PINNATHEVAR PALANICHAMY,MADURAI V. DCIT, CC-1(2), CHENNAI

CO 4/CHNY/2025

AI Insights

The case revolves around an appeal by the Revenue against the decision of the CIT(A) which had deleted an addition of Rs.20 Crores made by the AO. The addition was based on the alleged on-money received by the assessee from the sale of immovable property. The AO had relied on the statement of Shri R. Sabapathy and the contents of a seized pocket diary, which were later retracted and found to be vague and uncorroborated. The Tribunal examined the evidentiary value of the original statement and the retraction, along with the contents of the seized material, and concluded that the CIT(A) was correct in deleting the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312630 (ITAT-CHENNAI)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-04-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2021-2022
• Other Referred Cases: Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18, Rajagopal Saravanan v. DCIT, M.M. Motors & General Stores (P.) Ltd. v. DCIT, Addl. CIT v. Miss Lata Mangeshkar [1974] 97 ITR 696
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIVANAND K. KALAKERI
• Assessee Lawyers: G. BASKAR; WAY OF CAPITAL GAINS; WAY OF CAPITAL GAINS; ANY PARTY; ANY PARTY
• Keywords: Set aside; Revised return; Cost of acquisition; Document seized; Documents seized; Onus to prove; Retraction; Capital Gains; Third party statement; Search and seizure; Block assessment; Loose papers; Opportunity of cross examination; Tangible material
• Section: 132

