DEPUTY COMMISSIONER OF INCOME TAX, CHENNAI V. GOPU RAJAGOPAL, CHENNAI

ITA 1811/CHNY/2024

AI Insights

The case revolves around an appeal by the Revenue against the order of the CIT(A) which had deleted an addition of Rs. 11.50 crores made by the Assessing Officer (AO) as undisclosed income of the assessee, Gopu Rajagopal, for the Assessment Year 2017-18. The addition was based on a diary seized during a search operation at the premises of M/s SRS Mining, which allegedly contained entries of cash payments made to the assessee for property transactions. The assessee contested the addition, leading to the CIT(A)'s decision to delete the addition, which was challenged by the Revenue in the Tribunal. The Tribunal, after considering the facts and the legal precedents, upheld the CIT(A)'s decision, agreeing that the seized material did not conclusively prove the assessee's receipt of on-money.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472165 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Other Referred Cases: Thiru A.J. Rajesh kumar Vs Dy.CIT(2022) 441 ITR 495, Common cause Vs UOI, JCIT Vs Narayana Reddy Vakati (128 taxmann.com 377), ACIT vs Satyapal Wassan [TS-5104-ITAT-2007], Riveria Properties Pvt. Ltd. Vs ITO (ITA No,250/Mum/2013), K.P. Varghese vs. ITO (131 TR 597), C.B.I. v. V.C. Shukla, Sant Lal (118,Taxmann.com 432), Ch. Atchiah (218 ITR 239)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NATHALA RAVI BABU
• Assessee Lawyers: VIJAY MEHTA
• Keywords: Set aside; Corroborative evidences; Unexplained expenditure; Sale consideration of property below Jantri Value; Income from undisclosed sources; Document seized; Documents seized; Onus to prove; Retraction; Loose papers; Bogus
• Section: 132; 131; 22; 133(6); 13; 69A; 20

Judgement Text

" आयकर अपीलीय अिधकरण, ‘बी’\u0001यायपीठ, चे\tई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI \u0001ीएबीटी. वक , \u000bाियक सद\u0011 एवं एवं एवं एवं \u0001ीअिमताभशु\u0018ा, लेखासद\tक ेसम\u001b BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकरअपीलसं./ITA No.1811/Chny/2024 & Cross-Objection No.69/Chny/2024 िनधा\u000eरणवष\u000e/Assessment Year: 2017-18 The DCIT, Central Circle-2(4), Chennai. v. Gopu Rajagopal, 1211, 12th Floor, Phoenix Apartments, Velacherry-600 042. [PAN: BBLPR 8282 G] (अपीलाथ\u0016/Appellant) (\u0017\u0018यथ\u0016/Respondent/Cross- Objector) Department by : Mr.Nathala Ravi Babu, CIT Assessee by : Mr.Vijay Mehta, CA सुनवाईक\u001cतारीख/Date of Hearing : 05.12.2024 घोषणाक\u001cतारीख /Date of Pronouncement : 28.02.2025 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the Revenue& Cross-Objection preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), (hereinafter in short ‘the Ld.CIT(A)’), Chennai- 19, dated 30.04.2024 for the Assessment Year (hereinafter in short ‘AY’) 2017-18. 2. At the outset, the is a delay of ‘65’ days in filing of prevented by sufficient cause, condonation of delay, for which, the Ld.DR didn’t raise any objection and hence, we adjudicate the Cross-Objection 3. The Revenue has raised the following legal grounds: 1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law. 2. The Ld.CIT(A) erred in deleting the addition of 11,50,00,000 income u/s.69A in respect of cash received by the assessee outside the books from the partners of M/s.S.R.S.Mining in the property transaction as evidenced by the material seized during the course of search In the case of M/s.S.R.S.M 2.1 The Ld.CIT(A) erred in observing that the addition has been made without bringing any cogent or corroborative evidence on record, without appreciating that the addition was made on the basis of diary seized during the course of search in the cas M/s.S.R.S.Mining and the admission made by the assessee in his sworn statement recorded u/s.132(4) during the course of search in the residential premises of the assessee. The seized material and sworn statement u/s.132(4) corroborates each other. 2.2 The CIT(A) failed to appreciate that the assessee had not substantiated his claim that the amount received as advance had been returned. Further the assessee had admitted Rs.3.30 Crore as undisclosed income for AY 2016 AY 2017-18 in his sworn statement. The assessee offered Rs 3.30 Crore for the AY 2016 17 under PMGKY Scheme. The admission of part of the entries in the seized material by the assessee gives validation to the entries in the seized material and the Ld.CIT(A) failed to appreciate this. 2.3 The Ld.CIT(A) failed to appreciate that the Hon'ble Madras High court in the case of Thiru A.J. Rajesh kumar Vs Dy.CIT(2022) 441 ITR 495 observed that a statement made voluntarily by the assessee could form the basis of assessment the view that according to him, such statement recorded on oath, is not correct he should demonstrate with sufficient credible corroborative and cogent, convincing material evidence at the earliest point of time in terms of retra should not be a mere assertion.. 2.4 The CIT(A) failed to appreciate that the assessee retracted his statement given u/s.132(4) during assessment proceedings but his retraction is not based on any credible evidence, thus he failed t explanation furnished with reference to contents of seized documents after search proceedings. ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 2 :: At the outset, the Ld.Counsel for the assessee submitted that there ’ days in filing of Cross-Objection. Since assessee prevented by sufficient cause, the Ld.Counsel for the assessee prayed for donation of delay, for which, the Ld.DR didn’t raise any objection and hence, we condone the delay of ‘65’ days and Objection on merits. The Revenue has raised the following legal grounds: 1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts 2. The Ld.CIT(A) erred in deleting the addition of 11,50,00,000/- made as undisclosed income u/s.69A in respect of cash received by the assessee outside the books from the partners of M/s.S.R.S.Mining in the property transaction as evidenced by the material seized during the course of search In the case of M/s.S.R.S.Mining. 2.1 The Ld.CIT(A) erred in observing that the addition has been made without bringing any cogent or corroborative evidence on record, without appreciating that the addition was made on the basis of diary seized during the course of search in the cas M/s.S.R.S.Mining and the admission made by the assessee in his sworn statement recorded u/s.132(4) during the course of search in the residential premises of the assessee. The seized material and sworn statement u/s.132(4) corroborates each other. The CIT(A) failed to appreciate that the assessee had not substantiated his claim that the amount received as advance had been returned. Further the assessee had admitted Rs.3.30 Crore as undisclosed income for AY 2016- 17 and 11.50 Crores for the 18 in his sworn statement. The assessee offered Rs 3.30 Crore for the AY 2016 17 under PMGKY Scheme. The admission of part of the entries in the seized material by the assessee gives validation to the entries in the seized material and the Ld.CIT(A) 2.3 The Ld.CIT(A) failed to appreciate that the Hon'ble Madras High court in the case of Thiru A.J. Rajesh kumar Vs Dy.CIT(2022) 441 ITR 495 observed that a statement made voluntarily by the assessee could form the basis of assessment and if the deponent is of the view that according to him, such statement recorded on oath, is not correct he should demonstrate with sufficient credible corroborative and cogent, convincing material evidence at the earliest point of time in terms of retraction, such retraction should not be a mere assertion.. 2.4 The CIT(A) failed to appreciate that the assessee retracted his statement given u/s.132(4) during assessment proceedings but his retraction is not based on any credible evidence, thus he failed to discharge his onus to substantiate the alternate explanation furnished with reference to contents of seized documents after search /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal Ld.Counsel for the assessee submitted that there ince assessee was Ld.Counsel for the assessee prayed for donation of delay, for which, the Ld.DR didn’t raise any serious s and proceed to 1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts made as undisclosed income u/s.69A in respect of cash received by the assessee outside the books from the partners of M/s.S.R.S.Mining in the property transaction as evidenced by the material 2.1 The Ld.CIT(A) erred in observing that the addition has been made without bringing any cogent or corroborative evidence on record, without appreciating that the addition was made on the basis of diary seized during the course of search in the case of M/s.S.R.S.Mining and the admission made by the assessee in his sworn statement recorded u/s.132(4) during the course of search in the residential premises of the assessee. The seized material and sworn statement u/s.132(4) corroborates each other. The CIT(A) failed to appreciate that the assessee had not substantiated his claim that the amount received as advance had been returned. Further the assessee had 17 and 11.50 Crores for the 18 in his sworn statement. The assessee offered Rs 3.30 Crore for the AY 2016- 17 under PMGKY Scheme. The admission of part of the entries in the seized material by the assessee gives validation to the entries in the seized material and the Ld.CIT(A) 2.3 The Ld.CIT(A) failed to appreciate that the Hon'ble Madras High court in the case of Thiru A.J. Rajesh kumar Vs Dy.CIT(2022) 441 ITR 495 observed that a statement made and if the deponent is of the view that according to him, such statement recorded on oath, is not correct he should demonstrate with sufficient credible corroborative and cogent, convincing ction, such retraction 2.4 The CIT(A) failed to appreciate that the assessee retracted his statement given u/s.132(4) during assessment proceedings but his retraction is not based on any o discharge his onus to substantiate the alternate explanation furnished with reference to contents of seized documents after search 2.5 The Ld.CIT(A) erred in relying on the decision of Apex Court in the case of Common cause Vs UOI which has require much high standard of burden of proof as compared to the Income tax proceedings (Civil) which require only preponderance of probability. 2.6 The Ld.CIT(A) erred in observing that the seized did not contain complete information to facilitate drawing of Inference against the assessee, without appreciating that the assessee himself admitted the receipt of on money relating to property transaction for the AYs 2 statement but offered the said income pertaining to the undisclosed income agreed for the AY 2016-17 alone under PMGKY Scheme. 2.7 The Ld.CIT(A) erred in observing that the material relied upon by the AO is a dumb document and the assessee did not acknowledge the receipt of any such payment by appending his signature /initial against the entries. The Ld.CIT(A) ought to have appreciated that maintaining clear, unambiguous and formal records of transaction of such nature would not be done for obvious reasons. For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be res 4. The assessee has raised the following legal grounds in Cross Objection: Following grounds of Cross arguments in Department's appeal: 1. On the facts and in the circumstances of the ca not declaring the assessment order passed by the AO as bad in law and is null and void. 2. On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in not considering the submissions filed by found during the course of search for the captioned assessment year. 3. The assessment order was time barred and hence, is void ab initio. The cross-objector craves leave to add to, amend, alter or delete th of cross-objection. 5. Brief facts of the case are that, initially a search u/s 132 of the Act was conducted upon one SRS Mining Group on 08.12.2016 and in the course of search, a diary was found from the possession of one key person, Mr. Sekar Reddy note book ID marked ANN/KGAR/MPKSSR/B&D/S of Rs.11.50 crores made during FY 2016 ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 3 :: 2.5 The Ld.CIT(A) erred in relying on the decision of Apex Court in the case of Common cause Vs UOI which has been rendered in the context of criminal proceedings which require much high standard of burden of proof as compared to the Income tax proceedings (Civil) which require only preponderance of probability. 2.6 The Ld.CIT(A) erred in observing that the seized material used against the assessee did not contain complete information to facilitate drawing of Inference against the assessee, without appreciating that the assessee himself admitted the receipt of on money relating to property transaction for the AYs 2016-17 & 2017-18 in the sworn statement but offered the said income pertaining to the undisclosed income agreed for 17 alone under PMGKY Scheme. 2.7 The Ld.CIT(A) erred in observing that the material relied upon by the AO is a dumb the assessee did not acknowledge the receipt of any such payment by appending his signature /initial against the entries. The Ld.CIT(A) ought to have appreciated that maintaining clear, unambiguous and formal records of transaction of t be done for obvious reasons. For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored. The assessee has raised the following legal grounds in Cross Following grounds of Cross-objection are without prejudice to each other and assessee's arguments in Department's appeal: 1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in not declaring the assessment order passed by the AO as bad in law and is null and void. 2. On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in not considering the submissions filed by the assessee that no incriminating material was found during the course of search for the captioned assessment year. 3. The assessment order was time barred and hence, is void ab initio. objector craves leave to add to, amend, alter or delete the foregoing grounds Brief facts of the case are that, initially a search u/s 132 of the Act was conducted upon one SRS Mining Group on 08.12.2016 and in the course of search, a diary was found from the possession of one key r. Sekar Reddy, wherein certain pencil scribblings note book ID marked ANN/KGAR/MPKSSR/B&D/S-2 relating to payments of Rs.11.50 crores made during FY 2016-17. In the post search enquiries, /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal 2.5 The Ld.CIT(A) erred in relying on the decision of Apex Court in the case of Common been rendered in the context of criminal proceedings which require much high standard of burden of proof as compared to the Income tax material used against the assessee did not contain complete information to facilitate drawing of Inference against the assessee, without appreciating that the assessee himself admitted the receipt of on 18 in the sworn statement but offered the said income pertaining to the undisclosed income agreed for 2.7 The Ld.CIT(A) erred in observing that the material relied upon by the AO is a dumb the assessee did not acknowledge the receipt of any such payment by appending his signature /initial against the entries. The Ld.CIT(A) ought to have appreciated that maintaining clear, unambiguous and formal records of transaction of For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) The assessee has raised the following legal grounds in Cross- objection are without prejudice to each other and assessee's se and in law, the Id. CIT(A) erred in not declaring the assessment order passed by the AO as bad in law and is null and void. 2. On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in the assessee that no incriminating material was e foregoing grounds Brief facts of the case are that, initially a search u/s 132 of the Act was conducted upon one SRS Mining Group on 08.12.2016 and in the course of search, a diary was found from the possession of one key scribblings were found in 2 relating to payments 17. In the post search enquiries, it was gathered that each of the three (3) partners o Group had booked an apartment in project ‘One Crest’, Chennai, which was being developed by M/s Kara Property Ventures LLP for which they had made payments aggregating to Rs.11.50 crores. Accordingly, a consequential search action was cond one of the authorized signatories his statement was also recorded u/s 132(4) of the Act. It is noted that, the assessee in his Answer to Q No. 17 had admitted to have received Rs.14.80 crores from Shri Sekar Reddy on behalf of the LLP by way of on monies towards the apartments booked by the three (3) partners, out of which Rs.3.30 crores was received in earlier FY 2015 crores was received in relevant FY 2016 offered to tax by way of additional income. 