The DCIT, Central Circle-1(1), Ahmedabad V. Shri Jayprakash A Keshwani, Ahmedabad

ITSSA 99/AHD/2021

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax against the order of the Ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad, which had deleted the additions made by the Assessing Officer. The additions were based on an excel file seized during a search operation, which allegedly contained details of on-money payments made by the assessee, Shri Jayprakash A Keshwani, to Navratna Organisers & Developers Pvt. Ltd. (NODPL) for property purchases. The Tribunal found that the additions were made without sufficient evidence directly linking the assessee to the payments, and that the assessee had not been given an opportunity to cross-examine the parties involved, which was a violation of the principles of natural justice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125635 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-08-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 16-07-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 26-07-2021
• Other Referred Cases: Andaman Timber Industries Vs. CCE, CIT Vs. Sunita Dhhadda, Gyankumar Agarwal v ACIT, Cosmos Infra Engineering (India) Ltd. v DCIT, Jawaharbhai Atmaram Hathiwala, ACIT V Prabhat Oil Mills, Rajvee Tractors Pvt. Ltd., Gordhanbhai Talavia, Pradeep Amrutlal Runwal, Regency Mahavir Properties, Vinit Ranawat
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Document seized; Principle of natural justice; Source of fund; Block assessment; Set aside; Capital Gains
• Section: 69; 132; 69C; 142(1); 13; 153C; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I .T .( SS )A . N o . 9 9 / A h d/ 2 0 21 ( A s se ss m e nt Y e a r : 20 15- 16 ) D e put y C o m m i s s io ner o f I n c o m e Ta x, C e ntr al C ir c le - 1 ( 1 ) , A h m e da b ad V s .Sh r i J a yp r a k a s h A K es h w an i, 30 4 , A mbi e n c e T o we r , Ne ar Ju dge s B u ng lo w s B od a k d ev , Va s tr a p u r , Ah me da b ad -3 80 0 5 4 [ P A N N o. A E XP K0 36 4 A ] (Appellant) .. (Respondent) Appellant by : Shri Suresh Gandhi, A.R. Respondent by: Dr. Darsi Suman Ratnam, CIT-D.R. D a t e of H ea r i ng 17.07.2023 D a t e of P r o no u n ce me nt 31.08.2023 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: The appeal has been filed by the Revenue against the order passed by the Ld. Commissioner of Income Tax (Appeals)-11, (in short “Ld. CIT(A)”), Ahmedabad vide order dated 31.05.2021 passed for Assessment Year 2015-16. 2. The Revenue has taken the following grounds of appeal:- “1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has failed to appreciate the fact that the excel file namely, x10000226.xls, clearly shows that during the F.Y.2014-15, the assessee made payment of Rs.8,05,11,000/- to NODPL. The excel file seized is a systematic record of transaction of NODPL, this fact had been accepted IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 2 - by NODPL in its application u/s 245D before Hon’ble Settlement Commission. 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has failed to appreciate that the assessee had booked/purchased a villa in KBG Scheme Unit No.371 & 372 and had business/financial relationship with NODPL, despite the name of the assessee is clearly mentioned in excel file namely, x10000226.xls. 3. On the facts in the circumstances of the case and in law, the ld. CIT(A) has failed to appreciate that NODPL has accepted on money receipts recorded in the seized excel sheet and has offered income on the same in its application filed before ITSC. Also the submission filed by NODPL shows that the transaction was done between NODPL and the assessee. 4. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has failed to appreciate that the seized excel sheet was duly reproduced in notice u/s 142(1) of the Act dated 21/10/2019 and satisfaction note was also provided to the assessee which was completely ignored by the Ld. CIT(A). Moreover the soft copy of the same was also sent to the assessee through e-proceedings facility, however the assessee has intentionally ignored the onus to explain the purpose of payment made to NODPL along with the source of funds for making payment of Rs.8,05,11,000/-. Thus the assessment was framed in accordance with the principles of natural justice and equity. IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 3 - 5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 6. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent.” 3. The brief facts of the case are that assessee filed original return of income on 15.09.2015 declaring total income at Rs. 1,60,75,880/-. A search was conducted in relation to Navratna Organisers & Developers Pvt. Ltd. (NODPL) on 23.09.2019. After recording of “satisfaction note” on 26.09.2019 a notice under Section 153C of the Act was issued to the assessee. The assessee filed return of income on 10.10.2019 declaring total income of Rs. 1,60,75,880/- in response to notice under Section 153C of the Act. The assessee is an individual and during the year under consideration, he derived income from house property, profit and gains from business or profession, capital gains and income from other sources. During the course of search action, certain data was found on laptop of Shri Murlidhar M. Trivedi. The data contend information for the period March 2014 to September 2014 and on analysis of data, it was noticed that the assessee had made payment aggregating to Rs. 8,05,11,000/- to NODPL as on-money for purchase of