DCIT Vs Rajesh Kumar Kedia (ITAT Kolkata)
Dumb Documents & Probable Transactions Can’t Justify Reopening – ITAT Kolkata Quashes 69A Addition & Reassessment Based on Search
Assessee was alleged to have advanced unaccounted cash loans of ₹8.80 crore through finance brokers Sanwaria & Kasera, based on documents seized during a search on their group. AO reopened the assessment u/s 147 & added ₹9.41 crore u/s 69A (including interest & brokerage) treating the seized papers as proof of unaccounted investments. AO also relied on brokers’ statements recorded u/s 132(4), though the Assessee’s name was not specifically mentioned as lender/borrower.
Before CIT(A), Assessee denied any such transactions, contending that the seized “Ruka” papers were dumb documents with no link to him, & that no cross-examination of the brokers was allowed. CIT(A) found that the seized documents did not contain the Assessee’s name or signatures, were undated, symbolic, & uncorroborated, & that no presumption u/s 132(4A)/292C could apply since papers were recovered from a third party. Referring to several precedents including Common Cause v. UOI (SC), V.C. Shukla (SC), CIT v. S.M. Agarwal (Del HC), PCIT v. Gaurang Upadhyay (Guj HC), Sunita Dhadda (Raj HC, affirmed by SC), & others, CIT(A) deleted the addition holding that such unverified loose sheets cannot form basis of addition.
