Smt. Ranjana Kumari/Kalta Vs DCIT/ACIT (Central) (ITAT Chandigarh)
Conclusion: Addition of ₹90 lakh made under section 69A towards alleged cash payment for purchase of property as well as the addition made under section 69C on account of alleged unaccounted purchases was deleted as additions based solely on third-party documents, without independent corroboration or evidence directly linking the transactions to assessee were not sustainable in law.
Held: Search action was conducted on the Omaxe Group and on M/s Himgiri Beverages. Based on data allegedly recovered from a hard disk seized during the search, AO alleged that the assessee had paid ₹90 lakh in cash as on-money over and above the registered consideration for purchase of a residential flat. AO also relied on certain documents found during search proceedings in the Kalta Group to infer that the actual purchase consideration exceeded the amount disclosed in the sale deed. Further, on the basis of diaries seized from the premises of a third party, namely M/s Himgiri Beverages, AO alleged that the assessee had made unaccounted cash purchases of liquor aggregating to ₹27 lakh and corresponding additions were made under section 69C. Assessee denied both allegations and contended that the property was purchased entirely through banking channels and that the seized diaries neither belonged to assessee nor contained any direct reference establishing that the alleged transactions pertained to her. Commissioner (Appeals) upheld both additions. Aggrieved thereby, assessee filed appeals before the Tribunal. Assessee contended that the addition of ₹90 lakh was based solely on uncorroborated third-party material seized during a separate search and that no evidence existed to establish actual payment of on-money. It was submitted that the entire purchase consideration was duly recorded and paid through banking channels. With regard to the addition for alleged unaccounted purchases, assessee argued that the seized diaries belonged to a third party and that the presumptions under sections 132(4A) and 292C could not be invoked against her. Revenue contended that the seized materials, statements recorded during search proceedings and surrounding circumstances sufficiently established undisclosed cash payments and unaccounted purchases. It was held that addition of ₹90 lakh towards alleged on-money payment was unsustainable. The entire addition rested on third-party seized material without any independent corroboration. Assessee had consistently denied making any cash payment and had demonstrated that the consideration for acquisition of the property was paid through banking channels. Mere notings in documents seized from another person, unsupported by corroborative evidence, could not justify an addition under section 69A. Tribunal further held that the addition on account of alleged unaccounted purchases was also untenable. The diaries relied upon by the Revenue were seized from a third party and no cogent material was brought on record to establish that the entries therein related to the assessee. The statutory presumptions under sections 132(4A) and 292C were available only against the person from whose possession the documents were found and could not automatically be extended to assessee. In the absence of any direct evidence linking the seized entries with the assessee and considering that no corresponding unaccounted sales or stock discrepancies were found, the addition could not be sustained.
