TaxTMI 
TaxTMI 
2026 (10) TMI 538
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....e barred by limitation by 20 days in respect of appeal for the Asst. year 2017-18 and 21 days in other four appeals. The Revenue has filed petitions seeking condonation of the delay in filing the respective appeals, duly explaining the circumstances which occasioned such delay. We have heard the rival submissions and carefully perused the petitions filed by the Revenue, along with the reasons adduced therein for seeking condonation of delay. 3. Upon consideration of the explanations furnished by the Revenue and the facts and circumstances of the case, we are satisfied that the Revenue was prevented by sufficient cause from presenting the appeals within the prescribed period of limitation. It is a settled principle of law that, while considering an application for condonation of delay, the expression "sufficient cause" is required to be construed in a manner that advances the cause of substantial justice, provided the delay is neither deliberate nor attributable to gross negligence or lack of bona fides. In the present cases, having regard to the reasons explained in the condonation petitions, we find that the delay has been satisfactorily explained and that sufficient cause has ....
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....directions of its Chairman. He further stated that representatives of the Casagrand Group used to deliver and collect cash from the office of the Appaswamy Group. However, he expressed his lack of knowledge regarding the nature and purpose of such transactions. 8. During the course of reassessment proceedings, the AO examined the entries contained in the seized Excel sheets and compared the same with certain transactions recorded in the books of account of the assessee. In particular, the AO referred to a transaction dated 16.12.2016 involving receipt of substantial amounts through banking channels from the Casagrand Group. The AO interpreted the said transaction in conjunction with the narration "cash conversion" appearing in the seized Excel sheets and considered the same as corroborative evidence of the alleged cash dealings between the two groups. 9. On the basis of the seized electronic records, the statement recorded u/s. 132(4) of the Act and the transactions appearing in the books of account, the AO worked out the alleged cash loans advanced and interest income earned by the assessee for the respective assessment years. Accordingly, the AO issued show-cause notices pr....
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.... AO further observed that certain entries in the seized electronic records stood corroborated by transactions appearing in the assessee's books of account. Accordingly, the AO concluded that the assessee had advanced unaccounted cash loans to the Casagrand Group and earned undisclosed interest income thereon. 14. Consequently, the AO made the following additions for the assessment years under consideration: AY Undisclosed interest income (Rs.) Unexplained investment in the form of cash loans/receipts u/s. 69 (Rs.) 2017-18 26,00,000 5,50,00,000 2018-19 44,50,000 3,25,00,000 2019-20 3,00,000 9,43,64,500 2020-21 - - 2021-22 - 6,00,00,000 15. The second issue arising for consideration relates to the alleged collection of unaccounted cash from customers in connection with the sale of apartments. During the course of search conducted at the corporate office and other premises of the Appaswamy Group, various electronic devices, loose sheets, books of account and other documents were found and seized. On examination of the mobile phones belonging to certain sales managers, the search team found WhatsApp conversations with cust....
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....h from customers over and above the consideration recorded in its books and suppressing the actual sale consideration by subsequently reducing the prices recorded in the ERP system. 20. For the purpose of quantifying the alleged unaccounted cash receipts, the AO compared the rates appearing in the master price sheets or the inferred actual sale rates, including median rates, with the final sale prices recorded in the ERP system. After allowing a standard discount of 5%, the AO treated the difference as representing unaccounted cash received from customers. On this basis, the alleged cash receipts were quantified project-wise and year-wise. The aggregate unaccounted cash receipts attributed to the assessee for the period covering assessment years 2019-20 to 2024-25 were worked out at Rs. 17,53,84,476, out of which the following amounts were attributed to the assessment years presently under consideration: AY Alleged undisclosed income from sale of flats (Rs.) 2019-20 82,92,000 2020-21 3,49,31,150 2021-22 37,60,100 21. Accordingly, the AO issued show-cause notices proposing to treat the aforesaid amounts as undisclosed income arising from the sale of apa....
