Madhu Lodha, New Delhi V. ACIT, Centyral circle-16, New Delhi

ITA 7603/DEL/2019

AI Insights

The case revolves around an appeal by Madhu Lodha against the order of the CIT(A)-XXVI, New Delhi, which confirmed the additions made by the Assessing Officer (AO) based on documents seized during a search operation at the premises of Paras Mal Lodha Group. The primary contention was that the additions were made without any incriminating material directly linked to the assessee and relied on unsigned, undated, and rough loose papers. The Tribunal examined the legality of the additions and the evidential value of the documents used by the AO.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 131814 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 05-12-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 15-09-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Loose papers; Corroborative evidences; Documents seized
• Section: 132; 153A

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL DELHIBENCH ‘E’, NEW DELHI Before Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US, Judicial Member ITA No. 7603/Del/2019 : Asstt. Year : 2013-14 Madhu Lodha, C/o R. C. Rai & Associates, 203, 2 nd Floor, Akash Deep Building, 26A, Barakhamba Road, New Delhi Vs ACIT, Central Circle-6, New Delhi (APPELLANT) (RESPONDENT) PAN No. ABBPL2082R Assessee by : Sh. R. C. Rai, Adv. & Ms. Kamal Sharma, Adv. Revenue by : Ms. Sarita Kumari, CIT DR Date of Hearing: 06.12.2022 Date of Pronouncement: 28.12.2022 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of ld. CIT(A)-XXVI, New Delhi dated 23.07.2019. 2. Following grounds have been raised by the assessee: “1. On the facts and in the circumstances of the case as well as in law the Ld. Commissioner of Income Tax (Appeals) grossly erred in confirming the action of Ld. Assessing Officer disturbing the item of regular assessment without any incriminating material found and seized during the search and post search inquiry is valid in law which is bad in law hence the impugned assessment order is ab initio void and without jurisdiction. 2. On the facts and in the circumstances of the case as well as in law the Ld. Commissioner of Income Tax (Appeals) grossly erred in confirming the action of Ld. ITA No. 7603/Del/2019 Madhu Lodha 2 Assessing Officer using the unsigned, undated and rough loose papers having no evidential/financial value without any corroborative evidences or any material on record to substantiate the allegation that the transaction under reference in fact culminated in earning the income which was not disclosed by appellant. 3. On the facts and in the circumstances of the case as well as in law the Ld. Commissioner of Income Tax (Appeals) grossly erred in confirming the addition of if 11,50,000/- in surmise and conjecture based on dumb document without any corroborative material on record to support the addition.” 3. A Search & seizure operation u/s 132 of the I.T. Act, 1961 was carried out at the business premise of Paras Mal Lodha Group on 28.06.2016 and during the course of search certain documents belonging to the assessee were seized. On the basis of documents seized, proceedings u/s 153A were initiated in the case of the assessee. The return of income in response to notice u/s 153A of the Act, 1961 was filed by the assessee on 25.10.2018 declaring a total income of Rs.2,24,800/-. 4. The relevant part of the Assessment Order on the issue of addition made by the AO is as under: “Addition on the basis of seized material On perusal of seized incriminating material inventorized as Page no. 31, Annexure PCS-30 from the premise 48, S.N. Roy Road, Kolkata, it is seen that there is some transaction by Mr. Tarun A/c' to 'Mrs. ML' on 14.12.2012. The relevant extract of seized material is placed below: A/c Tarun - Mrs. ML on 14.12.2012 USD 21500 - 11,50,000 Paid - 9,00,000 Due - 2,50,000 ITA No. 7603/Del/2019 Madhu Lodha 3 The assessee was show caused to explain the transaction vide notice u/s 142(1) dated 13.12.2018. In response to the notice, the assessee furnished reply vide letter dated 21.12.2018. The assessee submitted that the name of assessee is not mentioned in the seized incriminating document and that it is a dumb document. The reply of the assessee is considered and found not tenable. The incriminating material was seized from the premise of the assessee. Further, it is clearly mentioned in the seized document 'Mrs. MU. It can be understood that it is addressed to a lady and MU is nothing by the assessed s name Mrs. Madhu Lodha. From the seized incriminating document it can be seen that payment of USD 21,500/- is being made to the assessee on 14.12.2012 which when converted to 1NR amount to Rs. 11,50,000/- at conversion rate prevailing at that time i.e. 1 USD = Rs. 54 (approx.). 5. Heard the arguments of both the parties and perused the material available on record. • Document has not been seized from the custody of the assessee. • It has been seized from the premises of Peerless Consultancy Services Pvt. Ltd. at the premises of S. N. Roy Road, Kolkata. • The document has not been confronted to the assessee. • The presumption u/s 292C cannot be invoked without confronting the assessee and giving an opportunity to rebut the same. • The name of the assessee is not mentioned and there is no reason to link the document as belonging to the assessee. • CBDT vide Instruction F.No.286/2/2003-IT (Inv. II), dated 10-3-2003 and Circular No. F.No.286/98/2013-IT (INV.II)], dtd. 18-12-2014 time and again emphasized that there should be focus and concentration on collection of evidence of income which leads to information on what has not been ITA No. 7603/Del/2019 Madhu Lodha 4 disclosed or is not likely to be disclosed before the Income Tax Department. • In the instant case, no corroborative evidences has been brought by the revenue nor the statement of the assessee has been recorded during search or post search enquiry or nor any enquiries have been conducted. 6. Hence, in keeping in view, the entirety of the instant case, we hold that no addition is called for in this case. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 28/12/2022. Sd/- Sd/- (Yogesh Kumar US) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 28/12/2022 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR