Lalman Yadav Vs ACIT (ITAT Delhi)
ITAT Delhi held that presumption u/s. 132(4A) of the Income Tax Act is only against the person in whose possession the search material is found and not against any other person. Addition based on dumb documents without corroborative evidence is unsustainable in law.
Facts- A search & Seizure operation u/s 132 of the Income Tax Act, 1961 was conducted in different business and residential premises of Rathi Group of cases based at Delhi and National Capital Region (NCR). The case of the assessee was also found to be covered in the search. Various incriminating papers/documents were allegedly found and seized from the premises of the assessee. Accordingly, notice u/s 153A of the Income Tax Act, 1961 was issued and served upon the assessee.
Thereafter based upon the submissions of the assessee the Ld. AO relied certain seized materials and made addition of Rs. 2,27,43,825/- and an addition of Rs. 1,56,83,000/- on the basis of seized material. CIT(A) had set aside addition of Rs. 1,56,83,000/-while the addition of Rs. 2,27,43,825/- was reduced to 55,60,825/-. Being aggrieved, assessee has preferred the present appeal.
Conclusion- In the case of Rama traders vs. First ITO it was held that no addition could be made, on the basis of presumption raised by section 132(4A), in the hands of the assessee where in the books of another firm, certain figures were found showing the purchase made by the assessee.
Held that presumption under section 132(4A) is only against the person in whose possession the search material is found and not against any other person. Further that the presumption is rebuttable and not conclusive and it cannot be applied in the absence of corroborative evidence.
Held that Ad-Hoc/ Dumb Documents without any corroborative evidence/finding that the alleged documents have materialized into transactions cannot be deemed to be the income of the assessee.
FULL TEXT OF THE ORDER OF ITAT DELHI
The two appeals have been filed by the assessee & revenue against order dated 24 August, 2018 in appeal no. 10662/16-17 in assessment year 2011-12 passed by Commissioner of Income Tax (Appeals)-XXVI, New Delhi (hereinafter referred to as the First Appellate Authority in short ‘Ld. F.A.A.’) in regard to the appeal before it arising out of assessment order dated 31.12.2016 u/s 153(A)/ 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’) passed by Assessing Officer ACIT, Central Circle-16, New Delhi (hereinafter referred to as the Assessing Officer ‘AO’).
2. Since the issue involved is common and the appeals were heard together so these are being disposed of by this consolidated order for the sake of convenience and brevity.
3. The facts in brief are pursuant to the warrant of authorization issued by the Director of Income Tax (Inv.)-II, New Delhi a search & Seizure operation u/s 132 of the Income Tax Act, 1961 was conducted on 20.01.2015 and on subsequent dates in different business and residential premises of Rathi Group of cases based at Delhi and National Capital Region (NCR). The case of the assessee was also found to be covered in the search. Various incriminating papers/documents were allegedly found and seized from the premises of the assessee. Accordingly, notice u/s 153A of the Income Tax Act, 1961 was issued on 21.03.2016 and served upon the assessee. In response to the notice u/s 153A of the Act, the assessee filed his return of income for A.Y. 2011-12 on 05.10.2016 declaring total income of Rs. 36,19.184/-. During the relevant previous years the assessee claimed to have earned Income from house property & Income from business or profession. Statutory notices u/s 143(2) of the I.T. Act, 1961 and a questionnaire along with notice u/s 142(1) of the Act, dated 17.10.2016 were issued and served on the assessee fixing the date for compliance on 01.11.2016.
4. Thereafter based upon the submissions of the assessee the Ld. AO relied certain seized materials and made addition of Rs. 2,27,43,825/- on the basis of seized material Party H-6 inventory A-32/page 48 and an addition of Rs. 1,56,83,000/- on the basis of seized material Party H-6 inventory A-32/page 46. The Ld. CIT(A) had set aside addition of Rs. 1,56,83,000/-while the addition of Rs. 2,27,43,825/- was reduced to 55,60,825/- .
5. Now, the assessee is in appeal raising following grounds :-
“1. That the Ld. CIT(A) has erred in confirming the additions of Rs.55,60,825/- on the basis of documents found from the premises of the third party which was not corroborated or substantiated inspite of the fact that the department has used its longest arms against the assessee by conducting search at the premises of the assessee and could not found any iota or evidence corroborating the same thus, the same is liable to be deleted.
