ACIT Vs Maragathamani Shanmugam (ITAT Chennai)
ITAT Chennai Upholds Deletion of ₹2 Crore Addition u/s 69; Quashes Extended 153A Jurisdiction for AY 2013-14 Based on Third-Party Loose Sheets
The Chennai Bench of the ITAT dismissed the Revenue’s appeals and upheld the CIT(A)’s order deleting the addition of ₹2 crore made u/s 69 as unexplained investment for AY 2013-14. The Tribunal held that the addition was impermissibly based on uncorroborated loose sheets seized from a third-party premises and a third-party statement, neither of which established that the assessee individually made the alleged deposit. The seized papers were not recovered from the assessee, were not in the assessee’s handwriting, lacked essential particulars (nature, year, mode, trail), and were therefore treated as dumb/defective documents without evidentiary value. Mere statements or “cover money” notings, absent independent corroboration (bank trail, confirmations, asset linkage), cannot sustain an addition u/s 69.
Separately, the Tribunal affirmed the CIT(A)’s finding that jurisdiction u/s 153A for AY 2013-14 (beyond six years) was invalid. For invoking the extended 7th–10th year window, the AO must possess and record satisfaction of undisclosed income represented by a specified asset exceeding ₹50 lakh, as mandated by the fourth proviso to s.153A. No such undisclosed asset or recorded satisfaction existed; hence, the notice and consequent assessment were void ab initio. The Tribunal relied on consistent jurisprudence (including Sant Lal, Dhakeshwari Cotton Mills, Pullangode Rubber, and Goldstone Cements) to conclude that both merits and jurisdiction failed, and therefore the Revenue’s appeals were dismissed
FULL TEXT OF THE ORDER OF ITAT CHENNAI
