Addition based on mere print out from third party computer not sustainable

Addition made on the basis of a print out taken from the computer of a third party without there being no other corroborative evidence brought on record to prove the fact that the payment mentioned in the seized material was actually received by the assessee, not sustainable.

Recently, in ACIT vs. Katrina Rosemary Turcotte [ITA Nos. 3092/Mum./2015 to 3097/Mum./2015, decided on 11.10.2017], appeals by the Revenue were directed against separate orders passed by the CIT(Appeals), for the assessment years 2006–07, 2007–08, 2008–09, 2009–10, 2010–11 and 2011–12. In ITA no. 3092/Mum./2015, the Revenue had raised seven grounds. Ground no. 1, was against deletion of addition of Rs. 2,00,000 on account of undisclosed income arising out of appearance fee in ICC Awards function.

Briefly, a search and seizure operation was conducted in assessee’s case on 24.01.2011, under section 132 of the Income-tax Act, 1961 (for short “the Act”). In pursuance to the search and seizure operation, assessment proceedings were initiated by issuance of notice under section 153A of the Act. In response to the notice issued under section 153A of the Act, the assessee filed her return of income on 31.01.2012, declaring total income of Rs. 95,82,109. During the assessment proceedings, the Assessing Officer(AO) found that during the survey / search operation conducted at the premises of assessee’s manager Ms. Sandhya Ramchandra, and assessee’s agent Matrix India Entertainment Pvt. Ltd. (in short “Matrix”) print outs were taken from the computer back–up impounded and seized which were marked as “Annexure–A, B, C, D & E” and were provided to the assessee to reconcile with her books of account. The AO found that as per Annexure–B, there was a letter confirming appearance of the assessee as host of ICC Award in Sidney on 11.10.2005 and the fee collected to be paid to the assessee in cash was Rs.2,50,000 plus service tax. Alleging that the assessee had not submitted any comment in this regard, the AO treated 80% of the said amount worked out to Rs. 2,00,000 as income of the assessee. The assessee challenged the addition before the first appellate authority.

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