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...., the AO, after considering the seized material, statements recorded during the search and explanations furnished by the assessee, completed the assessment for assessment years 2017-18 to 2021-22 by making additions towards alleged undisclosed interest income, unexplained investment in the form of cash loans/receipts advanced to the Casagrand Group and alleged unaccounted cash receipts from the sale of apartments. The year-wise additions made by the AO in respect of the aforesaid two issues are summarized hereunder: 27. Aggrieved by the additions made in the assessment orders, the assessee has challenged the action of the AO in the appeal before the Ld.CIT(A). 28. Aggrieved by the additions made by the AO, the assessee preferred appeals before the ld.CIT(A). The ld.CIT(A), vide consolidated order dated 16.04.2026 passed u/s. 250 of the Act, considered the submissions of the assessee, the material available on record and the judicial precedents relied upon, and adjudicated the two substantive issues as under. 29. In respect of the additions made towards alleged cash loans advanced to the Casagrand Group and undisclosed interest income, the ld.CIT(A) observed that the additi....
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....t the recorded sale consideration was supported by registered documents, ERP records and bank receipts. The ld.CIT(A) held that the substitution of the actual sale consideration with notional selling prices, by adopting median rates and extrapolating the alleged differences, was based on assumptions and estimates without cogent supporting evidence. Accordingly, the ld.CIT(A) held that the additions made towards alleged unaccounted cash receipts from the sale of apartments were unsustainable both on facts and in law. Consequently, the ld.CIT(A) directed the AO to delete the additions made for assessment years 2019-20, 2020-21 and 2021-22, respectively. 33. Thus, the ld.CIT(A) deleted the entire additions made by the AO on both the aforesaid substantive issues for the assessment years under consideration. Aggrieved by the relief granted by the ld.CIT(A), the Revenue is in appeal before us. Considering the commonality of the issues involved in the present appeals and the similarity of the grounds raised therein, as well as the submissions advanced by the learned representatives of both the parties, we deem it appropriate to adjudicate the appeals issue-wise, for the sake of conveni....
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....us and fundamental error which rendered the impugned addition(s) to be untenable." 6.2.16 Further, the Hon'ble jurisdictional tribunal in the case of M/s. Bannari Amman Educational Trust v. ACIT, Central Circle-3(2) Chennai in 3310 to 3314/Chny/2024 dated 14.08.2025 has relied on above decision of the Hon'ble Apex Court. Therefore, in view of the above specific decision of the jurisdictional tribunal, the undersigned holds that the failure of the AO to grant cross-examination, despite a specific request by the appellant, constitutes a procedural infirmity and a violation of the principles of natural justice. 6.2.17 A careful and comprehensive examination of the material on record clearly demonstrates that the additions made by the AO are devoid of any corroborative evidence. In the present case, the appellant was subjected to an extensive and elaborate search operation u/s 132 of the Act, covering its business premises as well as the residences of key personnel over multiple days. Despite such a detailed and intrusive search, no incriminating material whatsoever was unearthed in the hands of the appellant. Specifically, no unaccounted cash was found or seized, no ....
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.... statement recorded from Shri T.V. Sathyanarayana u/s 132(4) of the Act to support the addition(s) made on this issue. However, it is an undisputed fact that the said statement was subsequently retracted by the deponent. The retraction has not been made as a mere afterthought, but is substantiated by medical records indicating that the statement was recorded while the deponent was under considerable physical and mental strain, thereby raising serious doubts as to the voluntariness and reliability of the statement at the time it was made. 6.2.21 In law, a statement recorded u/s 132(4) of the Act, though relevant, does not attain conclusive evidentiary status, particularly when it stands retracted at a later stage with plausible explanation. It is a settled principle that a retracted statement cannot, by itself, form the sole foundation for making an addition, unless it is supported by cogent, independent, and credible material evidence establishing the correctness of the contents of such statement. The burden, in such circumstances, lies heavily on the AO to demonstrate that the admission made earlier was true and was not influenced by extraneous factors. In this regard the....
