Additions Based on WhatsApp Chats Third-Party Statements Deleted – No Evidence, No Cross-Examination

Vikas Vilas Rasal Vs ACIT (ITAT Mumbai)

Additions Based on WhatsApp Chats Third-Party Statements Deleted – No Evidence, No Cross-Examination

Mumbai ITAT delivered a comprehensive ruling deleting multiple additions made during search assessment, emphasizing that unverified digital evidence and third-party statements cannot sustain additions without corroboration.

The Tribunal held:

• WhatsApp chats have no evidentiary value without proper Section 65B certification and cannot be sole basis for addition
• Addition of ₹15 lakh (alleged cash with Vilas Pawar) was deleted as:
  • No linkage established with assessee
  • Messages did not indicate assessee’s ownership of funds
  • No independent inquiry conducted
• Major addition relating to Parekh Ornaments (₹1.20 crore sustained by CIT(A)) was fully deleted because:
  • Based on retracted statements u/s 132(4) & third-party statements
  • No cross-examination provided despite request
  • No supporting seized material furnished to assessee
  • Assessee provided plausible explanation with documentary backing
• Professional income of spouse (₹16.67 lakh):
  • Cannot be taxed again in assessee’s hands
  • Double taxation not permissible, especially when already declared and accepted in spouse’s return
• Agricultural income issues:
  • Assessee proved agricultural activities with land records, bills, and evidence
  • Only 10% estimation sustained, rest deleted
  • Additions in respect of family members’ agricultural income fully deleted as baseless

The ITAT emphasized:

• Statements without corroboration = weak evidence
• Cross-examination is crucial where reliance is placed on third-party statements
• Additions cannot be made on presumption, suspicion, or incomplete evidence

Accordingly:

• Assessee’s appeal allowed in full
• Revenue’s appeal dismissed

The ruling strongly reinforces that search-based additions must be backed by credible, tested evidence-not mere digital traces or unverified statements.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

The present appeal has been filed by the assessee and the cross appeal is filed by the Revenue challenging the impugned order dated 31.10.2025 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the Office of the Commissioner of Income Tax, Appeal, CIT(A) 53, Mumbai for the assessment years 2016-17.

The following grounds raised by the assessee are reproduced below:

“1. On facts and circumstances of the case as well as in law ld. CIT(A) has erred in confirming the addition of 10% of the declared agricultural income, amounting to Rs. 77,598/- by estimating alleged inflation in agricultural income, without any cogent material 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 recorded u/s 132(4) of the Income Tax Act, 1961 was retracted.

The Assessee craves leave to add, amend or alter the above ground of appeal.”

The following grounds raised by the Revenue are reproduced below:

1. On the facts and circumstance of the case and in law, Ld. CIT(A) erred in treating the professional income of Rs. 16,67,500/- being the income of Smt. Jaishree Rasal (assessee’s spouse) instead of treating it the income of the assessee, while ignoring the fact that during search and post search inquiry and investigation it has been established that alleged income is unaccounted income of the assessee.

2. On the facts and circumstance of the case and in law, Ld. CIT(A) erred in restricting the addition of the agricultural income to Rs. 77,598/ instead of considering Rs. 7,75,980/ -as adopted by AO, ignoring the facts that during search and post search inquiry the assessee failed to prove that he had undertaken any agricultural activity during the year.

3. On the facts and circumstance of the case and in law, Ld. CIT(A) erred in deleting the addition of agricultural income of Shri V. Rasal of Rs. 9,88,401/ – and Shri Suresh V. Rasal of Rs. 6,87,997/ as income from unexplained sources, ignoring the fact that during search and post search inquiry and investigation it has been established tht alleged income is unaccounted income of the Assessee.

4. On the facts and circumstance of the case and in law, Ld. CIT(A) erred in restricting the addition of unaccounted cash with Parekh Ornaments LLP to Rs. 90,80,508/ – instead of considering Rs. 3,75,80,508/ as adopted by AO, ignoring the fact that during search and post search inquiry and investigation it has been established that alleged income is unaccounted income of the assessee.”