Judgement Text

" आयकर अपीलीय अिधकरण, ‘ए’\u0001यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI \u0001ी एबी टी. वक , ाियक सद\u0011 एवं एवं एवं एवं \u0001ी अिमताभ शु\u0018ा, लेखा सद क े सम\u001b BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकरअपीलसं./ITA No.3015/Chny/2024 & Cross-Objection No.4/Chny/2025 िनधा\u000eरणवष\u000e/Assessment Year: 2021-22 The DCIT, Central Circle-1(2), Chennai. v. Mr.Pinnathevar Palanichamy, 379, Sarveswarar Kovil Street, Anna Nagar, Madurai-625 020. [PAN: ACYPP 6565 H] (अपीलाथ\u0016/Appellant) (\u0017\u0018यथ\u0016/Respondent/Cross- Objector) Department by : Mr.Shivanand K. Kalakeri, CIT Assessee by : Mr.G. Baskar, Advocate सुनवाईक तारीख/Date of Hearing : 26.02.2025 घोषणाक तारीख /Date of Pronouncement : 29.04.2025 आदेश / O R D E R PER ABY T. VARKEY, JM: This appeal has been preferred by the Revenue and Cross Objections filed by the assessee are against the order of the Learned Commissioner of Income Tax (Appeals), (hereinafter referred to as “the Ld.CIT(A)”), Chennai-18, dated 27.09.2024 for the Assessment Year (hereinafter referred to as \"AY”) 2021-22. 2. The main grievance of the Revenue is against the action of the Ld.CIT(A) deleting the addition of Rs.20 Crores, made by AO a money received by the assessee for sale of immovable property at Madurai. 3. The brief facts are that, the assessee is an individual engaged in transport business and sale of granite blocks. A search u/s. 132 of the Income Tax Act, 1961 (herein on 01.12.2021 upon M/s. Saravana Stores (Textiles) and its related entities and their Managing Director (MD) of the Group, Shri R. Sabapathy. The AO noted that, during the course of search, a pocket book was found in the possession of Mr. Antony Francis Julian [Asst. Manager, Purchase Department of M/s.Saravana Stores (Textiles)] which was seized and marked as [ANN/SK/SSSLLP/B&D/S the said pocket-book, certain numbers were jotted down. Whe about these noting’s, Shri Julian stated that, he had been maintaining the pocket-book for his MD, Shri R. Sabapathy, to record the loans taken by him from M/s. Swarna Shilipi. The AO observed that, the said statement of Shri Julian along with Sabapathy on 04.12.2021, wherein, he initially explained that, the noting’s therein related to the loan of Rs.25 crores which he had received from Mr. Rakesh of M/s. Swarna Shilipi in December, 2020 and, out of ITA No. Mr.Pinnathevar Palanichamy ::2 :: The main grievance of the Revenue is against the action of the Ld.CIT(A) deleting the addition of Rs.20 Crores, made by AO a received by the assessee for sale of immovable property at The brief facts are that, the assessee is an individual engaged in transport business and sale of granite blocks. A search u/s. 132 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) was conducted on 01.12.2021 upon M/s. Saravana Stores (Textiles) and its related entities and their Managing Director (MD) of the Group, Shri R. Sabapathy. The AO noted that, during the course of search, a pocket ound in the possession of Mr. Antony Francis Julian [Asst. Manager, Purchase Department of M/s.Saravana Stores (Textiles)] which was seized and marked as [ANN/SK/SSSLLP/B&D/S-2]. At Page No. 61 of book, certain numbers were jotted down. Whe , Shri Julian stated that, he had been maintaining the book for his MD, Shri R. Sabapathy, to record the loans taken by him from M/s. Swarna Shilipi. The AO observed that, the said statement of Shri Julian along with pocket book was confronted to the MD, Shri R. Sabapathy on 04.12.2021, wherein, he initially explained that, the therein related to the loan of Rs.25 crores which he had received from Mr. Rakesh of M/s. Swarna Shilipi in December, 2020 and, out of ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy The main grievance of the Revenue is against the action of the Ld.CIT(A) deleting the addition of Rs.20 Crores, made by AO alleging on- received by the assessee for sale of immovable property at The brief facts are that, the assessee is an individual engaged in transport business and sale of granite blocks. A search u/s. 132 of the after referred to as ‘the Act‘) was conducted on 01.12.2021 upon M/s. Saravana Stores (Textiles) and its related entities and their Managing Director (MD) of the Group, Shri R. Sabapathy. The AO noted that, during the course of search, a pocket- ound in the possession of Mr. Antony Francis Julian [Asst. Manager, Purchase Department of M/s.Saravana Stores (Textiles)] which 2]. At Page No. 61 of book, certain numbers were jotted down. When enquired , Shri Julian stated that, he had been maintaining the book for his MD, Shri R. Sabapathy, to record the loans taken by him from M/s. Swarna Shilipi. The AO observed that, the said statement pocket book was confronted to the MD, Shri R. Sabapathy on 04.12.2021, wherein, he initially explained that, the therein related to the loan of Rs.25 crores which he had received from Mr. Rakesh of M/s. Swarna Shilipi in December, 2020 and, out of which, he had paid Rs.20 crs. to the assessee for purchase of land at Madurai which was acquired for a total price of Rs sum of Rs. 5 crores was purchased by his sister at Perambur for a total price of Rs.21 Crs. 4. Thereafter, the AO confronted the assessee on 21.12.2021 with the noting’s in the pocket Sabapathy; and the assessee on-money of Rs.20 Cr from Shri R. Sabapathy on sale of the land at Madurai. The assessee further explained that, he along with his two sons & his sister’s son [viz., four (4) co question admeasuring 249 cents on 22.01.2021 to Shri R. Sabapathy for a sale- consideration of Rs.49,70,04,000/ which in its entirety was paid by him by way of De given in sale-deed) and that no portion was paid in cash, and that the entire sale consideration formed part of their books of accounts. The assessee also pointed out that, the guideline value of the property was only Rs.2,010/- per sq whereas, the property was sold for Rs.19,96,000/ than double the guideline value [i.e. 2.28 times more than the guideline value]; for which the purchaser had also incurred additional char way of stamp duty & registration charges of Rs.5,46,78,440/ ITA No. Mr.Pinnathevar Palanichamy ::3 :: which, he had paid Rs.20 crs. to the assessee for purchase of land at Madurai which was acquired for a total price of Rs.50 Crs. and further was paid by him to Shri R. Saravanan purchased by his sister at Perambur for a total price of Rs.21 Crs. the AO confronted the assessee on 