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.... statement is not a voluntary statement and has been retracted" * Hon'ble Gujarat High Court in the case of Kailashben Mangarlal Chokshi Vs.CIT [2008] 174 Taxmann 466 (Guj.) / (2008) [14 DTR 257 has held that "Income from undisclosed sources-Addition-Addition on the basis of retracted statement under s. 132(4)-Statement under s. 132(4) recorded at midnight on the date of search-Same retracted by assessee after two months on the ground that it was recorded under coercion and duress-Explanation in the form of affidavit also furnished-AO did not consider the explanation on the ground that retraction was made after a delay of two months and made addition on the basis of statement under s. 132(4)-Not justified in the facts and circumstances of the case-It is too much to give any credit to a statement recorded at midnight when a person may not be in a position to make any correct or conscious disclosure". 6.2.22 In the present case, the undersigned notes that no such independent corroboration has been brought on record by the AO. There is a complete absence of supporting material such as documentary evidence, transactional records, or any demonstrable flow ....
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....ation, remain mere notings without probative value and cannot be elevated to the status of admissible evidence capable of sustaining an addition. Applying the above settled position to the facts of the present case, it is apparent that the AO has not discharged the burden cast upon him to corroborate the contents of the thirdparty material. No supporting documentation, independent enquiry, or tangible evidence has been brought on record to validate the allegations drawn from such material. In the absence of any linkage established between the appellant and the purported transactions, the additions made are clearly contrary to the well-established legal principles governing evidentiary standards in income-tax proceedings. 6.2.25 On an overall consideration of the facts and the legal position, it emerges that the additions towards alleged undisclosed interest income and unexplained cash loans or receipts are founded entirely on unverified thirdparty documents and a statement that has subsequently been retracted. Both these elements, in the absence of independent corroboration, lack the evidentiary strength required to justify an addition. There is nothing on record to demons....
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....the ld.DR vehemently prayed that the orders of the ld.CIT(A) be set aside, the additions made by the AO towards undisclosed interest income and unexplained cash loans/receipts be restored, and the appeals preferred by the Revenue be allowed. 38. Per contra, the ld.AR of the assessee, placing reliance upon the detailed written submissions filed before us, strongly supported the impugned orders passed by the ld.CIT(A). The ld.AR submitted that the ld.CIT(A), after examining the assessment orders, the material relied upon by the AO, the statements recorded during the course of search proceedings and the explanations furnished by the assessee, had passed detailed and well-reasoned orders deleting the impugned additions. It was submitted that the ld.CIT(A) had duly considered and dealt with the very contentions now reiterated by the ld.DR before this Tribunal. 39. The ld. AR further submitted that the findings recorded by the ld.CIT(A) were based upon a proper appreciation of the facts and circumstances of the case and the material available on record. According to the ld. AR, the ld.CIT(A) had examined the basis on which the AO proceeded to make the additions towards alleged undi....
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....ting to cash inflows and outflows, including references purportedly pertaining to the Appaswamy Group. The Investigation Wing interpreted these entries as evidencing cash loans advanced by the assessee to the Casagrand Group, repayment of such loans and payment of interest thereon. The AO further placed reliance upon the statement of Shri T.V. Sathyanarayana, an employee of the Appaswamy Group, recorded u/s. 132(4) of the Act, and certain transactions reflected in the assessee's regular books of account. On this basis, the AO concluded that the assessee had entered into unaccounted cash transactions with the Casagrand Group and consequently made additions towards the alleged principal amounts and interest income for the respective assessment years. 44. The ld.CIT(A), upon examining the material relied upon by the AO and the explanations furnished by the assessee, found that the additions were not supported by independent and credible evidence establishing the alleged cash transactions. The ld.CIT(A) further held that the statutory presumptions u/s. 132(4A) and 292C of the Act could not automatically be invoked against the assessee in respect of electronic records recovered f....
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....ed cash loans or received the alleged interest. The AO has not brought on record any material establishing such a nexus. We, therefore, concur with the ld.CIT(A) that the statutory presumptions cannot be invoked to fasten the impugned tax liability upon the assessee merely on the strength of the third-party electronic records. 47. Our aforesaid conclusion is consistent with the principle explained by the Hon'ble Supreme Court in CBI v. V.C. Shukla [(1998) 3 SCC 410] and Common Cause (A Registered Society) v. Union of India [(2017) 394 ITR 220 (SC)], concerning the evidentiary limitations of uncorroborated entries in loose sheets and other records. Although the rules governing admissibility of evidence in ordinary judicial proceedings and income-tax proceedings are not identical, the underlying principle that an entry made by one person cannot, without reliable supporting evidence, establish the liability of another person is relevant to the present controversy. An electronic record may furnish information warranting investigation; however, the mere existence of such a record does not establish the actual occurrence of every transaction mentioned therein. The AO was, therefor....
