed income of the trust. The Tribunal also held that there is no corroborative evidence to accept t....
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....any person. Our observations are that these seized material consisting of loose sheets and note books and the statement recorded from Mr. Goli Srinivas. The assessee vide letter dated 22.02.2017 and 09.12.2017 asked for cross-examination of Shri Goli Srinivas which was not provided by the authority. The contention of the ld. DR is that Mr. Goli Srinivas being employee of the assessee, it is not necessary to provide such an opportunity to the assessee. The AO has referred to these seized materials in paras 4, 6, 8, 15, 16, 18, 19, 36-40 of his order. According to the AO, A/DUU/01 shows the details of students, amounts collected for admission and duration of payments. However, it does not contain the name of assessee or signature of any person authorised by the assessee. They are mere non-speaking loose sheets containing unsubstantiated jottings having no evidentiary value. First of all to come to the conclusion that these are full proof documents, the department should have given cross-examination of the author of these loose sheets which was not provided. As held by the Hon'ble Delhi High Court in Principal Commissioner of Income-tax v. Best Infrastructure (India) (P.) Ltd., 397 IT....
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....TAT MUMBAI / [2006] 8 SOT 691 (MUM.) that even if the assessee was provided a copy of the statement recorded by the revenue on the spur of the moment, that should not be treated as an effective opportunity given to the assessee. In that case the Tribunal relied upon the judgment of the Hon'ble Allahabad High Court in the case of Gargi Din Jwala Prasad v. CIT [1974] 96 ITR 97 (All) wherein it was held that permission to cross-examine witness given, but names of the witnesses and substance of the statement made by them not given is not a proper opportunity and on that ground assessment was vitiated by the principles of natural justice as permission to cross-examine all the witnesses are illusory. Further in the present case, these seized material A/DUU/1 to 4 though did not contain the name of assessee or signature of any person, they are merely unsubstantiated loose sheets. As held by the Tribunal in the case of ACIT v. Layers Exports P. Ltd [2017] 53 ITR (Trib) 416 (Mumbai), addition cannot be sustained merely on the basis of rough noting made on few loose sheets, unless AO brings on record some independent and corroborative material to prove irrefutably that the said noting reveal....
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....ied out in pursuance of search, no addition can be made simply on the basis of uncorroborated noting in loose papers found during search because the addition on account of alleged receipts made simply on the basis of uncorroborated noting and scribbling on loose sheets of papers made by some unidentified person and having no evidentiary value, is unsustainable and bad-in-law." 10. The Tribunal had considered the seized papers and gave a finding that they don't have any evidentiary value and cannot be taken as a sole basis for determination of undisclosed income. The Tribunal further held that when the loose sheets were seized, the onus rests on the revenue to collect cogent evidence to corroborate the noting therein whereas in the present case there is no corroborative evidences to prove conclusively that the noting in the seized papers reveal the unaccounted capitation fees / receipts of the assessee. The Tribunal also gave a finding that no circumstantial evidence like the unaccounted cash, jewellery or investments outside the books of accounts was found in the course of search. 11. The Tribunal finally gave a finding as follows: "247. Being so, in our opinion the ....
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....ce on the seized material is not proper and all the additions on the basis of the above are deleted in all the assessment years since,: i) no opportunity to cross-examine the persons whose statements have been relied upon is afforded; ii) some of the statements have been recorded under section 131 by the authorized officer subsequent to completion of search; iii) there is no documentary evidence either to support the statements of Sri. Goli V. Srinivas or of the parents of the students; and iv) the seized material are in the form of various loose sheets, scribblings, jottings and Excel sheets taken from the computer having no signature or authorization from the assessee's side. These are unsubstantiated documents and there is nothing to suggest any undisclosed assets of assessee found during the course of search. More so, search action not resulted in recovery of any undisclosed assets in the form of landed property, building, investments, money, bullion, jewellery or any kind of movable or immovable assets." 12. The Ld.CIT(A) had considered the said findings and satisfied himself that the additions in the hands of the assessee as protective a....