ACIT Vs Rohan Corporation India Pvt. Ltd. (ITAT Bangalore)
Dumb Documents Can’t Tax Real Estate Deals – Loose Sheets Are Dumb Documents – ITAT Bangalore Deletes ₹2.52 Cr Additions
Assessee company, a Mangalore-based real estate developer, faced additions of ₹2.52 crore for AY 2014-15 on the allegation that it made cash payments to Global Star Realtors Pvt. Ltd. AO relied on loose excel sheets impounded during a survey at SCDCC Bank in 2016, which purportedly reflected unrecorded payments. Similar additions were also made for AY 2015-16.
CIT(A), Panaji deleted the additions, observing that AO acted only on third-party loose sheets without any corroborative evidence. No enquiry was conducted to establish ownership or linkage of such papers with the Assessee. There was no proof of any inflow/outflow of cash. Reliance was placed on the Supreme Court rulings in Common Cause v. Union of India (394 ITR 220) & Pr. CIT v. Krutika Land (P) Ltd. (103 taxmann.com 9), where it was categorically held that loose papers have no evidentiary value. Jurisdictional ITAT & CIT(A) had already deleted similar additions in Assessee’s own case for AY 2016-17 & in the case of Shri M.N. Rajendra Kumar.
Revenue contended before ITAT that Loose sheets were supported by statements recorded u/s 132(4) & 133A. Assessee was not offered cross-examination, hence matter should be remanded back to AO.