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.... Group. 50. Coming to the findings recorded in paragraphs 6.2.15 and 6.2.16 of the impugned order, we observe that the assessee had specifically requested the AO to afford an opportunity to cross-examine Shri P.Ramji, from whose residence the pen drive was recovered. The said request was material to the controversy, since the meaning, context, authorship and correctness of the disputed entries were matters which required verification from the person having custody of the electronic records. The AO, however, did not afford such opportunity, nor did he record any satisfactory reason for declining the assessee's request. Where the Revenue seeks to rely adversely upon a third person's records and the assessee disputes the transactions attributed to it, a fair opportunity to test the evidentiary foundation of those records assumes considerable significance. The AO could not simply accept the interpretation placed upon the entries by the Investigation Wing while denying the assessee an effective opportunity to challenge their authenticity and meaning. 51. The Hon'ble Supreme Court in Andaman Timber Industries v. CCE [2015] 62 taxmann.com 3 (SC) has held that denial of c....
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....ion had taken place. However, where the alleged transactions involve substantial cash loans extending over several financial years, and the entire case of the Revenue rests upon electronic entries recovered from another person's possession, the complete absence of corresponding evidence from the assessee's side assumes considerable evidentiary significance. The AO has not identified any independent confirmation from the Casagrand Group establishing that it borrowed the disputed cash amounts from the assessee or paid interest thereon. Nor has the AO demonstrated any actual delivery or receipt of cash by identifying the persons involved, the circumstances of the transactions or any corresponding records maintained by the alleged counterparty. The ld.CIT(A) was, therefore, justified in holding that the third-party entries remained uncorroborated and that the AO had failed to establish the transactions attributed to the assessee. 54. We have also examined the reliance placed by the AO upon the transactions appearing in the assessee's regular books of account, particularly the banking transactions relating to the proposed sale of the property situated at TTK Road, Alwarpe....
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....other entries have been interpreted as representing interest payments on cash loans. The AO has not satisfactorily reconciled the nature of the alleged cash-conversion transactions with the separate theory of interest-bearing loans. It has also been pointed out that the alleged interest entries cease after November without corresponding entries evidencing repayment of the purported principal amounts. Further, the electronic records contain references to other transactions and properties, including Sholinganallur 7.2 acres, which have not been shown to have any connection with the assessee. These discrepancies do not, by themselves, establish that every entry in the electronic records is incorrect. They do, however, demonstrate the necessity of independent verification before selecting particular entries, attributing them to the assessee and treating them as completed cash transactions. No coherent reconciliation of the opening balances, advances, repayments, interest payments and closing balances has been established by the AO with reference to reliable supporting evidence. 57. In the above factual background, we find that the AO has proceeded from the existence of certain notin....
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....endent evidence establishing the agreed rate of interest, the period for which interest was payable, the actual payment or accrual of interest in favour of the assessee, or the receipt thereof by any person acting on its behalf. No corresponding receipt, acknowledgement, cash record, bank deposit or other material evidencing such income has been identified. Once the alleged principal transactions themselves remain unproved, the consequential computation of interest based upon the same unverified entries cannot independently survive. The AO has not established that any income by way of interest actually accrued to or was received by the assessee during the relevant previous years. We, therefore, find no infirmity in the deletion of the additions towards alleged undisclosed interest income. 60. We shall now examine the reliance placed by the AO upon the statement of Shri T.V.Sathyanarayana recorded u/s. 132(4) of the Act, which has been considered by the ld.CIT(A) in paragraphs 6.2.20 to 6.2.23 of the impugned order. In the said statement, Shri T.V.Sathyanarayana stated that he had received and disbursed cash on behalf of the Appaswamy Group in accordance with the directions of it....