2. Since all the issues involved in these appeals are common and identical, therefore, they have been clubbed, heard together and consolidated order is being passed for the sake of convenience and brevity.

Ground no. 1

3. Ld. AR submitted at bar the he does not want to press this ground. Consequently, considering the statement made by the ld. AR, ground no. 1 raised by the Assessee stand dismissed as not pressed.

Ground no. 2

4. This ground raised by the Assessee relates to challenging the order of Id. CIT (Appeal) in confirming the addition of Rs. 50 lakhs made by the AO on 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. Reliance is placed on the following decisions:

a. Saravana Selvarathnam Retails (P.) Ltd. CIT (160 com 287) (Madras);

b. ACIT Vs. Prashant Prakash Nilawar (2024) ITA 5689/Mu m/2024) (Mumbai)

c. A Johnkumar Vs. DCIT (ITA 3092/Chny/2019) (Chennai)

7. It was further submitted that the Assessee known the Vilas Pawar from last 6 to 7 years. He has good knowledge of financial matters such as rate of gold-silver, dollar, other currencies, Assessee used to take his advice from time to time. He used to arrange loans for various persons from various sources for small commission for the services rendered. Assessee used to recommend his name to his friends. However, Assessee never had any transactions with him. Even there is no evidence was found during the course of search that the Assessee had any transaction with Vilas Pawar. The Assessing Officer only on the basis of the whatsapp communication alleged that the Assessee has kept his unaccounted income in the form of cash with Shri Vilas Pawar, but nowhere in the communication it was mentioned that the said amount collected by the parties are belongs to the Assessee, in the whatsapp communication it was mentioned by the Vilas Pawar that the amount collected from Pravin Wadkar of Rs. 10,00,000/- and Jadhav of Rs.5,00,000/-. Thus, this transaction was between Vilas Pawar 86 Pravin Wadkar and Vilas Pawar 86 Jadhay. It is nothing to do with the Assessee.. Assessee is no where involved in these transaction with Pravin Wadkar 86 Jadhay. Even the department failed to produce any evidence which prove that the Assessee had transaction with Pravin Wadkar 86 Jadhay. Thus, without doing further enquiry on the said transaction, the Assessing Officer simply alleged that the Assessee kept his unaccounted income in the form of cash with Shri Vilas Pawar, which is not tenable under the Act.

8. Ld. CIT(A) discussed this issue on page 36 para 8.6.3 and confirmed the addition on the plea that in the statement assessee has admitted the said amount. He has not appreciated the fact that there was no 65B certificate for seizure of digital evidence not any third party enquiry carried out by the AO.

9. 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.

Ground Nos. 3 to 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 86 Rs.30,00,000/- for A.Y. 2017-18) with M/s. Parekh Ornaments. Assessee asked for the copy of said seized documents which is discussed by the AO on page 2 para 5, however no such document provided by the AO to the Assessee, which was specifically asked by the assessee as mentioned on page 2 of the assessment order.

12. In this regard, we submit that the statement of Assessee on which the Assessing Officer is relying for making addition, was retracted later on as discussed above. We further submit that the Assessee never said that he kept any cash with Mukesh Parekh of Parekh Ornaments LLP as alleged by the Assessing Officer. In statement dated 08.07.2017, Assessee said that he knows Mahesh Parekh and not Mukesh Parekh. However, the Assessing Officer recorded the statement of Mukesh Parekh 86 not Mahesh Parekh and made the addition on the basis of statement of Mukesh Parekh, which is not tenable. During the course of assessment proceedings, the Assessee also asked the copy of statement of Mukesh Parekh recorded u/s.131 of the Act and opportunity of cross examination, but both were not provided to the Assessee. Any addition based on third party statement and without providing the opportunity of cross examination is not sustainable under the Act, as held by Apex Court in case of Andaman Timber Industries Ltd Vs CIT Cen Exercise, Kolkota II (Appeal No 4228 OF 2006).