property. The assessee requested the Assessing Officer to provide the incriminating material found and seized in the case of the searched assessee. The Assessing Officer observed that the assessee has transaction with NODPL and assessee’s name figures in the seized details (as per assessee’s own submission the assessee had purchased unit No. 372 at KBG developed by NODPL). Further, NODPL has accepted that the seized data belongs to it’s transactions done with the assessee. Further, IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 4 - NODPL has accepted that if received on-money receipts from the assessee which have been recorded in the seized excel sheet and has offered the on- money receipts as income on sale of the very same units and an application before Income Tax Settlement Commission was also submitted accepting the on-money receipts as undisclosed income. Further, the excel sheet also clearly contains the name of the assessee and details of the on-money given by the assessee. In view of the above the Assessing Officer made an addition of Rs. 8,05,11,000/- in the hands of the assessee as unexplained income under Section 69C of the Act. 4. The assessee filed appeal before CIT(A) against the aforesaid order passed by the Assessing Officer. 5. In appeal, Ld. CIT(A) allowed the appeal of the assessee on the ground that the assessee was not provided copy of any incriminating material which would prove that assessee had paid unaccounted money to NODPL for the purchase of property. Further, the additions were made in the hands of the assessee on the basis of statement of parties, but the assessee was never provided an opportunity to cross-examine the parties on the basis of whose statement, additions were made in the hands of the assessee. The assessee has furnished all details of payment made by him for the purchase of plots and the construction thereon alongwith documentary evidences. The Assessing Officer has failed to link the notings of excel sheet with the details provided by the assessee. Further, the Affidavit of Mr. Murlidhar M. Trivedi also clearly indicates that the said transaction belongs to NODPL and not with respect to the assessee and therefore, no addition can be made on the basis of such Affidavit. The Assessing Officer IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 5 - has not been able to link the cheque payments made by the assessee with the cash payments and even with respect to borrowings etc. and therefore, the additions are not justified in absence of further evidences and lack of opportunity for cross-examination being granted to the assessee. Further, even in the affidavit of Shri Mr. Murlidhar M. Trivedi, it only states that the on-money belongs to NODPL, however, it does not become clear that how the assessee is linked with such on-money payment only on the basis of such affidavit. It is a settled legal position that additions cannot be made on the basis of mere jottings and notings and some corroborative evidence has to be brought on record to support the allegations. Accordingly, Ld. CIT(A) deleted the additions with the following observations:- “5.6 After considering all the relevant facts, observations of the AO and the submission of the appellant, I am of the view that the addition of Rs. 8,05,11,000/- made by the AO on the basis of excel file named “x10000106.xls” recovered from the back up computer data seized during the course of search u/s. 132 of the Act from the residence of the searched assessee namely Shri Murlidihar M. Trived, is not justified and not in accordance with the settled principles in the various decisions including that of Hon'ble Supreme Court. It is an undisputed fact that the excel file named "x10000106.xls" relied upon by the AO for making the addition, was found and seized from the searched assessee namely Shri Murlidhar M. Trivedi and not from the appellant. Hence, the primary onus to explain the said excel file is not on the appellant but on the person from whose possession it was found i.e. Shri Murlidhar M Trivedi. It is also an undisputed fact that during the course of assessment proceedings vide submission dated 23/12/2019, the appellant has categorically asked the AO that if he is in possession of any material and / or statement of any persons recorded during the course of IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 6 - search in case of searched assessee and the same is intended to be used against the appellant to draw adverse inference, then without providing the copy of such material and / or statements as well as without granting the opportunity of cross examination of the person whose statement is sought to be used against the appellant, no adverse inference can be drawn against the appellant on the basis of the said excel sheet named "x10000106.xls". From the assessment order, it can be seen that the AO has relied upon the affidavit of Shri Murlidhar M. Trivedi dated 4/12/2019, wherein he has stated that excel file named “x10000106.xls” belongs to Navratna Organisers & Developers Pvt. Ltd. The AO has also stated that NODPL has submitted an application u/s. 245D(1) of the Act before the Hon'ble Settlement Commission wherein they have submitted that the course of search operation at the residence of Murlidhar M. Trivedi an excel file named "x10000106.xls" was found which contained various notings and jottings. The excel sheet is for the period from March 2014 to September 2014. The Digital Data claimed to includes the-following : A) Receipt of