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.... it is open to the maker to establish that the admission was incorrect. The Hon'ble jurisdictional Madras High Court in CIT v. Smt. S. Jayalakshmi Ammal [2016] 74 taxmann.com 35 (Mad.) has also considered the sustainability of an addition based upon a statement recorded u/s. 132(4) of the Act which was not supported by material evidence. The decisions in CIT v. Lavanya Land Pvt. Ltd. [(2017) 397 ITR 246 (Bom.)], Kailashben Mangarlal Chokshi v. CIT [2008] 174 Taxman 466 (Guj.) and First Global Stockbroking Pvt. Ltd. v. ACIT [2008] 115 TTJ 173 (Mum.) further support the proposition that the evidentiary value of a retracted statement must be assessed in the light of the surrounding facts and supporting material. Applying these principles, we are of the view that the statement of Shri T.V.Sathyanarayana, which neither conclusively identifies the nature of the disputed transactions nor establishes their year-wise quantum, cannot, in the absence of independent corroboration, sustain the additions made by the AO. 63. We take note of another material circumstance, which has been specifically considered by the ld.CIT(A), is the categorical denial of the alleged cash-loan transactions....
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....igation and evidence sufficient to sustain an addition. It is not the proposition that electronic records recovered from a third party are wholly inadmissible or that such material can never be relied upon in income-tax proceedings. Such records may constitute relevant evidence, depending upon their authenticity, contents and connection with the assessee. However, where the assessee disputes the transactions and the records have neither been maintained nor acknowledged by it, the AO must establish their reliability and the underlying transactions through appropriate verification and corroboration. In the present case, the AO has not established the authorship and context of the disputed entries qua the assessee, obtained confirmation of the alleged loans from the counterparty, demonstrated any movement of cash, or discovered corresponding evidence during the search of the assessee. The necessary evidentiary link between the third-party records and the additions made in the assessee's hands is, therefore, absent. 66. We further observe that the ld.CIT(A) has not deleted the additions merely on account of the denial of cross-examination or on the technical ground that the pen ....
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....t years. However, the AO has not established, through independent evidence, the actual dates of advancement of the alleged cash loans, the amounts outstanding at the relevant points of time, the repayment of principal, or the accrual or receipt of the alleged interest. In the absence of a reliably established transaction-wise account, the year-wise allocation of the disputed amounts remains dependent upon the same unverified assumptions underlying the additions themselves. The deficiency is thus not confined to the quantum of the additions; it extends to the very existence and character of the transactions sought to be assessed. Accordingly, we find that the ld.CIT(A) was justified in deleting the additions for the respective assessment years. 69. Having considered the totality of the facts and circumstances, we are of the considered view that the ld.CIT(A), in paragraph 6.2.25 of the impugned order, has correctly concluded that the additions towards alleged undisclosed interest income and unexplained cash loans/receipts are founded upon unverified third-party electronic records and a subsequently retracted statement, neither of which is supported by independent evidence establi....
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....ersonnel. In cases involving allegations of on-money receipts in real estate transactions, some corresponding evidence of possession or application of such cash would ordinarily be expected. However, no such material has been brought on record by the AO to substantiate the allegation in the present case. 6.3.17 Further, the AO has not relied upon any parallel or duplicate books of account, cash ledgers, diaries, registers or electronic data evidencing systematic recording of alleged cash collections. No buyer-wise cash receipts, acknowledgements, side agreements or documents reflecting payment of consideration outside the registered sale deeds have been identified or produced. Importantly, the assessment does not cite even a single instance where a customer has admitted to having paid cash to the appellant, nor has any purchaser been examined or confronted to corroborate the allegation of unaccounted receipts. The material relied upon by the AO primarily consists of internal communications, loose working papers and statements recorded from employees. However, these materials, in the absence of corroboration, do not by themselves establish actual receipt of cash. The assess....