6. Subsequently, the assessee is noted to have filed his return of income declaring total income of Rs.68,96,750/ he didn’t offer any additional income. The AO is confronted the assessee statement recorded u/s 132(4) of the Act was not admitted in the return of income. The assessee vide his letter dated 28.11.2018 is noted to have informed the AO that he had retracted from his statement because it was obtained under duress. The AO, thereafter, is noted to have personally examined the assessee ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 4 :: it was gathered that each of the three (3) partners of the SRS Mining Group had booked an apartment in project ‘One Crest’, Chennai, which was being developed by M/s Kara Property Ventures LLP for which they had made payments aggregating to Rs.11.50 crores. Accordingly, a consequential search action was conducted upon the assessee who was signatories of M/s Kara Property Ventures LLP and his statement was also recorded u/s 132(4) of the Act. It is noted that, the assessee in his Answer to Q No. 17 had admitted to have received rores from Shri Sekar Reddy on behalf of the LLP by way of on monies towards the apartments booked by the three (3) partners, out of which Rs.3.30 crores was received in earlier FY 2015-16 and Rs.11.50 crores was received in relevant FY 2016-17, which he is noted to have offered to tax by way of additional income. Subsequently, the assessee is noted to have filed his return of income declaring total income of Rs.68,96,750/- on 23.11.2018 wherein t offer any additional income. The AO is accordingly noted to have confronted the assessee, as to why, the disclosure offered in his statement recorded u/s 132(4) of the Act was not admitted in the return of income. The assessee vide his letter dated 28.11.2018 is noted to have at he had retracted from his statement because it was obtained under duress. The AO, thereafter, is noted to have personally examined the assessee after summoning him u/s 131 of the Act on /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal f the SRS Mining Group had booked an apartment in project ‘One Crest’, Chennai, which was being developed by M/s Kara Property Ventures LLP for which they had made payments aggregating to Rs.11.50 crores. Accordingly, a ucted upon the assessee who was of M/s Kara Property Ventures LLP and his statement was also recorded u/s 132(4) of the Act. It is noted that, the assessee in his Answer to Q No. 17 had admitted to have received rores from Shri Sekar Reddy on behalf of the LLP by way of on- monies towards the apartments booked by the three (3) partners, out of 16 and Rs.11.50 s noted to have Subsequently, the assessee is noted to have filed his return of on 23.11.2018 wherein accordingly noted to have the disclosure offered in his statement recorded u/s 132(4) of the Act was not admitted in the return of income. The assessee vide his letter dated 28.11.2018 is noted to have at he had retracted from his statement because it was obtained under duress. The AO, thereafter, is noted to have personally u/s 131 of the Act on 26.12.2018 and his sworn statement was recorded. The AO is noted to have observed that, the assessee has affirmed in his statement that he had not received any monies from M/s SRS Mining and its partners and also showed that he was not the authorized signatory of the M/s Kara Property Ventures LLP to receive monies on beh thereafter, is noted to have made enquiry u/s 133(6) from M/s Kara Property Ventures LLP and the said LLP is noted to have informed the AO that the apartments booked by the partners of M/s SRS Mining had been cancelled and that the payments received from them had been refunded. It was also submitted that, from the monies received through banking channel. 7. In light of the above, the AO is noted to have observed that, the assessee’s retraction was an after initially (his original statement later in collusion with partners of M/s SRS Mining, he had retracted the statement without any valid reason. The AO, therefore, on the basis of the original statement of the assessee and the material seized from the premises of M/s SRS Mining held tha monies of Rs.11.50 crores which he added u/s 69A of the Act. On appeal the Ld. CIT(A) was pleased to delete the said addition. Aggrieved by the order of the Ld. CIT(A), the Revenue is now in appeal before us. The assessee is noted to have filed cross objections supporting the action of ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 5 :: 26.12.2018 and his sworn statement was recorded. The AO is noted to have observed that, the assessee has affirmed in his statement that he had not received any monies from M/s SRS Mining and its partners and also showed that he was not the authorized signatory of the M/s Kara Property Ventures LLP to receive monies on behalf of the firm. The AO, thereafter, is noted to have made enquiry u/s 133(6) from M/s Kara Property Ventures LLP and the said LLP is noted to have informed the AO that the apartments booked by the partners of M/s SRS Mining had been payments received from them had been refunded. that, the LLP had not received any monies apart from the monies received through banking channel. In light of the above, the AO is noted to have observed that, the on was an after-thought and that when it was his original statement), it was given without any influence later in collusion with partners of M/s SRS Mining, he had retracted the statement without any valid reason. The AO, therefore, on the basis of the original statement of the assessee and the material seized from the premises of M/s SRS Mining held that the assessee was in receipt of monies of Rs.11.50 crores which he added u/s 69A of the Act. On appeal the Ld. CIT(A) was pleased to delete the said addition. Aggrieved by the order of the Ld. CIT(A), the Revenue is now in appeal before us. The is noted to have filed cross objections supporting the action of /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal 26.12.2018 and his sworn statement was recorded. The AO is noted to have observed that, the assessee has affirmed in his statement that he had not received any monies from M/s SRS Mining and its partners and also showed that he was not the authorized signatory of the M/s Kara alf of the firm. The AO, thereafter, is noted to have made enquiry u/s 133(6) from M/s Kara Property Ventures LLP and the said LLP is noted to have informed the AO that the apartments booked by the partners of M/s SRS Mining had been payments received from them had been refunded. the LLP had not received any monies apart In light of the above, the AO is noted to have observed that, the it was recorded , it was given without any influence, but later in collusion with partners of M/s SRS Mining, he had retracted the statement without any valid reason. The AO, therefore, on the basis of the original statement of the assessee and the material seized from the t the assessee was in receipt of monies of Rs.11.50 crores which he added u/s 69A of the Act. On appeal, the Ld. CIT(A) was pleased to delete the said addition. Aggrieved by the order of the Ld. CIT(A), the Revenue is now in appeal before us. The is noted to have filed cross objections supporting the action of the Ld.CIT(A) on certain legal grounds, which have already been noted supra. 8. Assailing the action of Ld. CIT(A), the Ld. DR has argued that, si seized material ANN/KGAR/MPKSSR/B&D/S has been paid to the assessee by the partners of M/s.SRS Mining for booking flats in project “one Crest” Property Ventures LLP the veracity of the said seized material could not be doubted. He further contended that, the contents of the seized material stood corroborated by the assessee’s statement admitted receiving Rs.14 the assessee had paid taxes on Rs.3.30 crores and that the remaining sum have been received, was wrongly of income. Supporting the order of had rightly added the impugned sum 9. Per contra, the Ld. AR for the assessee submitted that, there was no incriminating material 21.12.2016 at assessee’s premise assessee had received such huge sum of Rs.11.50 crores. He brought to our notice that, the assessee was continuously interrogated for 40 hours ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 6 :: the Ld.CIT(A) on certain legal grounds, which have already been noted Assailing the action of Ld. CIT(A), the Ld. DR has argued that, si seized material ANN/KGAR/MPKSSR/B&D/S-2 revealed that Rs.11.50 Crs. has been paid to the assessee by the partners of M/s.SRS Mining for booking flats in project “one Crest”, a real estate project of of which assessee was the authorized signatory said seized material could not be doubted. He further contended that, the contents of the seized material stood corroborated by statement recorded u/s.132(4) of the Act wherein had receiving Rs.14.80 crores. He also brought to our the assessee had paid taxes on Rs.3.30 crores under the PMGKY Scheme and that the remaining sum of Rs.11.50 crores, although admitted to have been received, was wrongly retracted and not offered in the return of income. Supporting the order of AO, he thus contended that, the AO had rightly added the impugned sum in the hands of the assessee. Per contra, the Ld. AR for the assessee submitted that, there was incriminating material found in the course of search sessee’s premises which would suggest that the assessee had received such huge sum of Rs.11.50 crores. He brought to our notice that, the assessee was continuously interrogated for 40 hours /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal the Ld.CIT(A) on certain legal grounds, which have already been noted Assailing the action of Ld. CIT(A), the Ld. DR has argued that, since evealed that Rs.11.50 Crs. has been paid to the assessee by the partners of M/s.SRS Mining for roject of M/s Kara of which assessee was the authorized signatory, said seized material could not be doubted. He further contended that, the contents of the seized material stood corroborated by of the Act wherein had .80 crores. He also brought to our notice that, PMGKY Scheme of Rs.11.50 crores, although admitted to not offered in the return AO, he thus contended that, the AO in the hands of the assessee. Per contra, the Ld. AR for the assessee submitted that, there was search conducted on s which would suggest that the assessee had received such huge sum of Rs.11.50 crores. He brought to our notice that, the assessee was continuously interrogated for 40 hours and at the fag-end, scribblings found in loose papers seized at the premises of M/s SRS Mining, which was not even actually shown to him and, the assessee not being in the correct frame of mind, accepted whatever the Investigation Officer wanted him to admit showed us that, this fact was evident from the question no. 17 and assessee’s answer wherein the assessee was confronted with noting of Rs.2 crore in relation to FY 2015 was Rs.3.3 crores, which had no basis wha notice that, later on, within twelve days, the assessee had retracted from his statement by filing an affidavit. He submitted that, the assessee had stood by his retraction in the original assessment proceedings, and also during cross examination by the AO on 26.12.2018. He thus contended that the original statement having been validly retracted was not a reliable piece of evidence to make the impugned addition. 10. The Ld. AR further showed us that, the paper seized from M/s SRS Mining was stray was contended that, there was no acknowledgment, signature etc. of the assessee on that page, which would suggest that the assessee had actually received the monies. According to h figures by the third party, without any noting in handwriting of the assessee or his signature etc., cannot be straightaway inferred that ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 7 :: he was questioned regarding the contents of ribblings found in loose papers seized at the premises of M/s SRS Mining, which was not even actually shown to him and, the assessee not being in the correct frame of mind, accepted whatever the Investigation Officer wanted him to admit, to relieve himself from the ordeal showed us that, this fact was evident from the question no. 17 and assessee’s answer wherein the assessee was confronted with noting of Rs.2 crore in relation to FY 2015-16 and that his admission in his answer was Rs.3.3 crores, which had no basis whatsoever. It was brought to our notice that, later on, within twelve days, the assessee had retracted from his statement by filing an affidavit. He submitted that, the assessee had stood by his retraction in the original assessment proceedings, and also ing cross examination by the AO on 26.12.2018. He thus contended that the original statement having been validly retracted was not a reliable piece of evidence to make the impugned addition. The Ld. AR further showed us that, the noting’s found in a l paper seized from M/s SRS Mining was stray noting’s made in pencil. It was contended that, there was no acknowledgment, signature etc. of the assessee on that page, which would suggest that the assessee had actually received the monies. According to him, therefore st figures by the third party, without any noting in handwriting of the assessee or his signature etc., cannot be straightaway inferred that /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal he was questioned regarding the contents of ribblings found in loose papers seized at the premises of M/s SRS Mining, which was not even actually shown to him and, the assessee not being in the correct frame of mind, accepted whatever the Investigation from the ordeal. He showed us that, this fact was evident from the question no. 17 and assessee’s answer wherein the assessee was confronted with noting of 16 and that his admission in his answer tsoever. It was brought to our notice that, later on, within twelve days, the assessee had retracted from his statement by filing an affidavit. He submitted that, the assessee had stood by his retraction in the original assessment proceedings, and also ing cross examination by the AO on 26.12.2018. He thus contended that the original statement having been validly retracted was not a found in a loose made in pencil. It was contended that, there was no acknowledgment, signature etc. of the assessee on that page, which would suggest that the assessee had im, therefore stray noting’s of figures by the third party, without any noting in handwriting of the assessee or his signature etc., cannot be straightaway inferred that monies had exchanged hands. He further argued that, it was an admitted fact that the project was being developed by M/s Kara Property Ventures LLP and that the apartments were to be sold by them and therefore on monies, if any, could be inferred only in the hands of LLP and not the assessee. The Ld. AR contended that, it is well settled in income is to be brought to tax when the Revenue was aware that the appellant had not sold these flats, the on-monies could not have been legally added in his hands. He further contended that, in spite Revenue didn’t bother to make any enquiries from M/s Kara Property Ventures LLP for almost two years and that enquiry was made only at the fag end of assessment, from which it came to light that the sale of apartments never actually fructified but was rescinded. According to AR therefore, when the flats were not sold, the question of bringing to tax on-monies didn’t arise. He thus urged that the Ld. CIT(A) had rightly deleted the impugned addition. 11. On the assessee’s declaration under PMGKY Scheme, the Ld. AR showed that, the declaration was not made with reference to the impugned issue and therefore the Ld. DR’s contention that the said declaration related to receipt of factually erroneous. The Ld. AR particularly invited our attention to several decisions rendered by this Tribunal, placed at Pages 185 to 235 of ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 8 :: monies had exchanged hands. He further argued that, it was an admitted roject was being developed by M/s Kara Property Ventures LLP and that the apartments were to be sold by them and therefore on monies, if any, could be inferred only in the hands of LLP and not the assessee. The Ld. AR contended that, it is well settled in income is to be brought to tax, in the hands of right person when the Revenue was aware that the appellant had not sold these flats, monies could not have been legally added in his hands. He further spite of these facts being known to the Revenue, the t bother to make any enquiries from M/s Kara Property Ventures LLP for almost two years and that enquiry was made only at the fag end of assessment, from which it came to light that the sale of artments never actually fructified but was rescinded. According to AR therefore, when the flats were not sold, the question of bringing to tax t arise. He thus urged that the Ld. CIT(A) had rightly deleted the impugned addition. the assessee’s declaration under PMGKY Scheme, the Ld. AR showed that, the declaration was not made with reference to the impugned issue and therefore the Ld. DR’s contention that the said declaration related to receipt of purported on-monies in question w factually erroneous. The Ld. AR particularly invited our attention to several decisions rendered by this Tribunal, placed at Pages 185 to 235 of /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal monies had exchanged hands. He further argued that, it was an admitted roject was being developed by M/s Kara Property Ventures LLP and that the apartments were to be sold by them and therefore on- monies, if any, could be inferred only in the hands of LLP and not the assessee. The Ld. AR contended that, it is well settled in law that right in the hands of right person, and that when the Revenue was aware that the appellant had not sold these flats, monies could not have been legally added in his hands. He further of these facts being known to the Revenue, the t bother to make any enquiries from M/s Kara Property Ventures LLP for almost two years and that enquiry was made only at the fag end of assessment, from which it came to light that the sale of artments never actually fructified but was rescinded. According to Ld. AR therefore, when the flats were not sold, the question of bringing to tax t arise. He thus urged that the Ld. CIT(A) had rightly the assessee’s declaration under PMGKY Scheme, the Ld. AR showed that, the declaration was not made with reference to the impugned issue and therefore the Ld. DR’s contention that the said ies in question was factually erroneous. The Ld. AR particularly invited our attention to several decisions rendered by this Tribunal, placed at Pages 185 to 235 of Paper Book, in the context of search in the matters ofM/s. SRS Min Tribunal holding these urged that the order of Ld. CIT(A) did not warrant any interference. 