on-money in respect of units booked. B) Refund of on-money upon receipt of cheque etc.". The AO has also relied upon the submission made by the NODPL wherein it has been accepted that the seized data belongs to its transaction and contains A) Receipts of on- money in respect of units booked B) refund of on-money upon receipt of cheque C) Payment of material D) Payment of labour/liasoning expenses E) Borrowing / Advances given etc. However, the facts remains that the AO has not provided any of the above materials / documents relied upon by him to the appellant for his rebuttal though, the appellant has categorically requested the AO to provide such materials / documents / statements etc. if any, for his rebuttal before drawing any adverse inference against him. On the contrary, the appellant has furnished all the details of payment made by him for the purchase of plots and the construction thereon along with the documentary evidences i.e. copies of the Booking Agreements, supplementary agreements IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 7 - and Conveyance Deeds. The AO has failed to link the notings of seized excel file named “x10000106.xls” with the details provided by the appellant. Further, the appellant has also requested the AO to provide the opportunity of cross examination of such person(s). Since the AO has relied upon the affidavit of Shri Murlidhar M. Trivedi dated 04/12/2019, he is a Departmental witness and the AO was duty bound to provide the copy of the affidavit as well as offer his cross examination to the appellant before drawing any adverse inference on the basis of such affidavit of Shri Murlidhar M. Trivedi. Further, it is a well settled principle of law that the onus lies on the person who alleges. In the present case, the AO has alleged for cash payment of Rs. 8,05,11,000/- by the appellant on the basis of the excel file named "x10000106.xls" found and seized from the searched assessee - Shri Murlidhar M. Trivedi. 5.7 I have also considered in detail the observations made by the AO and none of the three observations directly or indirectly, can be considered as evidence or even basis for making addition for the cash payment to NODPL. The Affidavit of Murlidhar M. Trivedi, has not been reproduced in its entirety in the assessment order and none the less, the observations of the AO with respect to Affidavit clearly indicate that the said transaction belonging to NODPL and not with respect to Appellant and therefore, the said Affidavit cannot be made the basis for the purpose of addition. Coming to NODPL’s Settlement Application u/s. 245D(1) of the Act, the observations of the AO clearly indicate that the notings pertaining to the business carried out by NODP which inter alia include payment for material, payment for labor/expenses, receipts of on money in respect of units booked and refund of on money upon receipt of cheque. In the entire assessment order, the receipt of cash has not been linked with respect to on-money in respect of units booked, such as total market value, cheque amount, cash element, comparable cases etc. and therefore, the same cannot be considered towards the on- IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 8 - money. The AO has made addition for cash payment but not towards on- money as explained in para No.3.10 of the assessment order. Therefore, it is not the case of the AO for making addition towards on-money. The AO has also not linked the cheque payment with respect to cash payment and even with respect to borrowing etc. and therefore, the addition even for cash payment is not justified in absence of further evidences and cross examination as the appellant has categorically denied having paid any amount. 5.8 Thus, the action of the AO is in sheer violation of principle of natural justice and against the ratio laid down by the Hon'ble Supreme Court and other course of law referred and relied upon by the appellant in this regard as reproduced herein above. Hon'ble Supreme Court in case of Andaman Timber Industries Vs. CCE (Supreme Court) (2015) 62 Taxmann.com 3, has held that "According to us, not allowing the assessee to cross examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. "Similarly, in case of CIT Vs. Sunita Dhhadda (SC), Hon'ble Supreme Court has observed that if the AO wants to rely upon documents found with third parties, the presumption u/s 292C against the assessee is not available. As per the principles of natural justice, the AO has to provide the evidence to the IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 9 - assessee & grant opportunity of cross-examination. Secondary evidences cannot be relied on as if neither the person who prepared the documents nor the witnesses are produced. The violation of natural justice renders the assessment void. The Dept cannot be given a second chance. In the present case of the appellant, the excel file named "x10000106.xls" was found and seized from Shri Murlidhar M. Trivedi, a third party and accordingly, in view of the above decision, the presumption u/s. 292C of the Act against the appellant is not available. 5.9 Therefore, there is no basis on the part of the AO to reach the conclusion that the transaction in question is unexplained money of the appellant. However, doubts and suspicions by themselves do not constitute evidences. The AO has to bring some material or other evidence on record on the basis of which he can state with certainty that the notings made in the excel sheet in fact reflects payments made by the appellant and which are unexplained and unaccounted in nature. Merely doubting the notings as to an actual transaction without any corroborative evidence cannot be the reason for sustaining an addition. The appellant has referred to the case of Common Cause (A Registered Society) vs. UOI (2017) 394 ITR 220 (SC) and Pradeep Amrutlal Runwal (2014) 149 ITD 548 (Pune) in support of his contention. 5.10 I agree with the contention of the appellant that even in the affidavit so furnished by the searched party i.e Shri Murlidhar Trivedi (copy of which has not been provided to the appellant) the only worthwhile clarification is that the transactions belong to NODPL. How, the appellant is connected with the excel sheet has not been clarified by Mr. Murlidhar Trivedi as would be observed on the perusal of the assessment order. It is a settled legal proposition that additions cannot be made on mere notings and jottings and some corroborative evidence has to be brought on record to support the allegation. IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 10 - In the case of Gyankumar Agarwal v ACIT (2012) 146 TTJ 334 (Hyd.) it was held that “ material considered by the Assessing Officer for making the addition was only the seized material which was a note book containing the details of day-to-day ledger accounts of various persons to whom the money was advanced. The Assessing Officer had to establish the link between the seized material and other books of account of the assessee. It could not be considered alone as conclusive evidence. The assessee as well as the assessee's son and also assessee's brother categorically stated at every stage of examination and statement recorded under section 132(1) or 132 that the seized material did not at all belong to them. In spite of this, the Assessing Officer proceeded to conclude that these seized materials conclusively belonged to the assessee. Leave alone the issue relating to authorship of the document seized, the department should find out and establish the nexus of those seized materials to the assessee's business while concluding block assessment. The allegation of the department was that the seized material reflected money lending business of the assessee. But they were not able to unearth any background with regard to the money lending business like loan agreement, promissory notes, security details, bank account receipts vouchers or any other corroborative evidence. There was no information from any party that they had taken loan from the assessee. There was no evidence as to whether they repaid the loans towards the principal amount and interest. The department cannot draw inference on the basis of suspicion, conjecture and surmise. Suspicion, however strong cannot take place of material in support of the findings of the Assessing Officer. The Assessing Officer without examining any party who had taken the loan from the assessee, could not come to the conclusion that the assessee lend money. No addition could be made on the basis of dumb documents/note book/loose slips found during search in the absence of any other material to show that the assessee had carried on money lending business. The evidence on record was not IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 11 - sufficient to support the revenue's case that huge money lending business had been carried on by the assessee outside the business of the assessee. In view of this, the block assessment order was set aside and the matter was remanded to the file of the Assessing Officer. In the case of Cosmos Infra Engineering (India) Ltd. v DCIT (2017) 58 ITR (T) 384 (Chd.) it was held that "Section 69 of the Income-tax Act, 1961 -Unexplained investments (Burden of proof) - Assessment year 2009-10 - No addition should be made in case of assessee on bast's of an entry found in account of third party from which neither it could be definitely said that name written therein was that of assessee nor any other evidence relating to above transaction had been found fin favour of assessee] In the case of Jawaharbhai Atmaram Hathiwala (2010) 128 TTJ (Ahd.)(UO) it was held that "Section 69 of the Income-tax Act, 1961 - Unexplained investments - Assessment year 1999-2000 - Where assessee was alleged to have paid a sum as 'on money' for purchase of flat but no evidence could be brought on record by Revenue to show that in fact assessee had paid 'on-money' to developers, and no document containing signature of assessee or handwriting of assessee to corroborate above making of payment by assessee was found during course of search, addition on account of such alleged payment was not justified fin favour of assessee] In the case of ACIT V Prabhat Oil Mills (1995) 52 TTJ 533 (And.) it was held that "As stated above the impugned addition has been made by the Assessing Officer on two grounds, viz., erratic yield of oil cake compared monthwise and secondly on the basis of some notings made in the note book found at the residential premises of one of the directors of the firm Hynoup during the course of search. In our view, both these points have been very ably discussed and analysed by the Commissioner (Appeals). As regards the yield a detailed chart was filed before the Assessing Officer and the IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 12 - Commissioner (Appeals) and the latter went through it threadbare and arrived at a conclusion that variation in the yield of monthwise and other allied factors were not Indication of the fact