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....roceeding on this assumption, the AO has adopted an estimated "median rate" as the alleged actual selling price and has computed the addition by comparing such rate with the prices recorded by the appellant. In arriving at the said conclusion, the AO has disregarded the primary documentary evidence produced by the appellant, namely the registered sale deeds executed in favour of individual purchasers, the corresponding sale agreements entered into with customers, the contemporaneous entries in the appellant's ERP and accounting systems, and the bank statements evidencing receipt of consideration through banking channels. These documents collectively form a complete and consistent chain of evidence demonstrating the actual consideration received on sale of the flats. The undersigned notes that the assessment order does not record any finding that these documents are fabricated, unreliable or otherwise untrue. There is also no allegation that the consideration mentioned in the registered documents was understated with the consent or connivance of the purchasers. 6.3.20 A close reading of the assessment order further reveals that the "median rate" adopted by the AO does not e....
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.... amounts to assessing income on the basis of presumed or idealised pricing rather than on real income that has accrued or been received. At this juncture, it is appropriate to rely upon the decision rendered by the Hon'ble ITAT, Kolkata in the case of Fort Projects P Ltd vs Deputy Commissioner of Income-tax - [2013] 29 taxmann.com 84 (Kolkata - Trib.) wherein the Hon'ble ITAT, Kolkata has held as under. "the decision to sell a particular flat at a particular price was taken out of commercial expediency and it cannot be questioned by the Department without any tangible evidence. It is for the assessee to decide how to conduct the business. The AO cannot put himself in the armchair of the businessman and judge how business should be conducted or at what price a particular product should be sold". Thus, it can be held that it is well settled that the AO cannot sit in the armchair of the businessman and determine the price at which a product should be sold, unless there is clear and cogent evidence of suppression or understatement of consideration. 6.3.25 On a careful consideration of the entire material on record, the undersigned finds that the addition has ....
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....ation letter was filed during the course of the search proceedings itself. Neither the Investigation Officer nor the AO took any steps to controvert or rebut the clarification furnished by Shri Ravi Appasamy, and the said clarification letter has not been discussed or even adverted to in the assessment order. It can therefore be reasonably inferred that the clarification was not considered by either the Investigation Officer or the AO while framing the assessment. It is a well-settled principle that a statement recorded during search, when subsequently retracted, cannot by itself form the sole basis of an addition unless it is corroborated by independent and credible evidence. The Hon'ble Apex Court in the case of Kasmira Singh v. State of Madhya Pradesh AIR 1952 SC 159, has observed that the correct way to approach a case of confession is to marshal evidence against the accused excluding the confession altogether from consideration. Where the case can be decided independent of confession, then, it is not necessary to take help of confession. This principle assumes greater importance in search assessments, where additions must be rooted in material unearthed during the search and n....
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....ence to substantiate the inferences drawn from the electronic material. There is no linkage/ nexus revealed between the WhatsApp chats or loose electronic records and any specific sale transaction, customer payment, or flow of unaccounted funds. 6.3.39 In view of the above, the undersigned is of the view that the reliance placed by the AO on WhatsApp chats and loose electronic records, without proper authentication and without independent corroboration, is not justified. Such material, in isolation, does not constitute incriminating evidence of receipt of unaccounted cash. Therefore, the addition made relying upon such material is unsustainable. 6.3.40.... 6.3.41.... 6.3.42 As evident in the assessment order, the AO has proceeded to quantify the alleged undisclosed cash receipts from the sale of residential flats by adopting a uniform and project-wise estimation methodology, rather than by identifying actual instances of cash receipt supported by concrete evidence. The AO first formed a broad premise, primarily on the basis of sworn statements recorded from certain employees of the appellant group particularly the sales person(s), that discounts ....
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....is exercise was carried out project-wise, and in respect of projects such as Capella, The Bloomingdale Phase 2, Trellis North and Trellis South, the median rate was uniformly substituted in place of the recorded rate to compute the alleged cash component. Using this methodology, the AO aggregated the differences across all flats and across multiple assessment years, arriving at a total alleged undisclosed cash receipt of Rs. 102.04 Crores for the appellant group as a whole for AYs 2016-17 to 2024-25. Out of this, a sum of Rs. 17,53,84,476/- was attributed to the appellant for the AY(s) 2019-20 to 2024-25, and Rs. 82,92,000/- Rs. 3,49,31,150/- & Rs. 37,60,100/- was allocated to the AY(s) 2019-20, 2020-21 & 2021-22. It is also evident from the assessment order(s) passed that the median rate itself was not static and was revised upward at different stages even within the same project, without recording any specific basis or rationale for such revision. These revised median rates were nevertheless used as the benchmark to re-compute the alleged cash component, thereby inflating the quantified amount. 6.3.44 The undersigned finds that the AO has computed the alleged unaccounted....
