Ramya Resorts Pvt. Ltd. Vs DCIT (ITAT Bangalore)
ITAT Bangalore Upholds Section 69C Additions Based on Seized Material; ‘Dumb Document’ Plea Rejected
The Bangalore Bench of the Income Tax Appellate Tribunal dismissed the appeals filed by Ramya Resorts Pvt. Ltd. for AYs 2014–15 and 2015–16, affirming additions made under Section 69C (unexplained expenditure) and Section 69 (unexplained investment) pursuant to proceedings under Section 153C following a search.
For AY 2014–15, the Tribunal upheld the addition of ₹37.84 lakh as unexplained expenditure towards resort maintenance. The addition was based on seized documents, statements of persons managing the resort , and corroborative material, including supplementary evidence such as Google search data. The assessee’s contention that the seized papers were merely “dumb documents” was rejected, as the materials were found from the assessee’s premises, related to the resort’s operations, and were not shown to be recorded in the books. The Tribunal endorsed the approach of allocating the net unaccounted expenditure across four years.
For AY 2015–16, the Tribunal confirmed (i) the identical ₹37.84 lakh addition under Section 69C for maintenance expenditure for the same reasons, and (ii) an addition of ₹39.47 lakh as unexplained investment in land purchase at Chilamathur, Andhra Pradesh. While part consideration (₹22.98 lakh) was paid through banking channels, the assessee failed to explain the discrepancy between the agreed consideration and the registered value, and provided no evidence for the balance amount. In the absence of satisfactory explanation or corroboration, the Tribunal found no infirmity in the CIT(A)’s findings.
Accordingly, both appeals were dismissed, reinforcing that where seized material is corroborated by statements and surrounding evidence, additions under Sections 69/69C are sustainable and the “dumb document” defence cannot succeed without credible rebuttal.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. These two appeals are filed by Ramya Resorts Pvt. Ltd. (the assessee/appellant) for the assessment years 2014-15 & 2015-16 against the appellate order passed by the CIT(Appeals)-11, Bengaluru [ld. CIT(A)] dated 31.7.2024 wherein the appeal filed by the assessee against the assessment order passed by ACIT, Circle 1(4), Bangalore u/s. 153C r.w.s. 143(3) r.w.s. 253D of the Income-tax Act, 1961 [the Act] dated 31.12.2018 was partly allowed.