12. Heard both the parties. The issue in dispute relates to addition of receipt of on-monies of Rs.11.50 crores in relation to sale of apartment at a project ‘One Crest Chennai’. The undisputed facts of the case are that, a real estate project, ‘One Crest’ was being developed by M/s Kara Property Ventures LLP. It is noted that three ( booked apartments with the said Developer for which payments were inter alia made through banking channel to M/s Kara Property Ventures LLP. Accordingly, the undisputed fact is that, the apartment in question was being sold by M/s Kara Property Ventures LLP. It is noted that, certain scribblings in pencil were found in a dairy maintained by one of the partners, Mr. Sekar Reddy, regarding payment of Rs.11.50 crores during the relevant year, which according to the Investigati related to payment of on observed that, upon enquiry made from M/s Kara Property Ventures LLP u/s 133(6) of the Act, the said LLP is noted to have acknowledged that these three (3) partners had boo was cancelled and the monies had been refunded. Accordingly, no sale of apartments ever fructified. This fact, we note, has not been disputed by ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 9 :: Paper Book, in the context of noting’s found in loose papers dur the matters ofM/s. SRS Mining Group which were deleted by this Tribunal holding these noting’s to be dumb in nature. He accordingly urged that the order of Ld. CIT(A) did not warrant any interference. Heard both the parties. The issue in dispute relates to addition of monies of Rs.11.50 crores in relation to sale of apartment at a project ‘One Crest Chennai’. The undisputed facts of the case are that, a real estate project, ‘One Crest’ was being developed by M/s Kara Property Ventures LLP. It is noted that three (3) partners of M/s SRS Mining had booked apartments with the said Developer for which payments were made through banking channel to M/s Kara Property Ventures LLP. Accordingly, the undisputed fact is that, the apartment in question d by M/s Kara Property Ventures LLP. It is noted that, certain scribblings in pencil were found in a dairy maintained by one of the partners, Mr. Sekar Reddy, regarding payment of Rs.11.50 crores during the relevant year, which according to the Investigati related to payment of on-monies for the apartment in question. It is observed that, upon enquiry made from M/s Kara Property Ventures LLP u/s 133(6) of the Act, the said LLP is noted to have acknowledged that these three (3) partners had booked flat with them, but the said booking was cancelled and the monies had been refunded. Accordingly, no sale of apartments ever fructified. This fact, we note, has not been disputed by /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal found in loose papers during the ing Group which were deleted by this to be dumb in nature. He accordingly urged that the order of Ld. CIT(A) did not warrant any interference. Heard both the parties. The issue in dispute relates to addition of monies of Rs.11.50 crores in relation to sale of apartment at a project ‘One Crest Chennai’. The undisputed facts of the case are that, a real estate project, ‘One Crest’ was being developed by M/s Kara Property 3) partners of M/s SRS Mining had booked apartments with the said Developer for which payments were made through banking channel to M/s Kara Property Ventures LLP. Accordingly, the undisputed fact is that, the apartment in question d by M/s Kara Property Ventures LLP. It is noted that, certain scribblings in pencil were found in a dairy maintained by one of the partners, Mr. Sekar Reddy, regarding payment of Rs.11.50 crores during the relevant year, which according to the Investigating authorities monies for the apartment in question. It is observed that, upon enquiry made from M/s Kara Property Ventures LLP u/s 133(6) of the Act, the said LLP is noted to have acknowledged that ked flat with them, but the said booking was cancelled and the monies had been refunded. Accordingly, no sale of apartments ever fructified. This fact, we note, has not been disputed by the AO as well. Having regard to these contemporaneous facts, we find that the Ld. CIT(A) had rightly held that, the presumption of payment of on-monies lacked foundation for the reason that, no such apartment was ultimately sold and therefore one cannot infer taxation of on phantom transaction. We thus concur wi CIT(A) on this score itself: “6.7 … In the statement recorded from the partners of M/s SRS Mining, it is evident that even though the partners have admitted about the payment of advance for purchase of flats at One Crest, and the advance amount was returned. Neither the Authorised Officer nor the AO has brought on record whether the property in consideration was actually purchased by them. However the AO in the assessment order has treated sum of Rs.11.50 crores as on the undisclosed income of the appellant u/s 69A of the Act. It is significant to bring on record that when the ultimate purchase of the property was not materialized, the p ‘phantom transaction’ lacks foundation of making the addition. 13. It is also noted that, the apartments in question were being developed by M/s Kara Property Ventures LLP and that the original booking of flats were also between these three (3) partners and M/s Kara Property Ventures LLP. It is also a contemporaneous fact that the initial payment was also received by M/s Kara Property Ventures LLP through banking channel. On these facts, we find merit in the that, legally, any addition on account of purported on only been inferred in the hands of M/s Kara Property Ventures LLP and not the assessee, who was only one of the erstwhile authorized signatories in the said LLP. It is noted that, the assessee also, in his ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 10 :: the AO as well. Having regard to these contemporaneous facts, we find that the Ld. CIT(A) had rightly held that, the presumption of payment of monies lacked foundation for the reason that, no such apartment was ultimately sold and therefore one cannot infer taxation of on phantom transaction. We thus concur with the following findings of Ld. itself: - … In the statement recorded from the partners of M/s SRS Mining, it is evident that even though the partners have admitted about the payment of advance for purchase of flats at One Crest, the transaction was not completed and the advance amount was returned. Neither the Authorised Officer nor the AO has brought on record whether the property in consideration was actually purchased by them. However the AO in the assessment order has treated sum of Rs.11.50 crores as on-money paid to the appellant and brought to tax as the undisclosed income of the appellant u/s 69A of the Act. It is significant to bring on record that when the ultimate purchase of the property was not materialized, the presumption of the AO that on-money paid upon such ‘phantom transaction’ lacks foundation of making the addition. It is also noted that, the apartments in question were being developed by M/s Kara Property Ventures LLP and that the original lats were also between these three (3) partners and M/s Kara Property Ventures LLP. It is also a contemporaneous fact that the initial payment was also received by M/s Kara Property Ventures LLP through banking channel. On these facts, we find merit in the Ld. AR’s argument that, legally, any addition on account of purported on-monies could have only been inferred in the hands of M/s Kara Property Ventures LLP and not the assessee, who was only one of the erstwhile authorized in the said LLP. It is noted that, the assessee also, in his /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal the AO as well. Having regard to these contemporaneous facts, we find that the Ld. CIT(A) had rightly held that, the presumption of payment of monies lacked foundation for the reason that, no such apartment was ultimately sold and therefore one cannot infer taxation of on-monies on a th the following findings of Ld. … In the statement recorded from the partners of M/s SRS Mining, it is evident that even though the partners have admitted about the payment of the transaction was not completed and the advance amount was returned. Neither the Authorised Officer nor the AO has brought on record whether the property in consideration was actually purchased by them. However the AO in the assessment order has treated the money paid to the appellant and brought to tax as the undisclosed income of the appellant u/s 69A of the Act. It is significant to bring on record that when the ultimate purchase of the property was not money paid upon such It is also noted that, the apartments in question were being developed by M/s Kara Property Ventures LLP and that the original lats were also between these three (3) partners and M/s Kara Property Ventures LLP. It is also a contemporaneous fact that the initial payment was also received by M/s Kara Property Ventures LLP through Ld. AR’s argument monies could have only been inferred in the hands of M/s Kara Property Ventures LLP and not the assessee, who was only one of the erstwhile authorized in the said LLP. It is noted that, the assessee also, in his original statement (although retracted later on), if taken at its face value, had stated that the monies were received on behalf of M/s Kara Property Ventures LLP. Accordingly, we are in agreeme the addition made on account of the on assessee was unjustified. For this, we gainfully refer to the following observations made by the Hon’ble Supreme Court in the case of Ch. Atchiah (218 ITR 23 “Under the 1961 Act, the Assessing Officer has no option like the one he had under the 1922 Act. He can, and he must, tax the right person and the right person alone. By 'right person' is meant the person who is liable to be taxed, according to law, with respect to a particular income. 14. We also gainfully refer to the decision of this Tribunal at Hyderabad in the case of JCIT Vs Narayana Reddy Vakati (128 taxmann.com 377). In the decided case also, search was conducted u and several incriminating documents were found which revealed bogus purchases & unexplained expenditure of a company, M/s VNRIL. The assessee who was the Managing Director of the said company and had admitted to the aforesaid undisclosed statement, the AO added the same in hands of the assessee. On appeal the Ld. CIT(A) deleted the addition brought to tax in hands of ‘wrong person’ i.e. the assessee, and ought to have been taxed in the hands of ‘right person’ i.e. ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 11 :: original statement (although retracted later on), if taken at its face value, had stated that the monies were received on behalf of M/s Kara Property Ventures LLP. Accordingly, we are in agreement with the assessee that the addition made on account of the on-monies in the hands of the assessee was unjustified. For this, we gainfully refer to the following observations made by the Hon’ble Supreme Court in the case of Ch. Atchiah (218 ITR 239) wherein it was held as under: Under the 1961 Act, the Assessing Officer has no option like the one he had under the 1922 Act. He can, and he must, tax the right person and the right person alone. By 'right person' is meant the person who is be taxed, according to law, with respect to a particular income. We also gainfully refer to the decision of this Tribunal at Hyderabad JCIT Vs Narayana Reddy Vakati (128 taxmann.com . In the decided case also, search was conducted u/s 132 of the Act and several incriminating documents were found which revealed bogus purchases & unexplained expenditure of a company, M/s VNRIL. The assessee who was the Managing Director of the said company and had admitted to the aforesaid undisclosed payments. Relying on his statement, the AO added the same in hands of the assessee. On appeal the Ld. CIT(A) deleted the addition inter alia on the ground that, it was brought to tax in hands of ‘wrong person’ i.e. the assessee, and ought to d in the hands of ‘right person’ i.e. M/s VNRIL. Upholding /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal original statement (although retracted later on), if taken at its face value, had stated that the monies were received on behalf of M/s Kara Property nt with the assessee that monies in the hands of the assessee was unjustified. For this, we gainfully refer to the following observations made by the Hon’ble Supreme Court in the case of ITO Vs wherein it was held as under:- Under the 1961 Act, the Assessing Officer has no option like the one he had under the 1922 Act. He can, and he must, tax the right person and the right person alone. By 'right person' is meant the person who is be taxed, according to law, with respect to a particular income.” We also gainfully refer to the decision of this Tribunal at Hyderabad JCIT Vs Narayana Reddy Vakati (128 taxmann.com /s 132 of the Act and several incriminating documents were found which revealed bogus purchases & unexplained expenditure of a company, M/s VNRIL. The assessee who was the Managing Director of the said company and had payments. Relying on his statement, the AO added the same in hands of the assessee. On appeal on the ground that, it was brought to tax in hands of ‘wrong person’ i.e. the assessee, and ought to VNRIL. Upholding the order of the Ld. CIT(A), this Tribunal is noted to have observed as follows:- “5. The Revenue vehemently contended during the course of hearing that the CIT(A) ought to have affirmed both the hands as per the Assessing Officer's stand. We make it clear that there is not even an indication in the Revenue's grounds that the impugned additions pertain to the assessee himself than his company M/s. VNR Infrastruc Hon'ble apex court's landmark decision in ITO v. C H Atchaiah [1996] 84 Taxman 630/218 ITR 239 (SC) held long back that the Assessing Officer can and he must, tax the right person and the right person alone. By 'right person' it is meant the person who is liable to be taxed according to law with respect to a particular income. By the connotation of 'right person', it is meant the person who is liable to be taxed, according to law, with respect to a particular income. And that the expression 'w expression 'right person' only. We observe that this assessee is the 'Managing Director' of M/s. VNR Infrastructure Limited. And that it is this latter entity which the fact is engaged in all the busin separately throughout. There is yet another landmark decision Saloman v. Saloman and Co. Ltd. [1897] AC 22 hold long back in corporate parlance that a company is very a body corporate and a distinct entity apart from 6. We conclude in these circumstances that the CIT(A) has rightly deleted these twin additions in the assessee/individual's hands since corresponding undisclosed and unaccounted income pertains to its company M/s. VNR Infrastructure Limited clear while holding so that the Revenue has not even indicated the fact above the company's assessment qua the very income(s). We thus see no reason to reverse the CIT(A) detailed findings for these pre 15. For the above reasons therefore, we accordingly hold that, the impugned addition made in the hands of the assessee was legally unsustainable. 16. Now we come to Revenue’s reliance on the scribblings found on a loose paper in third party recorded u/s 132(4) of the Act affirming the sheet to be pertaining to him. Before adverting to the contents of the ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 12 :: the order of the Ld. CIT(A), this Tribunal is noted to have observed as 5. The Revenue vehemently contended during the course of hearing that the CIT(A) ought to have affirmed both the impugned additions in the assessee's hands as per the Assessing Officer's stand. We make it clear that there is not even an indication in the Revenue's grounds that the impugned additions pertain to the assessee himself than his company M/s. VNR Infrastruc Hon'ble apex court's landmark decision in ITO v. C H Atchaiah [1996] 84 Taxman 630/218 ITR 239 (SC) held long back that the Assessing Officer can and he must, tax the right person and the right person alone. By 'right person' it is person who is liable to be taxed according to law with respect to a particular income. By the connotation of 'right person', it is meant the person who is liable to be taxed, according to law, with respect to a particular income. And that the expression 'wrong person' is obviously used as an antithesis of the expression 'right person' only. We observe that this assessee is the 'Managing Director' of M/s. VNR Infrastructure Limited. And that it is this latter entity which the fact is engaged in all the business activity(ies) and has been assessed separately throughout. There is yet another landmark decision Saloman v. Saloman and Co. Ltd. [1897] AC 22 hold long back in corporate parlance that a company is very a body corporate and a distinct entity apart from 6. We conclude in these circumstances that the CIT(A) has rightly deleted these twin additions in the assessee/individual's hands since corresponding undisclosed and unaccounted income pertains to its company M/s. VNR Infrastructure Limited carrying out the business in its own name. We make it clear while holding so that the Revenue has not even indicated the fact above the company's assessment qua the very income(s). We thus see no reason to reverse the CIT(A) detailed findings for these precise reasons.” For the above reasons therefore, we accordingly hold that, the impugned addition made in the hands of the assessee was legally Now we come to Revenue’s reliance on the scribblings found on a loose paper in third party premises and the statement of the assessee recorded u/s 132(4) of the Act affirming the noting’s on the said loose sheet to be pertaining to him. Before adverting to the contents of the /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal the order of the Ld. CIT(A), this Tribunal is noted to have observed as 5. The Revenue vehemently contended during the course of hearing that the impugned additions in the assessee's hands as per the Assessing Officer's stand. We make it clear that there is not even an indication in the Revenue's grounds that the impugned additions pertain to the assessee himself than his company M/s. VNR Infrastructure Limited. Hon'ble apex court's landmark decision in ITO v. C H Atchaiah [1996] 84 Taxman 630/218 ITR 239 (SC) held long back that the Assessing Officer can and he must, tax the right person and the right person alone. By 'right person' it is person who is liable to be taxed according to law with respect to a particular income. By the connotation of 'right person', it is meant the person who is liable to be taxed, according to law, with respect to a particular income. rong person' is obviously used as an antithesis of the expression 'right person' only. We observe that this assessee is the 'Managing Director' of M/s. VNR Infrastructure Limited. And that it is this latter entity which ess activity(ies) and has been assessed separately throughout. There is yet another landmark decision Saloman v. Saloman and Co. Ltd. [1897] AC 22 hold long back in corporate parlance that a its Director. 6. We conclude in these circumstances that the CIT(A) has rightly deleted these twin additions in the assessee/individual's hands since corresponding undisclosed and unaccounted income pertains to its company M/s. VNR carrying out the business in its own name. We make it clear while holding so that the Revenue has not even indicated the fact above the company's assessment qua the very income(s). We thus see no reason to For the above reasons therefore, we accordingly hold that, the impugned addition made in the hands of the assessee was legally Now we come to Revenue’s reliance on the scribblings found on a premises and the statement of the assessee on the said loose sheet to be pertaining to him. Before adverting to the contents of the noting’s, which forms basis of the impugned addition, it is necessary keep in mind that the presumption u/s 132(4A) of the Act regarding the contents of seized material is only against the searched person and not to any other third party, which is the assessee in the present case. Reason being that, if any noting’s premises is presumed to any person for that matter can mention paper/diary at their sweet will and that can be used to other person for no fault of the latter. diary or notebook by a third person with scant details fasten tax liability on the person whose name appears therein, in the absence of corroborative evidence of the Hon’ble Supreme Court in the case of [1998] 3 SCC 410 and Union of India (394 ITR 220) now advert to the noting’s of M/s SRS Mining. It is observed that, the assessee had explained before the AO that, he was only shown a diary found from the premises of one Mr. Sekar Reddy wherein there were certain pencil entries noting hi name against certain cash payments, but there was no acknowledgment on that sheet against the amounts by the assessee. According to him therefore, such stray notings could not be treated as corroborative ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 13 :: , which forms basis of the impugned addition, it is necessary keep in mind that the presumption u/s 132(4A) of the Act regarding the contents of seized material is only against the searched person and not to any other third party, which is the assessee in the present case. Reason noting’s found in the seized material premises is presumed to pertain to the assessee, at its face value, then any person for that matter can mention anyone’s name in any loose paper/diary at their sweet will and that can be used to person for no fault of the latter. Accordingly, an entry made in a diary or notebook by a third person with scant details cannot fasten tax liability on the person whose name appears therein, in the absence of corroborative evidence. Our view finds support in the decisions Hon’ble Supreme Court in the case of C.B.I. v. V.C. Shukla and Common Cause (A Registered Society) Vs Union of India (394 ITR 220). Having regard to this position of law, we noting’s found in the material seized from the premises of M/s SRS Mining. It is observed that, the assessee had explained before the AO that, he was only shown a diary found from the premises of one Mr. Sekar Reddy wherein there were certain pencil entries noting hi name against certain cash payments, but there was no acknowledgment on that sheet against the amounts by the assessee. According to him therefore, such stray notings could not be treated as corroborative /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal , which forms basis of the impugned addition, it is necessary to keep in mind that the presumption u/s 132(4A) of the Act regarding the contents of seized material is only against the searched person and not to any other third party, which is the assessee in the present case. Reason in the seized material at third party pertain to the assessee, at its face value, then anyone’s name in any loose implicate such an entry made in a cannot be used to fasten tax liability on the person whose name appears therein, in the nds support in the decisions C.B.I. v. V.C. Shukla Common Cause (A Registered Society) Vs . Having regard to this position of law, we und in the material seized from the premises of M/s SRS Mining. It is observed that, the assessee had explained before the AO that, he was only shown a diary found from the premises of one Mr. Sekar Reddy wherein there were certain pencil entries noting his name against certain cash payments, but there was no acknowledgment on that sheet against the amounts by the assessee. According to him therefore, such stray notings could not be treated as corroborative evidence to infer undisclosed income in the hands AO is noted to have acknowledged this objection of the assessee, but had not specifically controverted the same but rejected it as an after We find that, the Ld. CIT(A) had examined the said found the same to be dumb in nature, by holding as under: “6.8 The next issue arising out of the addition is that the evidence relied upon by the AO seized from the third party premise lacks evidentiary value. The Appellant in the submission before the AO has made a su the relevant portion of the submission as brought out by the AO in the assessment order is reproduced as under : \"I remember that the documents with reference to which the question No. 17 was put to me was a diary found at the bus Sekar Reddy. It would appear that there were certain pencil entries noting cash payment against my name. There is no indication in the said document to show that I had acknowledged the receipt of those amount.\" 6.9It may be observed the above submission of the Appellant, It is only the pencil entries in the seized notebook wherein certain cash payments have been noted against the Appellant. Further in the seized material relied upo that the-Appellant had acknowledged the receipt of this amount. Further in the same submission, the Appellant had claimed the following : \" It is on record that my residential house was searched over a period of forty hours by the search team. In the course of such a marathon search at my residence, absolutely no incriminating materials were found indicating that I had received the amount of Rs. 11.50 Crores.” 6.10 The AO in the assessment order has not made any find submission. The AO in the assessment order has treated the statement recorded u/s 132(4) of the Act as a sacrosanct and conclusively arrived at a conclusion that the Appellant has received an amount of Rs. 11.50 Crores from the partners of M/s. SRS Mining for the purchase of Flat from the project \"One Crest\" at Nungambakkam, Chennai. 6.11 In the instant case at hand the aforesaid seized material as relied upon by AO was seized from the premises of a third search conducted in the case of the said third material was neither seized from the premises ofthe Appellant nor was the same found to be in the handwriting of the Appellant and therefore the same would not constitute adequate ev Appellant, in the absence of any other corroborative evidence. The proposition ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 14 :: evidence to infer undisclosed income in the hands of the assessee. The AO is noted to have acknowledged this objection of the assessee, but had not specifically controverted the same but rejected it as an after We find that, the Ld. CIT(A) had examined the said noting’s to be dumb in nature, by holding as under: The next issue arising out of the addition is that the evidence relied upon by the AO seized from the third party premise lacks evidentiary value. The Appellant in the submission before the AO has made a submission in this regard, the relevant portion of the submission as brought out by the AO in the assessment order is reproduced as under :- \"I remember that the documents with reference to which the question No. 17 was put to me was a diary found at the business premises of Shri. Sekar Reddy. It would appear that there were certain pencil entries noting cash payment against my name. There is no indication in the said document to show that I had acknowledged the receipt of those amount.\" 6.9It may be observed that the AO has not made any adverse finding against the above submission of the Appellant, It is only the pencil entries in the seized notebook wherein certain cash payments have been noted against the Appellant. Further in the seized material relied upon by the AO, there exists no indication Appellant had acknowledged the receipt of this amount. Further in the same submission, the Appellant had claimed the following :- \" It is on record that my residential house was searched over a period of ty hours by the search team. In the course of such a marathon search at my residence, absolutely no incriminating materials were found indicating that I had received the amount of Rs. 11.50 Crores.” 6.10 The AO in the assessment order has not made any findings upon the above submission. The AO in the assessment order has treated the statement recorded u/s 132(4) of the Act as a sacrosanct and conclusively arrived at a conclusion that the Appellant has received an amount of Rs. 11.50 Crores from the partners of M/s. SRS Mining for the purchase of Flat from the project \"One Crest\" at Nungambakkam, Chennai. In the instant case at hand the aforesaid seized material as relied upon by AO was seized from the premises of a third-party during the course of h conducted in the case of the said third-party (M/s SRS Mining) The said material was neither seized from the premises ofthe Appellant nor was the same found to be in the handwriting of the Appellant and therefore the same would not constitute adequate evidence to draw any adverse inference against the Appellant, in the absence of any other corroborative evidence. The proposition /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal of the assessee. The AO is noted to have acknowledged this objection of the assessee, but had not specifically controverted the same but rejected it as an after-thought. noting’s and rightly to be dumb in nature, by holding as under:- The next issue arising out of the addition is that the evidence relied upon by the AO seized from the third party premise lacks evidentiary value. The bmission in this regard, the relevant portion of the submission as brought out by the AO in the \"I remember that the documents with reference to which the question No. iness premises of Shri. Sekar Reddy. It would appear that there were certain pencil entries noting cash payment against my name. There is no indication in the said document to show that I had acknowledged the receipt of those amount.\" that the AO has not made any adverse finding against the above submission of the Appellant, It is only the pencil entries in the seized notebook wherein certain cash payments have been noted against the Appellant. n by the AO, there exists no indication Appellant had acknowledged the receipt of this amount. Further in the \" It is on record that my residential house was searched over a period of ty hours by the search team. In the course of such a marathon search at my residence, absolutely no incriminating materials were found indicating that I had received the amount of Rs. 11.50 Crores.” ings upon the above submission. The AO in the assessment order has treated the statement recorded u/s 132(4) of the Act as a sacrosanct and conclusively arrived at a conclusion that the Appellant has received an amount of Rs. 11.50 Crores from the partners of M/s. SRS Mining for the purchase of Flat from the project \"One Crest\" at In the instant case at hand the aforesaid seized material as relied party during the course of party (M/s SRS Mining) The said material was neither seized from the premises ofthe Appellant nor was the same found to be in the handwriting of the Appellant and therefore the same would idence to draw any adverse inference against the Appellant, in the absence of any other corroborative evidence. The proposition laid down by Hon'ble Delhi High Court in the case of CITvs. Sant Lal (118,Taxmann.com 432) is that when a diary is seized in sea ofa thirdparty allegedly 23 containing entries ofhundi transactions on behalf of various parties including the assessee, no addition could be made based on the said entries sincethe diary was neither found from the premises of assessee was it in handwriting of assessee and revenue tallied toproduce any other cogent material to link the assessee to the diary. The ratio of the said decision is squarely applicable to the case of the Appellant since the AO had not referred to any cogent material to corroborate the entries made in the material seized from a third-party, which were purportedly the transactions made by the said third party with the Appellant. 6.12At this juncture, it is pertinent to rely upon the decision of Jabalpur Bench o Tribunal in the case of ACIT vs Satyapal Wassan [TS (Jabalpur)-0] and the decision rendered by the Hon'ble Mumbai Tribunal in the case of Riveria Properties Pvt. Ltd. Vs ITO (ITA No,250/Mum/2013) where in it was held that the AO was requir that the money was actually exchanged between the pailies in case where there was no other evidence on record to prove that on loose sheets found in the third-party. Also, the Hon’ble Supreme Court in the case of Common Cause vs. UOl held as under:- We are constrained to observe that the Court has to be on guard while ordering investigation against any important constitutional functionar person in the absence of some cogent legally cognizable material. When the material on the basis of which investigation is sought is itself irrelevant to constitute evidence and not admissible in evidence, we have apprehension whether it would be safe to even initiate investigation. In case we do so, the investigation can be ordered as against any person whosoever high in integrity on the basis of irrelevant or inadmissible entry falsely made, by any unscrupulous person or business house account but on random papers at any given point of time. There has to be some relevant and admissible evidence and some cogent reason, which is prima facie reliable and that too, supported by some other circumstances p the particular third person against whom the allegations have been levelled was in fact involved in the matter or he has done some act during that period, which may have co-relations with the random entries. In case we do not insist for al these, the process of law can be abused against all and sundry very easily to achieve ulterior goals and then no democracy can survive in case investigations are lightly set in motion against important constitutional functionaries on the basis of fictitious entries, in absence of cogent and admissible material on record, lest liberty of an individual be compromised unnecessarily. decision of Hon’ble Supreme Court stresses the need for exercising for bringing on record relevant, r entries found in loose and notebooks regarding the payments allegedly made to important constitutional functionaries so that the process of law is not abused by unscrupulous persons in order to achieve ulterio important that the corroborative evidence should be available on record in support of the entries made in the seized material found in the premises of third-party. ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 15 :: laid down by Hon'ble Delhi High Court in the case of CITvs. Sant Lal (118,Taxmann.com 432) is that when a diary is seized in search of the premises ofa thirdparty allegedly 23 containing entries ofhundi transactions on behalf of various parties including the assessee, no addition could be made based on the said entries sincethe diary was neither found from the premises of assessee was it in handwriting of assessee and revenue tallied toproduce any other cogent material to link the assessee to the diary. The ratio of the said decision is squarely applicable to the case of the Appellant since the AO had not referred to material to corroborate the entries made in the material seized from party, which were purportedly the transactions made by the said third party with the Appellant. 6.12At this juncture, it is pertinent to rely upon the decision of Jabalpur Bench o Tribunal in the case of ACIT vs Satyapal Wassan [TS-5104 0] and the decision rendered by the Hon'ble Mumbai Tribunal in the case of Riveria Properties Pvt. Ltd. Vs ITO (ITA No,250/Mum/2013) where in it was held that the AO was required to bring further evidence on record to show that the money was actually exchanged between the pailies in case where there was no other evidence on record to prove that on-money was paid except the loose sheets found in the premise of third-party and admission made by the party. Also, the Hon’ble Supreme Court in the case of Common Cause vs. - We are constrained to observe that the Court has to be on guard while ordering investigation against any important constitutional functionary, officers or any person in the absence of some cogent legally cognizable material. When the material on the basis of which investigation is sought is itself irrelevant to constitute evidence and not admissible in evidence, we have apprehension would be safe to even initiate investigation. In case we do so, the investigation can be ordered as against any person whosoever high in integrity on the basis of irrelevant or inadmissible entry falsely made, by any unscrupulous person or business house that too not kept in regular books of account but on random papers at any given point of time. There has to be some relevant and admissible evidence and some cogent reason, which is prima facie reliable and that too, supported by some other circumstances pointing out that the particular third person against whom the allegations have been levelled was in fact involved in the matter or he has done some act during that period, which relations with the random entries. In case we do not insist for al these, the process of law can be abused against all and sundry very easily to achieve ulterior goals and then no democracy can survive in case investigations are lightly set in motion against important constitutional functionaries on the ous entries, in absence of cogent and admissible material on record, lest liberty of an individual be compromised unnecessarily. decision of Hon’ble Supreme Court stresses the need for exercising for bringing on record relevant, reliable and cogent evidence to corroborate the entries found in loose and notebooks regarding the payments allegedly made to important constitutional functionaries so that the process of law is not abused by unscrupulous persons in order to achieve ulterior goals. Therefore, it is important that the corroborative evidence should be available on record in support of the entries made in the seized material found in the premises of /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal laid down by Hon'ble Delhi High Court in the case of CITvs. Sant Lal rch of the premises ofa thirdparty allegedly 23 containing entries ofhundi transactions on behalf of various parties including the assessee, no addition could be made based on the said entries sincethe diary was neither found from the premises of assessee nor was it in handwriting of assessee and revenue tallied toproduce any other cogent material to link the assessee to the diary. The ratio of the said decision is squarely applicable to the case of the Appellant since the AO had not referred to material to corroborate the entries made in the material seized from party, which were purportedly the transactions made by the said third- 6.12At this juncture, it is pertinent to rely upon the decision of Jabalpur Bench of 5104-ITAT-2007 0] and the decision rendered by the Hon'ble Mumbai Tribunal in the case of Riveria Properties Pvt. Ltd. Vs ITO (ITA No,250/Mum/2013) where in it ed to bring further evidence on record to show that the money was actually exchanged between the pailies in case where there money was paid except the ission made by the party. Also, the Hon’ble Supreme Court in the case of Common Cause vs. We are constrained to observe that the Court has to be on guard while ordering y, officers or any person in the absence of some cogent legally cognizable material. When the material on the basis of which investigation is sought is itself irrelevant to constitute evidence and not admissible in evidence, we have apprehension would be safe to even initiate investigation. In case we do so, the investigation can be ordered as against any person whosoever high in integrity on the basis of irrelevant or inadmissible entry falsely made, by any that too not kept in regular books of account but on random papers at any given point of time. There has to be some relevant and admissible evidence and some cogent reason, which is prima facie ointing out that the particular third person against whom the allegations have been levelled was in fact involved in the matter or he has done some act during that period, which relations with the random entries. In case we do not insist for all these, the process of law can be abused against all and sundry very easily to achieve ulterior goals and then no democracy can survive in case investigations are lightly set in motion against important constitutional functionaries on the ous entries, in absence of cogent and admissible material on record, lest liberty of an individual be compromised unnecessarily. The aforesaid decision of Hon’ble Supreme Court stresses the need for exercising caution and eliable and cogent evidence to corroborate the entries found in loose and notebooks regarding the payments allegedly made to important constitutional functionaries so that the process of law is not abused by goals. Therefore, it is important that the corroborative evidence should be available on record in support of the entries made in the seized material found in the premises of 6.13 It is brought on record that the said seized material as used Appellant did not contain complete information to facilitate drawing of such an inference. There was absolutely no mention in the seized material regarding the nature of the said transactions of cash payments, the purpose of such payments and the precise identity of the recipient. In the absence of such essential and critical information, it could not be Inferred that the payments were made to the Appellant and that the said amounts represent the income of the Appellant. It could also not be in payments were made to Appellant. An entry made in a diary or notebook by a third person with scant details Appellant, in the absence of any to Appellant. Such seized materials liable to be treated as as ‘dumb document’, which would not have any evidentiary therein, unless corroborative evidence is available which can provide reliable basis for deciphering the nature and character of the said entries. Another fact was that the Appellant did not acknowledge receipt of any such payment by way of appending his signature / initial against the said payments. If a third party unilaterally makes entries in a diary/note book showing payments to a person to suit his convenience, the payments could not be inferred to have been made to the said person unless there is corroborative evidence to establish the actual making of payme was no reference to such corroborative evidence in the assessment order. 6.14 When the assessee denied having any transaction with the group, he cannot be expected to discharge a reverse burden as per the legal principles laid down by Hon'ble Supreme Court in the case of K.P. Varghese vs. ITO (131 TR 597) holding that the onus of establishing that the conditions of taxability are fulfilled would be on revenue and throwing this burden on the assessee would be to cast an almost i Therefore, the AO was not correct in stating that the assessee failed to furnish any evidence to that he did not have any financial transactions with M/s SRS Mining. The burden was on revenue to establis of payments as noted in the seized material. The AO in the present case has not discharged his burden in proving that the Appellant was actually in receipt of the amount of Rs. 11.50Crores. Further, as per settled legal p could be made unless there is corroborative evidence to validate the entries foundin the material seized from a third 17. We particularly find the reliance placed by the Ld. CIT(A) in support of his above findings on the deci the case of CIT v. Sant Lal (423 ITR 1) the Department relied upon the the premises of third party. The said of hundi transactions on behalf of parties including assessee whose names ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 16 :: 6.13 It is brought on record that the said seized material as used Appellant did not contain complete information to facilitate drawing of such an inference. There was absolutely no mention in the seized material regarding the nature of the said transactions of cash payments, the purpose of such payments the precise identity of the recipient. In the absence of such essential and critical information, it could not be Inferred that the payments were made to the Appellant and that the said amounts represent the income of the Appellant. It could also not be inferred with a reasonable degree of certainty that the payments were made to Appellant. An entry made in a diary or notebook by a third person with scant details cannot be used to fasten tax liability on the Appellant, in the absence of any corroborative evidence to attribute the entries to Appellant. Such seized materials liable to be treated as as ‘dumb document’, which would not have any evidentiary value in respect of the entries found therein, unless corroborative evidence is available which can provide reliable basis for deciphering the nature and character of the said entries. Another fact was that the Appellant did not acknowledge receipt of any such payment by way of appending his signature / initial against the said payments. rty unilaterally makes entries in a diary/note book showing payments to a person to suit his convenience, the payments could not be inferred to have been made to the said person unless there is corroborative evidence to establish the actual making of payments to the said person. was no reference to such corroborative evidence in the assessment order. 6.14 When the assessee denied having any transaction with the group, he cannot be expected to discharge a reverse burden as per the legal principles laid down by Hon'ble Supreme Court in the case of K.P. Varghese vs. ITO (131 TR 597) holding that the onus of establishing that the conditions of taxability are fulfilled would be on revenue and throwing this burden on the assessee would be to cast an almost impossible burden upon him to establish the negative. Therefore, the AO was not correct in stating that the assessee failed to furnish any evidence to that he did not have any financial transactions with M/s SRS Mining. The burden was on revenue to establish that the assessee/was in receipt of payments as noted in the seized material. The AO in the present case has not discharged his burden in proving that the Appellant was actually in receipt of the amount of Rs. 11.50Crores. Further, as per settled legal precedents, no addition could be made unless there is corroborative evidence to validate the entries foundin the material seized from a third-party.” We particularly find the reliance placed by the Ld. CIT(A) in support of his above findings on the decision of the Hon’ble Delhi High Court in CIT v. Sant Lal (423 ITR 1) to be of relevance. epartment relied upon the noting’s of hundi in the diary seized from the premises of third party. The said noting’s allegedly contained e of hundi transactions on behalf of parties including assessee whose names /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal 6.13 It is brought on record that the said seized material as used against the Appellant did not contain complete information to facilitate drawing of such an inference. There was absolutely no mention in the seized material regarding the nature of the said transactions of cash payments, the purpose of such payments the precise identity of the recipient. In the absence of such essential and critical information, it could not be Inferred that the payments were made to the Appellant and that the said amounts represent the income of the Appellant. It ferred with a reasonable degree of certainty that the payments were made to Appellant. An entry made in a diary or notebook by a cannot be used to fasten tax liability on the idence to attribute the entries to Appellant. Such seized materials liable to be treated as as ‘dumb document’, value in respect of the entries found therein, unless corroborative evidence is available which can provide necessary reliable basis for deciphering the nature and character of the said entries. Another fact was that the Appellant did not acknowledge receipt of any such payment by way of appending his signature / initial against the said payments. rty unilaterally makes entries in a diary/note book showing payments to a person to suit his convenience, the payments could not be inferred to have been made to the said person unless there is corroborative nts to the said person. There was no reference to such corroborative evidence in the assessment order. 6.14 When the assessee denied having any transaction with the group, he cannot be expected to discharge a reverse burden as per the legal principles laid down by Hon'ble Supreme Court in the case of K.P. Varghese vs. ITO (131 TR 597) holding that the onus of establishing that the conditions of taxability are fulfilled would be on revenue and throwing this burden on the assessee would be mpossible burden upon him to establish the negative. Therefore, the AO was not correct in stating that the assessee failed to furnish any evidence to that he did not have any financial transactions with M/s SRS h that the assessee/was in receipt of payments as noted in the seized material. The AO in the present case has not discharged his burden in proving that the Appellant was actually in receipt of the recedents, no addition could be made unless there is corroborative evidence to validate the entries We particularly find the reliance placed by the Ld. CIT(A) in support sion of the Hon’ble Delhi High Court in relevance. In this case, of hundi in the diary seized from allegedly contained entries of hundi transactions on behalf of parties including assessee whose names were written in abbreviated/code words. The Hon'ble Delhi High Court relying on its earlier decision in the case of Gupta in ITA No. 814 of 2015 dated 20 held that no addition can be made in the hands of an basis of any diary seized during the course of search proceedings of a third party, since such diary was neither found at the assessee’s premise and that the department had failed to provide any cogent material or gather any corroborative assessee. The Court observed that the written anyone’s name on his own sweet will in his diary such noting on stand-alone basis along with the biased statement of the searched person cannot be used as assessee. 