that the assessee had made sales of oil to Hynoup. We have also gone through this chart and agree with the findings of the Commissioner (Appeals). In addition to this a similar chart for the accounting year relevant to assessment year 1986-87 in the case of Pate/ Oil Mills & Ginning Factory was also produced before us. It is observed therefrom that the average yield over accounting year relevant to assessment year 1986-87 in the case of Patel Oil Mills was 13.33 per cent in case of cotton seed oil and 78.31 per cent in the case of cotton seed oil cake, whereas in the case of Prabhat Oil Mills (the assessee) the average yield is 13.37 per cent in case of cotton seed oil and in the case of cotton seed oil cake 80.61 per cent which is higher than that reflected by Patel Oil Mills. This all the more justifies the arguments discussed in detail by the learned Commissioner (Appeals) in his order before deleting the addition made by the Assessing Officer on this count. As regards the addition on the basis of certain notings in the seized diary from the residential premises of one of the directors of the said concern, it is noted that except relying on the entries in the said seized book the Assessing Officer has not brought any corroborative material on record to prove that such sales were made to Hynoup outside the books of account. When the assessee categorically denied of having made any sales to Hynoup except those recorded in its books of accounts, the onus was on the Assessing Officer to prove with corroborative evidence that the entries in the said seized book Actually represented the sales made by the assessee-firm to Hynoup. Mere entries in the accounts of a third party was not sufficient to prove that the assessee had indulged in such transactions as there was no guarantee that the entries were genuine. In this we are supported by the judgment of the Bombay High Court in the case of Addl. Commissioner v. Lata Mangeskar (1974) 97 ITR 696 (Bom). IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 13 - 5.11 In light of the above discussion and the settled position of law I agree with the arguments extended by the appellant that the addition is not sustainable particularly in light of the fact that the searched party has merely indicated that the documents in question belongs to NODPL. The AO has also not been able to bring any material or other evidence on record in support of the notings made that such amounts have actually been paid by the appellant to NODPL. 5.12 The appellant had also argued that any statement or other deposition made by Shri Murlidhar Trivedi on behalf NODPL would not have any evidentiary value whatsoever, particularly on account of the fact that he was not a Director or an authorised person of the aforesaid company. No adverse inference can be on the basis of any statement made by any person who is a stranger to the company to which the transaction is alleged to pertain. It was also submitted that in view of this fact Shri Murlidhar Trivedi would have no locus standi to make such statement which can implicate the appellant in any manner whatsoever and the fact cannot be ignored also that no such statement has also been made by him. Even Shri Murlidhar Trivedi, the searched party, had by way of an affidavit merely stated that the transactions in question pertained to NODPL and had never stated that the same are unaccounted or unexplained since he would neither be in a position to state that nor have any authority to make such statement.” 6. The Department is in appeal before us against the order passed by Ld. CIT(A) deleting the additions made by the Assessing Officer. Before us, Ld. CIT(A) primarily relied upon the observations made by the Assessing Officer in the assessment order. The Ld. D.R. submitted that in this case, it is an admitted fact that the assessee had purchased two plots from NODPL. Further, excel sheet was found in which the name of the assessee was IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 14 - mentioned and from the contents thereof, it was clear that the assessee had given on-money towards purchase of the aforesaid two flats. Further, NODPL had also offered the aforesaid income in its application filed with the Settlement Commission and paid taxes on such income. Therefore, from the facts of the case and the surrounding circumstances, it is evident that clearly the assessee had paid on-money towards purchase of two properties from NODPL. 7. In response, the Counsel for the assessee placed reliance on the observation made by the Ld. CIT(A) in the appellate order. 8. On going through the facts of the instant case and the arguments put forth before us by both parties, we are inclined to agree with the view taken by Ld. CIT(A) in the appellate order. Firstly , the additions have been made on the basis of excel sheet found at the premises of the third party i.e. Mr. Murlidhar M. Trivedi. However, apart from the fact that the name of the assessee has been mentioned in the aforesaid excel sheet, there is no further corroborative evidence which substantiates that the assessee had in fact made on-money payment with respect to the aforesaid two properties. Secondly , admittedly, the assessee had furnished all relevant documents viz. copies of agreements, details of cheque payments etc. towards purchase of the aforesaid two products. Thirdly, it is a settled law that additions cannot be made solely on the basis of notings / jottings in relation toward transaction, without any corroborative