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....he recorded sale consideration and substituted it with assumed or hypothetical prices, which is legally impermissible as the AO cannot approbate and reprobate without valid reasons. On an objective examination of the record, it is found that the AO has indeed not pointed out any specific defects, yet proceeded to estimate income by adopting notional selling prices without any cogent legal or factual basis, rendering the addition made on a purely estimated basis legally untenable. 6.3.46 On a cumulative and holistic consideration of the facts, material on record and the submissions made during the appellate proceedings, it is evident that the addition of Rs. 82,92,000/- Rs. 3,49,31,150/- & Rs. 37,60,100/- for the AY(s) 2019-20, 2020-21 & 2021-22 was made by the AO as undisclosed income from sale of residential flats is based on assumptions and estimates, without support from any incriminating or corroborative evidence. No unaccounted cash, undisclosed investment, parallel books, or customer confirmations were found or brought on record to substantiate the allegation. The addition is founded on sworn statements of employees which were subsequently retracted, or was any indep....
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....alleged theory of allowing a discount of 5%, the ERP/BSF data, WhatsApp conversations, loose sheets and buyer abstract analysis. The AO had further proceeded on the premise that the sale prices were subsequently reduced in the ERP system and had adopted a median selling rate in substitution of the actual sale consideration recorded in the books of account for the purpose of estimating the alleged unaccounted cash receipts. It was submitted that these very materials and the methodology adopted by the AO formed the basis of the additions in the case of M/s. Ivar Estates Private Limited, which had already been considered by the Coordinate Bench. 75. The ld.AR further submitted that the AO had not independently quantified the alleged undisclosed cash receipts in the hands of each group entity on the basis of separate and distinct incriminating material. On the contrary, the AO had undertaken a common exercise of quantification for the Appaswamy Group as a whole by adopting the median-rate methodology and had thereafter attributed the amounts so determined to the respective group entities and assessment years. In this regard, the ld.AR invited attention to the findings recorded by th....
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....und certain loose sheets, electronic records, WhatsApp conversations and ERP/BSF data and recorded statements from various employees and officials of the group. On the basis of the said materials, the AO concluded that the group had collected unaccounted cash from customers over and above the sale consideration recorded in the regular books of account. For the purpose of quantifying the alleged undisclosed cash receipts, the AO adopted a median selling rate in respect of the various projects undertaken by the group and compared the same with the actual sale consideration recorded in the ERP system, after allowing a standard discount of 5%. The differential amount was treated as unaccounted cash received from customers. By adopting the aforesaid methodology, the AO quantified the alleged undisclosed cash receipts of the Appaswamy Group as a whole at Rs. 102.04 crores for the assessment years 2016-17 to 2024-25 and thereafter attributed the respective amounts to the respective individual group entities on the basis of the projects undertaken by them and the relevant assessment years. 80. We further find that the AO had attributed an aggregate amount of Rs. 17,53,84,476/- to the pr....
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....ncing actual collection of cash from customers were brought on record by the AO. Further, no purchaser was examined to establish that any consideration over and above the amount recorded in the registered sale deeds had been paid to the assessee. The ld.CIT(A) has also taken note of the fact that the statements of the employees relied upon by the AO were subsequently retracted and that no further examination or independent verification was undertaken to substantiate the allegations contained therein. The ld.CIT(A) has further found that the AO had neither rejected the books of account maintained by the assessee nor pointed out any specific defect in the recorded sale consideration supported by the registered sale deeds, customer agreements, ERP records and banking transactions. 83. We also find that the ld.CIT(A) has specifically examined the methodology adopted by the AO for quantifying the alleged undisclosed income. The ld.CIT(A) has observed that the median selling rate adopted by the AO was an inferential figure and was not established to be the actual consideration received in any concluded sale transaction. The AO had proceeded to substitute the recorded sale consideratio....