13. The Assessee submit that the paper found during the course of search proceedings was rough paper, on which certain calculation was made on some points which has no relevance with anything. We submit that, during the course of assessment proceedings, the Assessee explained that he used to purchase Gold or Silver Ornaments from Parekh Jewellers and for that purposes many times he asked the quotation. The paper found during the course of search proceedings i.e Computer print sheet, are related to jewellery transaction, it might be quotation sent by the Parekh Ornaments which the Assessee doesn’t remember. The transactions entered by the Assessee with Parekh Ornament were only on account of Jewellery transactions. In support of his contention Assessee also produced the few couples of bills before the Ld. Assessing Officer. But the Assessing Officer has not made any comment or provided any adverse finding on the explanation given by the Assessee during the course of assessment proceedings.

14. We further submit that the amount mentioned in hand written i.e. Rs. 2.85 crore represents amount to be arranged 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. It is pertinent to note that there has been no retraction or change in submission filed by Shri Mukesh Parekh of M/s. Parekh Ornaments LLP and Shri Vilas Pawar to alter the confession made in the statements made on oath u/s.133A & 132(4) of the Act respectively. In view of the above it is established that Shri Vikas Rasal has kept his unaccounted money of Rs.3,75,80,508/ -relevant to A.Y. 2016­17 with Parekh Ornaments. Thus an amount of Rs.3,75,80,50/- is treated as unaccounted income of Shri Vikas Rasal, and the same is added to the income of Shri Vikas Rasal as unexplained income.’

16. As regard the allegation of the Assessing Officer that there has been no retraction or change in submission filed by Shri Mukesh Parekh of M/s. Parekh Ornaments LLP to alter the confession made in the statements made on oath u/s. 133A of the Act, we submit that the Assessee was neither confronted with the statement nor given the opportunity of cross examination in spite of specific asked by the Assessee. Even the copy of statement of Mukesh Parekh was not provided to the Assessee. Any statement recorded at the back of the Assessee, cannot be used in the proceedings as held by the Apex Court in case of Kishinchand Chellaram (125 ITR 713) (SC). Further any statement recorded U/s 133A do not have any evidentiary value as held by the Apex Court in case of 5. Kader Khan Sons (25 taxmann.com 413) (SC), Thus, the sald statement has no evidentiary value and it should be Ignored. The Assessee further submit that addition cannot be made only on the basts of ther statement, it should be supported with some evidence, but the Assessing Officer failed to provide the supportive evidence which proved that the Assessee has kept his cash with Parekh Ornaments. In the contrary, the Assessee with supportive evidence explained the seized documents, but the Assessing Officer simply rejected the same and without providing any cogent reason or brought out any evidence in contrary simply made the addition which is not tenable under the Act. The Assessee submit that the initial onus is on the Assessee to prove with the evidence/documents, once the same was discharged by the Assessee than the onus shifts on the Assessing Officer why evidence/explanation of the assessee is not acceptable with corroborative evidence. But the Assessing Officer failed to make further enquiry in order to support 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 addition of Rs.16,67,500/- by treating the professional income of Smt. Jayshree Rasal (Assessee’s spouse) as alleged undisclosed income of the Assessee. The said addition was made by the L.d. Assessing Officer only on the basis of the statement of Smt. Jayshree Rasal recoded u/s.132(4) of the Income Tax Act, 1961 on 07.07.2017 wherein she had conceded that the professional income shown in her return was not earned by her. The said statement was immediately retracted by her. There is no other basis or evidence on which the Assessing Officer relied for making the addition.