evidence for sustaining the addition. In the case of Rajvee Tractors Pvt. Ltd. 143 taxmann.com 330 , the Ahmedabad ITAT held that where the Assessing Officer made additions in the hands of the assessee company on the basis of draft sale deed of IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 15 - property between the assessee company and a developer on purchase of property being reported less / short by it, and the said draft deed was never signed by the assessee and application by the developer before Settlement Commission admitting to have invested certain amount of unaccounted income was not provided to the assessee for confrontation, impugned additions were directed to be deleted. In the case of Gordhanbhai Talavia 146 taxmann.com 528, the ITAT held that where the Assessing Officer made additions to income of the assessee on the basis of certain loose papers recovered during search, however, no enquiry was conducted or independent evidence was brought on record, being corroborative evidence to connect seized material with the assessee, there was no infirmity or illegality in the order passed by Commissioner (Appeals) in deleting the addition. In the case of Pradeep Amrutlal Runwal 47 taxmann.com 293, the ITAT held that where the Assessing Officer made additions in the case of the assessee on the basis of notings in loose papers found during the search proceedings in case of third party against the name of assessee, as there was no evidence to suggest that payments were made by the assessee additions so made were not justified. In the case of Regency Mahavir Properties 89 taxmann.com 444, the ITAT held that no addition under Section 69 can be made on the basis of documents being found from premises of third party in absence of any document evidencing the fact that assessee had paid any cash as on-money to said party for purchase of property. In the case of Vinit Ranawat 88 taxmann.com 428 , the ITAT held that no addition can be made in the hands of the assessee on the basis of papers found with the third party when there was no business connection between the assessee and that third party. Fourthly, it is a settled principle IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 16 - of law that no addition can be made on the basis of statement of a third party, without allowing the assessee an opportunity of cross-examining the person on the basis of whose statement the addition has been made. The Hon’ble Supreme Court in the case of Andaman Timber Industries 62 taxmann.com 3 (SC), held that when statements of witnesses are made the basis of demand, not allowing the assessee to cross-examine the witness is a serious flaw which makes order a nullity, as it amounts to violation of principles of natural justice. In the case of CIT vs. Sunita Dhadda 100 taxmann.com 526, the Hon’ble Supreme Court dismissed the Department’s SLP against order of High Court holding that where Assessing Officer while making addition on account of on-money received by the assessee on sale of land to a builder group relied upon statement of Director of builder and did not allow the assessee to cross-examine the said Director, there being violation of principle of natural justice, impugned addition was liable to be deleted. In the instant facts despite a specific request made by the assessee to cross-examine the person on the basis of whose statement the addition was made, such opportunity of cross-examination was not granted to the assessee. Fifthly, we also observed that the Assessing Officer in the assessment order has not brought out the locus standi of Mr. Murlidahr M. Trivedi, on the basis of whose statement the addition were made in the hands of the assessee. Mr. Murlidhar M. Trivedi in his affidavit merely stated that the transactions in question pertained to NODPL and from his statement, it is not clear as to how Mr. Murlidhar M. Trivedi is related to NODPL since neither is he a Director or a Authorized person or an employee of NODPL. Even during the course of arguments before us, the Ld. DR has not been able to verify the relationship between Mr. Murlidhar IT(SS)A No. 99/Ahd/2021 DCIT vs. Shri Jayprakash A Keshwani Asst. Year –2015-16 - 17 - M. Trivedi and NODPL. Therefore, it is not clear as to what evidentiary value does the statement of Shri Murlidahr M. Trivedi carry and what is his “locus standi” to make such statement which can implicate the assessee. 9. Accordingly, looking into the instant facts, our observations in the preceding paragraphs and judicial precedents on the subject, we do not find any infirmity in the order of Ld. CIT(A) so as to call for any interference. 10. In the result, the appeal of the Department is dismissed. This Order pronounced in Open Court on 31/08/2023 Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 31/08/2023 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 28.08.2023 2. Date on which the typed draft is placed before the Dictating Member 29.08.2023 3. Other Member..................... 4. Date on which the approved draft comes to the Sr.P.S./P.S 29.08.2023 5. Date on which the fair order is placed before the Dictating Member for pronouncement .08.2023 6. Date on which the fair order comes back to the Sr.P.S./P.S 31.08.2023 7. Date on which the file goes to the Bench Clerk 31.08.2023 8. Date on which the file goes to the Head Clerk.......................................... 9. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 10. Date of Despatch of the Order..........................................