ACIT Vs Bannari Amman Sugars Ltd. (ITAT Chennai)
Dumb Documents Collapse ₹9.06 Cr Theory- Suspicion Isn’t Evidence-: ITAT Chennai Deletes 7.5% Cash Rebate Addition
Revenue appealed deletion of additions made by AO u/s 69B alleging unaccounted cash payments by Assessee to Chettinad Builders in lieu of 7.5% rebate on construction contracts. AO relied on diaries & loose sheets seized from Chettinad Group containing notings of cash said to relate to “Bannari Amman/BASL”, statements of some employees & an email referencing 7.5% rebate.
Tribunal noted that (i) seized notings were vague, unsigned, ambiguous & similar findings in group-case BAET had already termed them “dumb documents”; (ii) all Chettinad employees, including CFO Smt. Valliammai (cross-examined), categorically denied any cash receipt from Assessee & confirmed that 7.5% rebate was a pre-negotiated commercial discount, not a cash-back; (iii) invoices in seized box-files (page numbers referenced by CIT(A)) showed 15% rebate only in BAET bills, whereas invoices to Assessee showed no rebate, negating AO’s theory; (iv) AO had contradicted himself by adding the same notings in hands of BAET also, revealing pure surmise. Tribunal held AO’s inference was mere ipse dixit, unsupported by corroboration, relying on Bombay HC in C.J. Shah & Co. that estimation cannot be arbitrary. CIT(A)’s deletion of additions was upheld. On depreciation, Tribunal followed its earlier ruling in Assessee’s own case & Visakhapatnam Bench in Sri Sarvaraya Sugars Ltd, holding components of cogeneration unit integral & eligible for 40% depreciation.
