TaxTMI 
TaxTMI 
2026 (9) TMI 449
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....u/s. 147 read with section 69A of the Income-tax Act, 1961 ('the Act') dated 18.03.2025for Assessment Year 2020-21. 2. Assessee has raised the following grounds: 1. Order Bad in Law The learned CIT(A) erred in confirming the addition of Rs. 5,07,073 u/s 69A of Income tax Act made by the Assessing Officer by assuming the entries found in the loose papers and diaries at the premises of one of the buyers of assessee during search operation and statement of various key Persons and other officers of the buyer recorded on oath and also alleging the involvement of assessee in over invoicing and payment of commission in cash to CMD of the buyers for the inflated invoice value @ a percentage appeared noted in such loose paper an....
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....ements without allowing cross-examination constitutes violation of the principles of natural justice. 6. Addition Based on Suspicion The learned CIT(A) erred in confirming the addition which was made purely on suspicion, conjectures and surmises without any supporting evidence. 3. Brief facts of the case are that assessee is engaged in supplying automotive NVH and interior components. It filed its return of income on 02.02.2021, reporting total income as Nil and claiming losses to be carried forward at Rs. 1,37,14,972/-. A search and survey operation under section 132/133A of the Act was conducted on 19.05.2023 in the cases of Bharat Seats Limited (BSL), Sharda Motors Industries Limited (SMIL), and others. Information w....
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....assessee is in appeal before the Tribunal. 4. Ld. Counsel for the assessee contended that the primary statutory requirements for invoking Section 69A are completely absent. Section 69A requires that assessee must be found to be the owner of any money, bullion, jewellery or other valuable article which is not recorded in the books of account. In the instant case, no search was conducted on the assessee, no cash or asset was found or recovered from the assessee and no money trail or bank channel movement was established. The entire basis of the addition is third-party material seized from the premises of BSL. Third-party loose papers and uncorroborated digital entries have weak evidentiary value and cannot be treated as "speaking documents....
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....ontentions, perused the material available on record and analyzed the orders of the authorities below. The fundamental question that arises for our consideration is whether an addition can be sustained under Section 69A on the basis of alleged over-invoicing notes recovered during a search on a third party. To appreciate the legal matrix, it is imperative to examine the statutory mandate of Section 69A of the Act, which reads as under: "69A. Unexplained money, etc.-Where in any financial year 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, an....
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....nue's charge itself is self-contradictory regarding the applicability of section 69A. The allegation arising from the search on BSL is that assessee over-invoiced its sales and returned a portion of the invoice value (3%) in cash back to the CMD/promoters of BSL. If assessee had allegedly passed on cash back to BSL/its promoters out of billed funds, the money resides with BSL/its CMD and not with the assessee. By no stretch of imagination can an allegation of over-invoicing sales and returning cash to a customer translate into an addition under Section 69A as "unexplained money owned by the assessee". 6. It is also a well-settled proposition of law that loose sheets, rough diaries and digital excel entries recovered from third-party ....