ACIT Vs Ramesh Babu Segu (ITAT Hyderabad)
Addition u/s 69C Based on Seized Pen Drive Deleted – Digital Evidence Without Valid 65B Certificate Inadmissible – Third-Party Documents Cannot Sustain Addition – ITAT Hyderabad
Search in Polisetty Somasundaram Group led to issuance of notice u/s 153C to the assessee alleging cash payments of ₹1.10 crore based solely on data extracted from a seized pen drive and certain receipt copies. The AO treated the alleged payment as unexplained expenditure u/s 69C. However, CIT(A) deleted the addition observing that the receipts did not relate to the relevant year and the digital evidence lacked legal validity.
ITAT upheld CIT(A)’s order noting that the very same pen drive had earlier been held inadmissible by the Visakhapatnam Bench due to absence of mandatory certificate u/s 65B of the Indian Evidence Act. As reflected from the discussion and reproduced extracts , electronic records without proper certification cannot be relied upon as primary evidence. Further, the alleged receipts were neither seized from the assessee nor linked to the assessment year, and no independent corroborative evidence was brought on record. Accordingly, the Tribunal dismissed Revenue’s appeal and confirmed deletion of ₹1.10 crore addition; the assessee’s cross-objection became infructuous.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