21. In this regard, Assessee submit that during the year under consideration his wife Smt. Jayshree Rasal is an advocate by profession and received professional income of Rs. 16,67,500/-from Adv. Narichandani. The said income was offered to tax in her return of income for the A.Y. 2016­17, in support of his contention the Assessee submitted the sample copies of professional hills, copies of sample receipts, TDS Certificates and acknowledgement of return of income along with computation of total income etc. But the Assessing Officer without giving any adverse finding on documents or evidence submitted by the assessee, made an addition in the hands of the Assessee only on the basis of the statement recorded u/s 132(4) during the course of search proceedings, wherein she had conceded that the professional Income shown in her return was not earned by her. White making an addition the Assessing Officer failed to appreciate the fact that the said statement on which he is relying was already retracted by the Smt. Jayshree Rasal the confirmation was given during the search proceedings was only under duress. The submission of the Assessee was not accepted by the Ld. Assessing officer only on the plea that the wife of the Assessee is law graduate. She is fully aware of the consequence and importance of giving a statement on oath. He further stated that her statement was recorded on oath u/s.132(4) of the Income Tax Act, 1961 and she had categorically claimed that she had not discharged any service to the alleged employers to earn the salary income.

22. In this regard the Assessee submit that the Ld. Assessing Officer made the addition on the basis of the third party statement Le Assessee spouse, which was also later on retracted by the Assessee wife. Initial onus is on the Assessee to prove with 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 facts and circumstances as discussed by us as above we dismissed the present ground raised by the Revenue and uphold the order of CIT (Appeal).

Ground no. 2

25. This ground raised by the revenue related to challenging the order of CIT (Appeal) in restricting the additions of agricultural income.

26. 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 year under consideration the Assessee has offered an agricultural income of Rs. 7,75,980/- in his return of income after reducing the expenses of Rs.5,17,320/- from the gross receipt of Rs. 12,93,300/-. Assessing Officer treated the same as alleged undisclosed income of the Assessee on the plea that the Assessee himself in the statement recorded under oath u/s 132(4) during the course of the search action, admitted that the agricultural income declared by in the return is on an estimate basis and there is no record of the agricultural income earned by him.

27. In this regard, Assessee submits that the statement given u/s. 132(4) of the Income Tax Act, 1961 was under duress. The statement was already retracted by the Assessee and copy submitted to investigation wing on 22.07.2017. During the course of assessment proceedings, the Assessing Officer has issued the show cause notice asking why the agricultural income should not be treated as undisclosed income of the Assessee. In response to the said notice the Assessee replied with evidence that he is agriculturalist and having a farm at Talegaon, where he cultivated Cut-Chrysanthemum (Shevanti) in Poly House PH-11 86 B-11 from 2007 to 2015 86 2015 onwards he started cultivating Roses (Gulab) with modern 86 scientific agricultural techniques using high yield varieties. In reply all the procedure adopted for cultivation of flowers were explained by the Assessee. Assessee also filed documents of loan taken from bank for developing the said farm and confirmation of the Society formed by the farmers in that area confirming the activities carried out therein. Further, Assessee had also asked the Assessing Officer to visit the places where he cultivates the flower in order to verify whether Assessee is earning agricultural Income or not.

28. However, AO did not consider the same and made the addition merely 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 10% of the income offered followed earlier year order.

30. Therefore, considering the totality of the facts and circumstances as discussed by us as above we dismissed the present ground raised by the Revenue and uphold the order of CIT (Appeal).

Ground no. 3 and 4

31. These grounds raised by the revenue relates to challenging the order of CIT (Appeal) in deleting the addition of agricultural income of Shri. Prakash V Rasal and Shri Suresh V Rasal, therefore, we have decided to adjudicate these grounds through the present consolidated order.

32. 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 Assessing Officer has made the addition of Rs.6,87,997/-and Rs. 9,88,401/(total Rs.22,38,029/-) being Agricultural Income earned by the assessee’s brothers at native place by making an allegation that this is the assessee’s unaccounted Income. The said addition was made only on the basis that the assessee is filing their income tax return of income and assessee father and brothers stated in his statement they have no idea of the return filed on their behalf. The Ld. Assessing Officer further alleged that father and brothers of the assessee have not been able to furnish any documentary evidence in the support of their agricultural activities.