18. We also gainfully refer to the decision of Tribunal, Ahmedabad in the case of v. ITO (128 TTJ 36). seized material and statement of third party without bringing any other evidence on record. The Tribunal deleted the addition. The r portion of the order of Tribunal is as under \"Held that no evidence could be brought on record by the Revenue to show that in fact the assessee had paid 'on money' to the developers. No document containing signature of the assessee or handwriti corroborate the above making of payment by the assessee was found during the course of the search. Merely recording made by a third party or statement of a ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 17 :: were written in abbreviated/code words. The Hon'ble Delhi High Court relying on its earlier decision in the case of CIT v. Mahabir Prasad Gupta in ITA No. 814 of 2015 dated 20-10-2015 is noted to have no addition can be made in the hands of an assessee on the basis of any diary seized during the course of search proceedings of a hird party, since such diary was neither found at the assessee’s premise artment had failed to provide any cogent material or gather any corroborative evidence to substantiate that it pertained to the assessee. The Court observed that the searched person could have written anyone’s name on his own sweet will in his diary alone basis along with the biased statement of the searched person cannot be used as reliable evidence We also gainfully refer to the decision of coordinate bench of this , Ahmedabad in the case of Jawaharbhai Atmaram Hathiwala . In this case, addition was made by relying on seized material and statement of third party without bringing any other evidence on record. The Tribunal deleted the addition. The r portion of the order of Tribunal is as under :- \"Held that no evidence could be brought on record by the Revenue to show that in fact the assessee had paid 'on money' to the developers. No document containing signature of the assessee or handwriting of the assessee to corroborate the above making of payment by the assessee was found during the course of the search. Merely recording made by a third party or statement of a /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal were written in abbreviated/code words. The Hon'ble Delhi High Court CIT v. Mahabir Prasad is noted to have assessee on the basis of any diary seized during the course of search proceedings of a hird party, since such diary was neither found at the assessee’s premise artment had failed to provide any cogent material or evidence to substantiate that it pertained to the searched person could have written anyone’s name on his own sweet will in his diary and therefore alone basis along with the biased statement of the reliable evidence against the coordinate bench of this Jawaharbhai Atmaram Hathiwala In this case, addition was made by relying on seized material and statement of third party without bringing any other evidence on record. The Tribunal deleted the addition. The relevant \"Held that no evidence could be brought on record by the Revenue to show that in fact the assessee had paid 'on money' to the developers. No document ng of the assessee to corroborate the above making of payment by the assessee was found during the course of the search. Merely recording made by a third party or statement of a third party could not be treated as so sacrosanct so as to read as a positive material against the assessee. Therefore, addition in the hands of the assessee on account of 'on-money' was not justified\" 19. According to us therefore, the stray third party premises cannot be unilaterally used to make addi hands of the assessee, and that the onus is on the Revenue to establish the veracity of the same with corroborative evidence by bringing cogent material on record to back the same, which we find the Revenue has failed to do so, in the present case. inferred to relate to on- dispute that, the sale of flats did not fructify and therefore, inference of receipt of on-monies was not tenable. Further, the statement of the assessee recorded u/s 132(4) of the Act, which has been heavily relied upon by the Ld. DR, is found to have been retracted by him. The Ld. AR has rightly shown that the question put to the assessee and his answer does not appear to inspire confidence that without any influence or pressure. No prudent person would admit to income of Rs.3.3 crores, when shown document/noting of Rs. 2 Further, we also note that, the assessee had stood by his retraction and also withstood cross-examination by the AO when summoned u/s 131 of the Act on 26.12.2018. We therefore also note that, the original statement of the assessee, having been validly retracted, is not evidence, in the present matter. It is also noted that, there was no ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 18 :: third party could not be treated as so sacrosanct so as to read as a positive material against the assessee. Therefore, addition in the hands of the assessee money' was not justified\" According to us therefore, the stray noting’s found in papers from third party premises cannot be unilaterally used to make addi hands of the assessee, and that the onus is on the Revenue to establish the veracity of the same with corroborative evidence by bringing cogent material on record to back the same, which we find the Revenue has failed to do so, in the present case. As noted above, these notings were -money payments for purchase of flats. It is not in dispute that, the sale of flats did not fructify and therefore, inference of monies was not tenable. Further, the statement of the assessee recorded u/s 132(4) of the Act, which has been heavily relied upon by the Ld. DR, is found to have been retracted by him. The Ld. AR has rightly shown that the question put to the assessee and his answer does not appear to inspire confidence that the statement was taken without any influence or pressure. No prudent person would admit to income of Rs.3.3 crores, when shown document/noting of Rs. 2 Further, we also note that, the assessee had stood by his retraction and examination by the AO when summoned u/s 131 of the Act on 26.12.2018. We therefore also note that, the original statement of the assessee, having been validly retracted, is not , in the present matter. It is also noted that, there was no /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal third party could not be treated as so sacrosanct so as to read as a positive material against the assessee. Therefore, addition in the hands of the assessee found in papers from third party premises cannot be unilaterally used to make addition in hands of the assessee, and that the onus is on the Revenue to establish the veracity of the same with corroborative evidence by bringing cogent material on record to back the same, which we find the Revenue has As noted above, these notings were money payments for purchase of flats. It is not in dispute that, the sale of flats did not fructify and therefore, inference of monies was not tenable. Further, the statement of the assessee recorded u/s 132(4) of the Act, which has been heavily relied upon by the Ld. DR, is found to have been retracted by him. The Ld. AR has rightly shown that the question put to the assessee and his answer the statement was taken without any influence or pressure. No prudent person would admit to income of Rs.3.3 crores, when shown document/noting of Rs. 2 crores. Further, we also note that, the assessee had stood by his retraction and examination by the AO when summoned u/s 131 of the Act on 26.12.2018. We therefore also note that, the original statement of the assessee, having been validly retracted, is not reliable , in the present matter. It is also noted that, there was no incriminating material found from the premises of the assessee which would in any manner corroborate the inference drawn by the AO on the basis of noting’s found in the third party premises. are in agreement with the Ld. CIT(A) that t material seized from premises of M/s SRS Mining was in the nature of ‘dumb document’ and that the AO was unable to discharge his onus of proving that the assessee had indeed received Rs.11.50 crores by way of undisclosed monies. 20. As far as the Revenue’s reliance on assessee’s declaration under PMGKY Scheme, we find the same to be of no relevance as there is no iota of evidence to show that the declaration made by the assessee was in relation to the impugned issue. 21. We, instead, find the reliance placed by the assessee on the decision in the case of 582/Chny/2023 dated 05.04.2024 facts of the present case. In the decided case also, the AO had made additions based on noting’s M/s SRS Mining, which was deleted by Ld. CIT(A) and the aforesaid appellate order was upheld by this Tribunal, by holding as under: “14. So far as the merits of quantum addition is CIT(A) have been enumerated by us in detail in preceding paragraphs. The Ld. CIT(A), upon perusal of the relevant entries in the seized material, concurred that the name of the assessee did not appear in any of the entries so ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 19 :: ncriminating material found from the premises of the assessee which would in any manner corroborate the inference drawn by the AO on the found in the third party premises. Overall, are in agreement with the Ld. CIT(A) that the stray noting’s material seized from premises of M/s SRS Mining was in the nature of ‘dumb document’ and that the AO was unable to discharge his onus of proving that the assessee had indeed received Rs.11.50 crores by way of As far as the Revenue’s reliance on assessee’s declaration under PMGKY Scheme, we find the same to be of no relevance as there is no iota of evidence to show that the declaration made by the assessee was in relation to the impugned issue. instead, find the reliance placed by the assessee on the decision in the case of DCIT Vs O Pannerselvam in ITA Nos. 581 & 582/Chny/2023 dated 05.04.2024 to be squarely applicable to the facts of the present case. In the decided case also, the AO had made noting’s found in papers seized from the premises of M/s SRS Mining, which was deleted by Ld. CIT(A) and the aforesaid appellate order was upheld by this Tribunal, by holding as under: “14. So far as the merits of quantum addition is concerned, the findings of Ld. CIT(A) have been enumerated by us in detail in preceding paragraphs. The Ld. CIT(A), upon perusal of the relevant entries in the seized material, concurred that the name of the assessee did not appear in any of the entries so /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal ncriminating material found from the premises of the assessee which would in any manner corroborate the inference drawn by the AO on the Overall, therefore, we noting’s found in the material seized from premises of M/s SRS Mining was in the nature of ‘dumb document’ and that the AO was unable to discharge his onus of proving that the assessee had indeed received Rs.11.50 crores by way of As far as the Revenue’s reliance on assessee’s declaration under PMGKY Scheme, we find the same to be of no relevance as there is no iota of evidence to show that the declaration made by the assessee was in instead, find the reliance placed by the assessee on the DCIT Vs O Pannerselvam in ITA Nos. 581 & to be squarely applicable to the facts of the present case. In the decided case also, the AO had made found in papers seized from the premises of M/s SRS Mining, which was deleted by Ld. CIT(A) and the aforesaid appellate order was upheld by this Tribunal, by holding as under:- concerned, the findings of Ld. CIT(A) have been enumerated by us in detail in preceding paragraphs. The Ld. CIT(A), upon perusal of the relevant entries in the seized material, concurred that the name of the assessee did not appear in any of the entries so considered by Ld. AO to be pertaining to the assessee. All the entries so considered by AO merely contain an abbreviation viz. 'OPS Ramesh'. The Ld. AO relied on the statement of Shri K. Srinivasulu u/s 132(4) dated 10.12.2016 to conclude that the said name of 'OPS Ramesh', in the seized material, refers to the assessee. Shri K. Srinivasulu explained in his statement that the name 'OPS Ramesh' in the seized material was used to denote 'PA to OPS' and since the assessee was popularly referred to in the medi AO drew inference that the payments noted in the seized material with the name 'OPS Ramesh' represent the payments made to the assessee. However, as rightly noted by Ld. CIT(A), there was no mention anywher Shri K. Srinivasulu that the assessee was the actual recipient of the payments shown against the said name of 'OPS Ramesh'. Shri K.Srinivasulu did not state anywhere in his statement that the acronym 'OPS' was used in the seized material to denote the assessee. Further, the seized material did not contain any evidence to draw the inference that the payments noted with the name 'OPS Ramesh' actually represented amounts received by the assessee. Therefore, it was to be held that the conc abbreviation 'OPS' found in the seized material refers to the assessee and this presumption was based on the short name popularly used in the press and media to refer to the assessee. However, drawing such having any independent corroborative evidence that the acronym 'OPS' used in the seized material refers only to the assessee and not to any other person whose name may have the same acronym, could not be sustained. In the absence of any other corroborative evidence supporting the inference drawn by AO, it could be said that the conclusion of Ld. AO was mere conjecture which could not be accepted to fasten huge tax liability on the assessee on account of such inference. 15. Proceeding further, it could also be seen that the impugned additions have been made in the hands of the assessee merely on the basis of vague entries found in the material seized from a third seized from the premises of a third in the case of the said third premises of the assessee nor was the same found to be in the handwriting of the assessee. Therefore, such material, unless backed b would not constitute adequate evidence to draw any adverse inference against the assessee as held by Hon'ble Delhi High Court in the case of CIT vs. Sant Lal [2020] 118 Taxmann.com 432 (Del). The Hon'ble Court, in similar situatio no addition could be made merely on the basis of such entries. The ratio of the said decision was squarely applicable to the case of the assessee as the Ld. AO has not referred to any cogent material to corroborate the entries made in the material seized from a third by the said third-party with the assessee. The other decisions including the decision of Jabalpur Bench of Tribunal in the case of ACIT vs. Satyapal Wassan [TS-5104-ITAT-2007 (Jabalpur) Mumbai Tribunal in the case of Riveria Properties Pvt. Ltd. Vs ITO (ITA No.250/Mum/2013) held that AO was required to bring further evidence on record to show that the money was actually exchanged between th case where there was no other evidence on record to prove that on paid except the loose sheets found in the premise of third made by the third- ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 20 :: by Ld. AO to be pertaining to the assessee. All the entries so considered by AO merely contain an abbreviation viz. 'OPS Ramesh'. The Ld. AO relied on the statement of Shri K. Srinivasulu u/s 132(4) dated 10.12.2016 to conclude that me of 'OPS Ramesh', in the seized material, refers to the assessee. Shri K. Srinivasulu explained in his statement that the name 'OPS Ramesh' in the seized material was used to denote 'PA to OPS' and since the assessee was popularly referred to in the media / press and by the general public as 'OPS', Ld. AO drew inference that the payments noted in the seized material with the name 'OPS Ramesh' represent the payments made to the assessee. However, as rightly noted by Ld. CIT(A), there was no mention anywhere in the statement of Shri K. Srinivasulu that the assessee was the actual recipient of the payments shown against the said name of 'OPS Ramesh'. Shri K.Srinivasulu did not state anywhere in his statement that the acronym 'OPS' was used in the seized ial to denote the assessee. Further, the seized material did not contain any evidence to draw the inference that the payments noted with the name 'OPS Ramesh' actually represented amounts received by the assessee. Therefore, it was to be held that the conclusion of Ld. AO was on mere presumption that the abbreviation 'OPS' found in the seized material refers to the assessee and this presumption was based on the short name popularly used in the press and media to refer to the assessee. However, drawing such a presumption without having any independent corroborative evidence that the acronym 'OPS' used in the seized material refers only to the assessee and not to any other person whose name may have the same acronym, could not be sustained. In the ny other corroborative evidence supporting the inference drawn by AO, it could be said that the conclusion of Ld. AO was mere conjecture which could not be accepted to fasten huge tax liability on the assessee on account of urther, it could also be seen that the impugned additions have been made in the hands of the assessee merely on the basis of vague entries found in the material seized from a third-party premise. The said material was seized from the premises of a third-party during the course of search conducted in the case of the said third-party. The said material was neither seized from the premises of the assessee nor was the same found to be in the handwriting of the assessee. Therefore, such material, unless backed by corroborative evidence, would not constitute adequate evidence to draw any adverse inference against the assessee as held by Hon'ble Delhi High Court in the case of CIT vs. Sant Lal [2020] 118 Taxmann.com 432 (Del). The Hon'ble Court, in similar situatio no addition could be made merely on the basis of such entries. The ratio of the said decision was squarely applicable to the case of the assessee as the Ld. AO has not referred to any cogent material to corroborate the entries made in the seized from a third-party which are purportedly the transactions made party with the assessee. The other decisions including the decision of Jabalpur Bench of Tribunal in the case of ACIT vs. Satyapal Wassan 2007 (Jabalpur)-O] further supports this proposition. Similarly, Mumbai Tribunal in the case of Riveria Properties Pvt. Ltd. Vs ITO (ITA No.250/Mum/2013) held that AO was required to bring further evidence on record to show that the money was actually exchanged between th case where there was no other evidence on record to prove that on paid except the loose sheets found in the premise of third-party and admission -party. Also, Hon'ble Supreme Court in the case of Common /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal by Ld. AO to be pertaining to the assessee. All the entries so considered by AO merely contain an abbreviation viz. 