Bipin Agarwal Vs ACIT (ITAT Delhi)
Delhi ITAT Deletes ₹5.50 Lakh Addition u/s 69A: No Cash Found, Third-Party Seized Ledger Not Enough
The Delhi Bench ‘B’ of the ITAT allowed the appeal of holding that addition of ₹5,50,000 u/s 69A cannot be sustained merely on the basis of third-party seized documents when no cash was found in the possession of the Assessee during search.
The case arose from a search u/s 132 on CFM Group of Companies, wherein certain tally ledgers (“BCM/Porwal”) allegedly reflected commission payment of ₹5,50,000 to the Assessee. Relying solely on these seized ledgers and statement of a third party recorded u/s 132(4), the AO reopened assessment u/s 147 and made addition u/s 69A as unexplained money, which was confirmed by the CIT(A).
The Tribunal noted that no cash was found with the Assessee, and the entire addition was based only on documents seized from a third party without any independent enquiry or corroborative evidence establishing ownership or actual receipt of cash by the Assessee. The Assessee had consistently denied the transaction.
Relying on its earlier decision in DCIT vs. Yograj Arora (ITA No.2440/Del/2022), the Tribunal reiterated that “ownership of money” is a sine qua non for invoking section 69A and mere presumptions based on third-party records or conjectures cannot justify such addition.
Accordingly, the ITAT deleted the addition of ₹5,50,000 made u/s 69A and allowed the Assessee’s appeal.
FULL TEXT OF THE ORDER OF ITAT DELHI