33. The assessee submits that his brothers Shri Suresh Rasal and Shri Prakash Rasal have shown the agricultural income of Rs.7,23,522/-and Rs. 16,59,534/ in return of income respectively. The Assessing Officer alleged that the total agricultural income of his brothers Shri Suresh Rasal and Shri Prakash Rasal is only Rs. 35,525/-and Rs.6,71,133/- respectively. Therefore, the difference of Rs. 6,87,997/- (7,23,522 and 35,525) and Rs.9,88,401/-(16,59,534 and 6,71,133) is the unaccounted income of the assessee. In this regard, assessee submitted that on what basis the Assessing Officer has computed the agricultural income of the family members. In assessment order no basis of computation of income was provided to the assessee. Further, in reply to the show cause notice the assessee specifically asked the Assessing Officer provide the details of agricultural income proposed to be added as his unaccounted income as shown in show cause notice since it is different 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 Assessing officer only on the basis that the assessee is filing their return of income form a presumption that the income shown in their return is undisclosed income of the assessee. Under the Income Tax law merely filing return on behalf of other person does not mean that the said income belongs to the income of the person who filed return of income. Further, the allegation of the Assessing Officer that the family members were not aware that the return of income was filed by the assessee is also without any basis since in the statement recorded u/s.132(4) of the Vilas Rasal, admitted vide answer of the q no 10 that the income tax return was filed by his elder son Shri Vikas Rasal with the help of CA in Mumbai. Further all the return was being signed by the family members before sending the same to CPC Bengaluru. All the returns are being filed at Sangli Income Tax office only and for A.Y. 2012-13 assessee’s brother, Prakash Rasal, case was selected for the income tax scrutiny which was attended by assessee’s brother along with Chartered Accountant in Sangli. Thus, in such scenario it is incorrect to say that the family members have no idea about filing of their returns.

35. The Assessing Officer further alleged that the brothers of the assessee have not been able to furnish any documentary evidence in the support of their agricultural activities. In this regard the assessee submit that the said allegation is again without any basis, during the course of recording the statement of Shri Prakash Rasal, brother of assessee, when department specifically asked vide Q no 16 to provide the details in respect of purchase/sales and expenses related to agriculture activity conducted by him, in answer to that assessee brother stated that he is not maintaining the details of sales/purchases of agricultural activities, however he provided few sample bills related to sales of sugarcane made to Hutatma Sahakari Sakhar Karkhana and Rajaram Bapu Sahakari Sakhar Karkhana, turmeric sold in Sangli market, expenses of agriculture activity such as bills of irrigation, seeds purchases, fertilizers etc. Thus, it is proved that the allegation of the Assessing Officer that brothers of the assessee have not been able to furnish any documentary evidence in the support of their agricultural activities is incorrect. Thus, from the view of above facts it is clear that all the allegation 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 crops cultivated by them etc., in order to prove that the said agricultural income belongs to assessee family members and not assessee.

38. Thus, from the above it is clear that the assessee with documents proved that the agricultural Income of the family members Belongs to them and it is nothing to concern with assessee’s income. In other words, the said income is not the unaccounted income of the assessee, in the contrary the Assessing Officer failed to bring out any evidence which prove that the agricultural income of the family members was the unaccounted income of the assessee. The assessee submits that the initial onus is on the assessee to prove with the documents that the said transaction does not belong to him. If it is proved with documents, then the onus shifts on the Assessing Officer to prove why the explanation of the assessee is not to be accepted. But the Assessing Officer without providing any evidence in contrary simply mentioned that the agricultural income of the family members represents assessee’s unaccounted Income, which is not acceptable/sustained under the Act. Thus, the additions had proceeded on presumptions and surmises without bringing on record any evidence, which would show that the agricultural income of the family members is in fact the income of the assessee, it was an accepted proposition of law that addition on estimate/presumption basis could not be made in a block assessment.

39. Ld. CIT(A) has discussed this issue on page 29 para 8.4.2 and following the decision of earlier years deleted the addition as the same was made without any basis and record.

40. 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.

41. Therefore, considering the totality of the facts and circumstances as discussed by us as above we dismissed the present ground raised by the Revenue and uphold the order of CIT (Appeal).

42. Consequently, the appeal filed by the Assessee stands allowed and appeal filed by the Department stand dismissed with no order as to cost.

Order pronounced in the open court on 21.04.2026