'OPS Ramesh'. The Ld. AO relied on the statement of Shri K. Srinivasulu u/s 132(4) dated 10.12.2016 to conclude that me of 'OPS Ramesh', in the seized material, refers to the assessee. Shri K. Srinivasulu explained in his statement that the name 'OPS Ramesh' in the seized material was used to denote 'PA to OPS' and since the assessee was a / press and by the general public as 'OPS', Ld. AO drew inference that the payments noted in the seized material with the name 'OPS Ramesh' represent the payments made to the assessee. However, as e in the statement of Shri K. Srinivasulu that the assessee was the actual recipient of the payments shown against the said name of 'OPS Ramesh'. Shri K.Srinivasulu did not state anywhere in his statement that the acronym 'OPS' was used in the seized ial to denote the assessee. Further, the seized material did not contain any evidence to draw the inference that the payments noted with the name 'OPS Ramesh' actually represented amounts received by the assessee. Therefore, it lusion of Ld. AO was on mere presumption that the abbreviation 'OPS' found in the seized material refers to the assessee and this presumption was based on the short name popularly used in the press and a presumption without having any independent corroborative evidence that the acronym 'OPS' used in the seized material refers only to the assessee and not to any other person whose name may have the same acronym, could not be sustained. In the ny other corroborative evidence supporting the inference drawn by AO, it could be said that the conclusion of Ld. AO was mere conjecture which could not be accepted to fasten huge tax liability on the assessee on account of urther, it could also be seen that the impugned additions have been made in the hands of the assessee merely on the basis of vague entries party premise. The said material was rty during the course of search conducted party. The said material was neither seized from the premises of the assessee nor was the same found to be in the handwriting of the y corroborative evidence, would not constitute adequate evidence to draw any adverse inference against the assessee as held by Hon'ble Delhi High Court in the case of CIT vs. Sant Lal [2020] 118 Taxmann.com 432 (Del). The Hon'ble Court, in similar situation, held no addition could be made merely on the basis of such entries. The ratio of the said decision was squarely applicable to the case of the assessee as the Ld. AO has not referred to any cogent material to corroborate the entries made in the party which are purportedly the transactions made party with the assessee. The other decisions including the decision of Jabalpur Bench of Tribunal in the case of ACIT vs. Satyapal Wassan O] further supports this proposition. Similarly, Mumbai Tribunal in the case of Riveria Properties Pvt. Ltd. Vs ITO (ITA No.250/Mum/2013) held that AO was required to bring further evidence on record to show that the money was actually exchanged between the parties in case where there was no other evidence on record to prove that on-money was party and admission party. Also, Hon'ble Supreme Court in the case of Common Cause vs. UOI (supra) stressed the need for exercising caution and for bringing on record relevant, reliable and cogent evidence to corroborate the entries found in loose sheets and note books regarding the payments allegedly made to important constitutional functionar unscrupulous persons in order to achieve ulterior goals. Therefore, it was important that the corroborative evidence was available on record in support of the entries in the seized material found in the premi Considering all these facts as well as the ratio of these judicial precedents, we concur with the findings of Ld. CIT(A) that the seized material did not contain complete information to facilitate drawing of such an adverse inference ag the assessee. The information was a vague information. In such a situation, it could not be inferred with a reasonable degree of certainty that the payments were made to a person whose name (or code name) appears therein and that the said amounts rep CIT(A), an entry made in a diary or notebook by a third person with scant details could not be used to fasten tax liability on the person whose name appears therein, in the absence of corroborati unilaterally makes entries in a diary / note book showing payments to a person to suit his convenience, the payments could not be inferred to have been made to the said person unless there is corroborative evidence to establis making of payments to the said person. 16. So far as the statement of Shri K. Srinivasulu is concerned, as rightly held by Ld. CIT(A), the same would not serve as corroborative evidence in respect of entries in the seized material. That person entries represent incidental expenses paid to various persons. When there were numerous pages and entries in the seized material, such a general statement would not inspire confidence for drawing any conclusion in respect entries appearing therein allegedly with the abbreviated name of the assessee to conclude that the entries represent payment made to the assessee only. There was nothing in the statement even to remotely suggest that the entries appearing with the abbreviated name actually represent payment made to the assessee. The statement merely stated that the entries were maintained on the instructions of the partners of M/s SRS mining. It was very clear that Shri K. Srinivasulu had no first material and had merely noted whatever was told to him by the partners. In such a situation, the statement would serve a very limited purpose of ascertaining the identity of the person who made the entries and nothing Since the entries were made on the instructions of the partners, it is the partners who were required to explain the exact identity of the recipients, the nature of payments, the purpose of payments and the identity of the person who made the payment would show that any of the partners was examined with regard to relevant entries in the seized material. There was no reference to any such statement of the partners in the assessment order. Therefore, t Srinivasulu could barely be considered as corroborative evidence against the assessee with regard to the entries in the seized material. This was further fortified by the fact that the said statement was retracted vide letters dated 03-2017 and 23-03 K. Srinivasulu through the Jail Superintendent when he was lodged in the Jail. In the retraction letters, it was claimed that the earlier statement was given under ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 21 :: (supra) stressed the need for exercising caution and for bringing on record relevant, reliable and cogent evidence to corroborate the entries found in loose sheets and note books regarding the payments allegedly made to important constitutional functionaries so that the process of law is not abused by unscrupulous persons in order to achieve ulterior goals. Therefore, it was important that the corroborative evidence was available on record in support of the entries in the seized material found in the premises of third Considering all these facts as well as the ratio of these judicial precedents, we concur with the findings of Ld. CIT(A) that the seized material did not contain complete information to facilitate drawing of such an adverse inference ag the assessee. The information was a vague information. In such a situation, it could not be inferred with a reasonable degree of certainty that the payments were made to a person whose name (or code name) appears therein and that the said amounts represent the income of the said person. As rightly held by Ld. CIT(A), an entry made in a diary or notebook by a third person with scant details could not be used to fasten tax liability on the person whose name appears therein, in the absence of corroborative evidence. If a third unilaterally makes entries in a diary / note book showing payments to a person to suit his convenience, the payments could not be inferred to have been made to the said person unless there is corroborative evidence to establis making of payments to the said person. 16. So far as the statement of Shri K. Srinivasulu is concerned, as rightly held by Ld. CIT(A), the same would not serve as corroborative evidence in respect of entries in the seized material. That person gave a general statement that the entries represent incidental expenses paid to various persons. When there were numerous pages and entries in the seized material, such a general statement would not inspire confidence for drawing any conclusion in respect entries appearing therein allegedly with the abbreviated name of the assessee to conclude that the entries represent payment made to the assessee only. There was nothing in the statement even to remotely suggest that the entries the abbreviated name actually represent payment made to the assessee. The statement merely stated that the entries were maintained on the instructions of the partners of M/s SRS mining. It was very clear that Shri K. Srinivasulu had no first-hand knowledge of the payments noted in the seized material and had merely noted whatever was told to him by the partners. In such a situation, the statement would serve a very limited purpose of ascertaining the identity of the person who made the entries and nothing Since the entries were made on the instructions of the partners, it is the partners who were required to explain the exact identity of the recipients, the nature of payments, the purpose of payments and the identity of the person who made the payments etc. However, there is no material on record which would show that any of the partners was examined with regard to relevant entries in the seized material. There was no reference to any such statement of the partners in the assessment order. Therefore, the statement of Shri K. Srinivasulu could barely be considered as corroborative evidence against the assessee with regard to the entries in the seized material. This was further fortified by the fact that the said statement was retracted vide letters dated 03-2017 addressed to DDIT (Inv.) which was submitted by Shri K. Srinivasulu through the Jail Superintendent when he was lodged in the Jail. In the retraction letters, it was claimed that the earlier statement was given under /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal (supra) stressed the need for exercising caution and for bringing on record relevant, reliable and cogent evidence to corroborate the entries found in loose sheets and note books regarding the payments allegedly made to ies so that the process of law is not abused by unscrupulous persons in order to achieve ulterior goals. Therefore, it was important that the corroborative evidence was available on record in support of ses of third-party. Considering all these facts as well as the ratio of these judicial precedents, we concur with the findings of Ld. CIT(A) that the seized material did not contain complete information to facilitate drawing of such an adverse inference against the assessee. The information was a vague information. In such a situation, it could not be inferred with a reasonable degree of certainty that the payments were made to a person whose name (or code name) appears therein and that resent the income of the said person. As rightly held by Ld. CIT(A), an entry made in a diary or notebook by a third person with scant details could not be used to fasten tax liability on the person whose name ve evidence. If a third-party unilaterally makes entries in a diary / note book showing payments to a person to suit his convenience, the payments could not be inferred to have been made to the said person unless there is corroborative evidence to establish the actual 16. So far as the statement of Shri K. Srinivasulu is concerned, as rightly held by Ld. CIT(A), the same would not serve as corroborative evidence in respect of gave a general statement that the entries represent incidental expenses paid to various persons. When there were numerous pages and entries in the seized material, such a general statement would not inspire confidence for drawing any conclusion in respect of specific entries appearing therein allegedly with the abbreviated name of the assessee to conclude that the entries represent payment made to the assessee only. There was nothing in the statement even to remotely suggest that the entries the abbreviated name actually represent payment made to the assessee. The statement merely stated that the entries were maintained on the instructions of the partners of M/s SRS mining. It was very clear that Shri K. e of the payments noted in the seized material and had merely noted whatever was told to him by the partners. In such a situation, the statement would serve a very limited purpose of ascertaining the identity of the person who made the entries and nothing more. Since the entries were made on the instructions of the partners, it is the partners who were required to explain the exact identity of the recipients, the nature of payments, the purpose of payments and the identity of the person s etc. However, there is no material on record which would show that any of the partners was examined with regard to relevant entries in the seized material. There was no reference to any such statement of he statement of Shri K. Srinivasulu could barely be considered as corroborative evidence against the assessee with regard to the entries in the seized material. This was further fortified by the fact that the said statement was retracted vide letters dated 21- 2017 addressed to DDIT (Inv.) which was submitted by Shri K. Srinivasulu through the Jail Superintendent when he was lodged in the Jail. In the retraction letters, it was claimed that the earlier statement was given under coercion and duress and in a state of mental shock, depression and physical exhaustion at the relevant point of time due to continuance of search action continuously for more than 3 days without a break and he not being allowed to sleep or to take rest. He further sta typed statement and his signature was obtained by force. He stated that he never paid any money to various persons as recorded in the typed assessment. He also stated that he signed the statement to end the prolonged intimidation, harassment and mental torture. Shri K. Srinivasulu reiterated his retraction in the course of statement u/s 131 as recorded by Ld. AO on 30 2021 during the course of assessment proceedings. This being the case, it could be said that the retraction was rejected by Ld. AO without any valid reasons. 17. It could further be noted that similar additions were made by revenue in the case of another similarly placed assessee by the name Shri P. Ramamohan Rao. That assessee sought cross of assessment proceedings. However, Shri K. Srinivasulu became non cooperative and hostile during the course of preliminary examination of the said person before Ld. AO on 19.12.2018. Since the witness tu concluded that cross assessee preferred Writ Petition before Hon'ble High Court of Madras praying for issue of directions to the AO to permit the assessee to cross witness being relied upon by Ld. AO. The writ petition was dismissed vide order dated 27.12.2018. The Hon'ble Court held that there was no infirmity in the order of AO in refusing the request for cross turned hostile. The Hon'ble Co statement of Shri K. Srinivasulu which is in favor of the revenue, the AO has to let in other reliable evidence to corroborate the same. Similarly, the Hon'ble Court in the case of M/s SRS mining Vs UOI (1 observed that the statement of Shri K Srinivasulu could not be relied upon as he turned hostile by giving specific retraction statement and there was no need to accord permission to cross these observations, it was to be held that the statement of Shri K. Srinivasulu could not be used against the assessee unless some other evidence to corroborate the same was made available on record. did not rely on any other corroborative evidences except for relying on the statement of Shri K. Srinivasulu since in the sworn statements of three other partners recorded on 08 regarding the seized material allegedly co charges paid to various persons. It was thus evident that no other corroborative evidence was available in record in respect of notings in the seized material. Therefore, the impugned addition could not be sustained merel statement. The conclusions of Ld. CIT(A), in this regard, find our concurrence. 