V.V. Titanium Pigments Pvt Ltd Vs ACIT (ITAT Chennai)
Conclusion: Addition under section 68 on account of unaccounted cash receipts was not justified as AO was merely hearsay evidence carrying no evidentiary value and at the time of seizure, the excel sheets were not authenticated either by assessee company nor by the witnesses or by an authorized officer.
Held: AO made addition for AYs 2017-18 to 2019-20 for Rs.6.10 Crores which was based on seized notebooks and dairies as maintained by Manager of M/s V.V. Minerals. Assessee assailed the same on the ground the entries in the excel sheet did not pertain to assessee and no such sales receipts were received by assessee. It was also pointed out that Manager was not the employee of assessee company and the presumption u/s 132(4A) would not arise. Assessee also submitted that the sheet was an unsigned sheet and it would thus, had no evidentiary value. AO did not make any enquiries to corroborate the notings in the excel sheet. During the course of search, six notebooks maintained by Shri Raja were seized from the residential premises of director of assessee company. It was held that addition based on certain excel sheet as exchanged in e-mail between Partner of M/s V.V. Minerals and an employee of M/s V.V. Minerals was not justified as these sheets were unsigned sheets and unless corroborated by independent evidences, would bear no evidentiary value. AO had not made any enquiries to corroborate the notings in the excel sheet. CIT(A) had correctly noted that AO did not examine / confront the excel sheets to any of the parties. In the absence of valid details and the circumstances in which the excel sheet was prepared and the corresponding entries, the same could not be relied upon to make impugned additions in the hands of assessee. The sheet had no narration relating to the quantity of scrap sold and the details of buyer to whom it was sold. There was no corroborative evidences to prove that the noting in the excel sheet were actual cash receipts of the assessee company. In such circumstances, this sheet could not be relied upon. There was no corroboration from any of the party and the evidence being relied upon by AO was merely hearsay evidence carrying no evidentiary value. At the time of seizure, the excel sheets were not authenticated either by assessee company nor by the witnesses or by an authorized officer. This was an unsigned document and as such loses its evidentiary value for want of authentication. The evidences relied upon by AO in the form of excel sheets did not constitute adequate evidence to draw adverse inference against tassessee, in the absence of any other corroborative evidences. Assessee could not be put to any liability on the action of a third-person where the material was not found from the premises of assessee nor was it in the handwriting of the assessee since the third person might write the name of any person at his sweet will and the revenue did not make any effort to gather corroborative evidences in this relation.
