Air Con Systems (India) Pvt. Ltd Vs DCIT (ITAT Delhi)
ITAT Delhi deletes ₹62 lakh addition u/s 69A – Undated loose paper found in third-party search, no cash found, no corroboration & even wrong assessment year
A search was conducted in the case of Sanjay Jain & Mehtas Group on 26.10.2020 & again on 11.02.2021. During this action, a loose sheet (page 46 of Annexure A-7 from FCB-1) was found not from the assessee, but from the residence of a third party, Shri Surender Gupta. The AO presumed that handwritten notings such as “CASH ANTH HR” & “CASH ANTH YOG” represented ₹62,00,000 cash allegedly received by Air Con Systems (India) Pvt. Ltd. for its “Anthurium” project, further assuming that “HR” meant Harsh Gupta & “YOG” meant Yogesh Jangra acting on behalf of the assessee. Solely based on these presumptions, without any statement or evidence, the AO made addition u/s 69A. CIT(A) confirmed the addition.
Before Tribunal, Assessee contended that the loose paper was not seized from its premises, was undated, did not mention the assessee’s name, no cash was found from the assessee, & no corroborative evidence or statement linked Assessee to the entry. It was also pointed out that construction of Project Anthurium started only in FY 2019-20, but AO made addition in AY 2020-21. Law is well settled that if a seized document is undated & there is no contrary material, it is presumed to belong to the year of search. The search took place in FY 2020-21 relevant to AY 2021-22, therefore addition in AY 2020-21 itself was erroneous.