18. Further, the assessee could not be expected to discharge a reverse burden as per legal principles laid down by Hon'ble Supreme Court in the case of K.P. Varghese vs. ITO (131 ITR 597) holding that onus of establishing that the conditions of taxability are fulfilled would be on revenue and throwing this burden on the assessee would be to cast an almost impossible burden upon him to establish the negative. Th assessee was in receipt of payments as noted in the seized material. This burden was not discharged by revenue in the present case. Further, as per settled legal ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 22 :: duress and in a state of mental shock, depression and physical exhaustion at the relevant point of time due to continuance of search action continuously for more than 3 days without a break and he not being allowed to sleep or to take rest. He further stated that he was not allowed to read the typed statement and his signature was obtained by force. He stated that he never paid any money to various persons as recorded in the typed assessment. He also stated that he signed the statement to end the prolonged intimidation, harassment and mental torture. Shri K. Srinivasulu reiterated his retraction in the course of statement u/s 131 as recorded by Ld. AO on 30 2021 during the course of assessment proceedings. This being the case, it could that the retraction was rejected by Ld. AO without any valid reasons. 17. It could further be noted that similar additions were made by revenue in the case of another similarly placed assessee by the name Shri P. Ramamohan Rao. That assessee sought cross-examination of Shri K. Srinivasulu during the course of assessment proceedings. However, Shri K. Srinivasulu became non cooperative and hostile during the course of preliminary examination of the said person before Ld. AO on 19.12.2018. Since the witness turned hostile, it was concluded that cross-examination would not serve any useful purpose. That assessee preferred Writ Petition before Hon'ble High Court of Madras praying for issue of directions to the AO to permit the assessee to cross s being relied upon by Ld. AO. The writ petition was dismissed vide order dated 27.12.2018. The Hon'ble Court held that there was no infirmity in the order of AO in refusing the request for cross-examination since the witness turned hostile. The Hon'ble Court further observed that if AO was to rely on the statement of Shri K. Srinivasulu which is in favor of the revenue, the AO has to let in other reliable evidence to corroborate the same. Similarly, the Hon'ble Court in the case of M/s SRS mining Vs UOI (141 Taxmann.com 272), at para 9, observed that the statement of Shri K Srinivasulu could not be relied upon as he turned hostile by giving specific retraction statement and there was no need to accord permission to cross-examine him in view of the said reason. Considering these observations, it was to be held that the statement of Shri K. Srinivasulu could not be used against the assessee unless some other evidence to corroborate the same was made available on record. In the present case, Ld. AO on any other corroborative evidences except for relying on the statement of Shri K. Srinivasulu since in the sworn statements of three other partners recorded on 08-12-2016, no questions were posed to them at all regarding the seized material allegedly containing the details of incidental charges paid to various persons. It was thus evident that no other corroborative evidence was available in record in respect of notings in the seized material. Therefore, the impugned addition could not be sustained merely relying on this statement. The conclusions of Ld. CIT(A), in this regard, find our concurrence. 18. Further, the assessee could not be expected to discharge a reverse burden as per legal principles laid down by Hon'ble Supreme Court in the case of K.P. arghese vs. ITO (131 ITR 597) holding that onus of establishing that the conditions of taxability are fulfilled would be on revenue and throwing this burden on the assessee would be to cast an almost impossible burden upon him to establish the negative. Therefore, it was onus of Ld.AO to establish that the assessee was in receipt of payments as noted in the seized material. This burden was not discharged by revenue in the present case. Further, as per settled legal /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal duress and in a state of mental shock, depression and physical exhaustion at the relevant point of time due to continuance of search action continuously for more than 3 days without a break and he not being allowed to ted that he was not allowed to read the typed statement and his signature was obtained by force. He stated that he never paid any money to various persons as recorded in the typed assessment. He also stated that he signed the statement to end the prolonged ordeal of intimidation, harassment and mental torture. Shri K. Srinivasulu reiterated his retraction in the course of statement u/s 131 as recorded by Ld. AO on 30-03- 2021 during the course of assessment proceedings. This being the case, it could that the retraction was rejected by Ld. AO without any valid reasons. 17. It could further be noted that similar additions were made by revenue in the case of another similarly placed assessee by the name Shri P. Ramamohan Rao. xamination of Shri K. Srinivasulu during the course of assessment proceedings. However, Shri K. Srinivasulu became non- cooperative and hostile during the course of preliminary examination of the said rned hostile, it was examination would not serve any useful purpose. That assessee preferred Writ Petition before Hon'ble High Court of Madras praying for issue of directions to the AO to permit the assessee to cross-examine the s being relied upon by Ld. AO. The writ petition was dismissed vide order dated 27.12.2018. The Hon'ble Court held that there was no infirmity in the examination since the witness urt further observed that if AO was to rely on the statement of Shri K. Srinivasulu which is in favor of the revenue, the AO has to let in other reliable evidence to corroborate the same. Similarly, the Hon'ble 41 Taxmann.com 272), at para 9, observed that the statement of Shri K Srinivasulu could not be relied upon as he turned hostile by giving specific retraction statement and there was no need to on. Considering these observations, it was to be held that the statement of Shri K. Srinivasulu could not be used against the assessee unless some other evidence to In the present case, Ld. AO on any other corroborative evidences except for relying on the statement of Shri K. Srinivasulu since in the sworn statements of three other 2016, no questions were posed to them at all ntaining the details of incidental charges paid to various persons. It was thus evident that no other corroborative evidence was available in record in respect of notings in the seized material. y relying on this statement. The conclusions of Ld. CIT(A), in this regard, find our concurrence. 18. Further, the assessee could not be expected to discharge a reverse burden as per legal principles laid down by Hon'ble Supreme Court in the case of K.P. arghese vs. ITO (131 ITR 597) holding that onus of establishing that the conditions of taxability are fulfilled would be on revenue and throwing this burden on the assessee would be to cast an almost impossible burden upon him erefore, it was onus of Ld.AO to establish that the assessee was in receipt of payments as noted in the seized material. This burden was not discharged by revenue in the present case. Further, as per settled legal precedents, no addition could be made unle validate the entries found in the material seized from a third party. The Hon'ble Supreme Court in the case of CBI vs. V.C. Shukla (AIR SC 410) held that every transaction as recorded in the regular books needs to be i corroborated and proved when some liability is to be fastened in respect of such transactions. The legal principle as laid down by Hon'ble Supreme Court is that independent corroborative evidence is required in respect of entries in regular books of accounts and the same would apply in the present case. The decision of Bangalore Tribunal in the case of ACIT vs. Sri B.S.Yediyurappa (ITA No.14/Bang/2019 dated 07.04.2022) is on similar fact. The bench held that the addition made in the hands of th State of Karnataka during the relevant period, based on the entries of cash payments found recorded with the initials \"BSY'' in the material seized during the course of search conducted in the case of a third sustainable in the absence of any evidence to corroborate the notings in the seized material. The said decision, in our opinion, is squarely applicable to the facts of the present case and favors the case of the assessee. 19. Considering all these facts, the apt conclusion would be that the seized material was in the nature of dumb document which did not contain complete and unambiguous information to arrive at such a conclusion that the assessee was in receipt of the payments found noted Ramesh'. There was no corroborative evidence to support and supplement the details in the seized material to conclusively establish that the name 'OPS Ramesh' found in the seized material refers to the assessee only. There was corroborative evidence to prove that the payments noted in the seized material have actually materialized and transfer of money has actually taken place between the concerned parties. In view of all these reasons, the addition of alleged receipts by th by Ld. CIT(A). We endorse the view of Ld. CIT(A), in this regard.” 22. In view of our above discussions, specific facts of this case, we are of the considered view that, the Ld. CIT(A) had rightly hel seized material was in the nature of dumb document which did not contain complete and unambiguous information to arrive at such a conclusion that the assessee was in receipt of was no corroborative evidence to support and notings, particularly when the purported transaction concerning these notings never materialized. Also, as held above, the assessee had also validly retracted his original statement and therefore the AO’s reliance ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 23 :: precedents, no addition could be made unless there is corroborative evidence to validate the entries found in the material seized from a third party. The Hon'ble Supreme Court in the case of CBI vs. V.C. Shukla (AIR SC 410) held that every transaction as recorded in the regular books needs to be i corroborated and proved when some liability is to be fastened in respect of such transactions. The legal principle as laid down by Hon'ble Supreme Court is that independent corroborative evidence is required in respect of entries in regular oks of accounts and the same would apply in the present case. The decision of Bangalore Tribunal in the case of ACIT vs. Sri B.S.Yediyurappa (ITA No.14/Bang/2019 dated 07.04.2022) is on similar fact. The bench held that the addition made in the hands of the said person who was the Chief Minister of the State of Karnataka during the relevant period, based on the entries of cash payments found recorded with the initials \"BSY'' in the material seized during the course of search conducted in the case of a third party, would not sustainable in the absence of any evidence to corroborate the notings in the seized material. The said decision, in our opinion, is squarely applicable to the facts of the present case and favors the case of the assessee. all these facts, the apt conclusion would be that the seized material was in the nature of dumb document which did not contain complete and unambiguous information to arrive at such a conclusion that the assessee was in receipt of the payments found noted therein against the name 'OPS Ramesh'. There was no corroborative evidence to support and supplement the details in the seized material to conclusively establish that the name 'OPS Ramesh' found in the seized material refers to the assessee only. There was corroborative evidence to prove that the payments noted in the seized material have actually materialized and transfer of money has actually taken place between the concerned parties. In view of all these reasons, the addition of alleged receipts by the assessee from M/s SRS Mining has rightly been deleted by Ld. CIT(A). We endorse the view of Ld. CIT(A), in this regard.” In view of our above discussions, specific facts of this case, we are of the considered view that, the Ld. CIT(A) had rightly hel seized material was in the nature of dumb document which did not contain complete and unambiguous information to arrive at such a conclusion that the assessee was in receipt of on-monies and thatt was no corroborative evidence to support and supplement the notings, particularly when the purported transaction concerning these notings never materialized. Also, as held above, the assessee had also validly retracted his original statement and therefore the AO’s reliance /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal ss there is corroborative evidence to validate the entries found in the material seized from a third party. The Hon'ble Supreme Court in the case of CBI vs. V.C. Shukla (AIR SC 410) held that every transaction as recorded in the regular books needs to be independently corroborated and proved when some liability is to be fastened in respect of such transactions. The legal principle as laid down by Hon'ble Supreme Court is that independent corroborative evidence is required in respect of entries in regular oks of accounts and the same would apply in the present case. The decision of Bangalore Tribunal in the case of ACIT vs. Sri B.S.Yediyurappa (ITA No.14/Bang/2019 dated 07.04.2022) is on similar fact. The bench held that the e said person who was the Chief Minister of the State of Karnataka during the relevant period, based on the entries of cash payments found recorded with the initials \"BSY'' in the material seized during party, would not sustainable in the absence of any evidence to corroborate the notings in the seized material. The said decision, in our opinion, is squarely applicable to the all these facts, the apt conclusion would be that the seized material was in the nature of dumb document which did not contain complete and unambiguous information to arrive at such a conclusion that the assessee therein against the name 'OPS Ramesh'. There was no corroborative evidence to support and supplement the details in the seized material to conclusively establish that the name 'OPS Ramesh' found in the seized material refers to the assessee only. There was no corroborative evidence to prove that the payments noted in the seized material have actually materialized and transfer of money has actually taken place between the concerned parties. In view of all these reasons, the addition of e assessee from M/s SRS Mining has rightly been deleted In view of our above discussions, specific facts of this case, we are of the considered view that, the Ld. CIT(A) had rightly held that the seized material was in the nature of dumb document which did not contain complete and unambiguous information to arrive at such a monies and thatthere supplement the stray notings, particularly when the purported transaction concerning these notings never materialized. Also, as held above, the assessee had also validly retracted his original statement and therefore the AO’s reliance thereupon to justify the impugned addition is found to be unjustified view of all these reasons, Ld. CIT(A). Accordingly, all the grounds raised by the Revenue stands dismissed. 23. In view of our above findings, the legal g assessee in the cross objections have become academic and is therefore infructuous, but left open 24. In the result, both the appeal of the Revenue and cross objections of the assessee are dismissed. Order pronounced on the Sd/- (अिमताभशु\u0018ा) (AMITABH SHUKLA लेखासद\u0007य/ACCOUNTANT MEMBER चे\u0003ई/Chennai, \u0005दनांक/Dated: 28th February TLN, Sr.PS आदेशक\r\u000eितिलिपअ\u0014ेिषत/Copy 1. अपीलाथ\r/Appellant 2. \u000e\u000fथ\r/Respondent 3. आयकरआयु\u0015/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय\u000eितिनिध/DR 5. गाड\u001eफाईल/GF ITA No.1811/Chny/20 CO No.69/Chny/2024 (AY 2017 :: 24 :: the impugned addition is found to be unjustified view of all these reasons, we see no reason to interfere with the order of Ld. CIT(A). Accordingly, all the grounds raised by the Revenue stands In view of our above findings, the legal grounds raised by the assessee in the cross objections have become academic and is therefore , but left open. In the result, both the appeal of the Revenue and cross objections dismissed. Order pronounced on the 28th day of February, 2025 AMITABH SHUKLA) /ACCOUNTANT MEMBER Sd/ (एबीटी. (ABY T. VARKEY \tयाियकसद\u0007य/JUDICIAL MEMBER February, 2025. to: , Chennai / Madurai / Salem / Coimbatore. /Chny/2024 (AY 2017-18)& CO No.69/Chny/2024 (AY 2017-18) Gopu Rajagopal the impugned addition is found to be unjustified. In see no reason to interfere with the order of Ld. CIT(A). Accordingly, all the grounds raised by the Revenue stands rounds raised by the assessee in the cross objections have become academic and is therefore In the result, both the appeal of the Revenue and cross objections 25, in Chennai. Sd/- . वक ) ABY T. VARKEY) /JUDICIAL MEMBER , Chennai / Madurai / Salem / Coimbatore. "