21.12.2021 with the in the pocket-book as well as the statement of Shri R. and the assessee, categorically denied having received any money of Rs.20 Cr from Shri R. Sabapathy on sale of the land at Madurai. The assessee further explained that, he along with his two sons ter’s son [viz., four (4) co-owners] had sold the property in question admeasuring 249 cents on 22.01.2021 to Shri R. Sabapathy for consideration of Rs.49,70,04,000/- (approximately Rs.50 crores), which in its entirety was paid by him by way of Demand Drafts (details deed) and that no portion was paid in cash, and that the entire sale consideration formed part of their books of accounts. The assessee also pointed out that, the guideline value of the property was per sq.ft. which works out to Rs.8,76,360/ whereas, the property was sold for Rs.19,96,000/- per cent viz., more than double the guideline value [i.e. 2.28 times more than the guideline value]; for which the purchaser had also incurred additional char way of stamp duty & registration charges of Rs.5,46,78,440/ ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy which, he had paid Rs.20 crs. to the assessee for purchase of land at .50 Crs. and further Shri R. Saravanan for the land purchased by his sister at Perambur for a total price of Rs.21 Crs. the AO confronted the assessee on 21.12.2021 with the as well as the statement of Shri R. categorically denied having received any money of Rs.20 Cr from Shri R. Sabapathy on sale of the land at Madurai. The assessee further explained that, he along with his two sons owners] had sold the property in question admeasuring 249 cents on 22.01.2021 to Shri R. Sabapathy for (approximately Rs.50 crores), mand Drafts (details deed) and that no portion was paid in cash, and that the entire sale consideration formed part of their books of accounts. The assessee also pointed out that, the guideline value of the property was .ft. which works out to Rs.8,76,360/- per cent, per cent viz., more than double the guideline value [i.e. 2.28 times more than the guideline value]; for which the purchaser had also incurred additional charges by way of stamp duty & registration charges of Rs.5,46,78,440/- and that the final purchase cost for Shri R. Sabapathy worked out to the tune of Rs.Rs.55,16,82,440/-. According to him therefore, there could not be any question/allegation of understate also brought to the notice of the AO that, later on, Shri R. Sabapathy on 21.03.2022 (within 3 months of search) stated that, the noting’s made by him which were parked and that he had not paid any further sum to the assessee, apart from the agreed consideration of Rs.49.70 crores plus stamp duty charges. The assessee submitted a second re Sabapathy dated 05.12.2022 which was a sworn affidavit filed before notary public wherein he had affirmed that, he has purchased the property situated at Madurai on 22.01.2021 for a total cost of Rs.55,16,82,440/- which includes Rs.5,46,78,440/- and gave the details of the said property at Madurai purchased from assessee & others, and also asserted that he did any cash consideration (on the registered Sale-Deed. Shri R. Sabapathy in his sworn affidavit also explained the reasons for his retraction from his original statement given on 04.12.2021, which according to him, was given under tremendous pressure he was undergoing during search and that, he was not right frame of mind when his statement was recorded u/s.132(4) of the ITA No. Mr.Pinnathevar Palanichamy ::4 :: the final purchase cost for Shri R. Sabapathy worked out to the tune of . According to him therefore, there could not be any allegation of understatement of sale consideration. The assessee also brought to the notice of the AO that, later on, Shri R. Sabapathy on 3 months of search) has retracted his statement and noting’s in the pocket book related to the cash sales made by him which were parked with Mr.Rakesh of M/s.Swarna and that he had not paid any further sum to the assessee, apart from the agreed consideration of Rs.49.70 crores plus stamp duty charges. The assessee submitted a second retracted statement of Shri R Sabapathy dated 05.12.2022 which was a sworn affidavit filed before notary public wherein he had affirmed that, he has purchased the property situated at Madurai on 22.01.2021 for a total cost of which includes registration charges of and gave the details of the said property at Madurai purchased from assessee & others, and also asserted that he did any cash consideration (on-money) over and above what is mentioned in Deed. Shri R. Sabapathy in his sworn affidavit also explained the reasons for his retraction from his original statement given on 04.12.2021, which according to him, was given under tremendous pressure he was undergoing during search and that, he was not right frame of mind when his statement was recorded u/s.132(4) of the ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy the final purchase cost for Shri R. Sabapathy worked out to the tune of . According to him therefore, there could not be any ment of sale consideration. The assessee also brought to the notice of the AO that, later on, Shri R. Sabapathy on has retracted his statement and in the pocket book related to the cash sales Mr.Rakesh of M/s.Swarna Shilipi, and that he had not paid any further sum to the assessee, apart from the agreed consideration of Rs.49.70 crores plus stamp duty & registration tracted statement of Shri R Sabapathy dated 05.12.2022 which was a sworn affidavit filed before notary public wherein he had affirmed that, he has purchased the property situated at Madurai on 22.01.2021 for a total cost of registration charges of and gave the details of the said property at Madurai purchased from assessee & others, and also asserted that he didn’t pay money) over and above what is mentioned in Deed. Shri R. Sabapathy in his sworn affidavit also explained the reasons for his retraction from his original statement given on 04.12.2021, which according to him, was given under tremendous pressure he was undergoing during search and that, he was not in the right frame of mind when his statement was recorded u/s.132(4) of the Act. The assessee accordingly submitted before the AO, that no adverse inference should be drawn against him on the basis of such retracted statement of the MD which was recorded when it was not backed by any corroborative evidence in as much as the noting’s in the pocket-book was dumb in nature. 5. The AO however rejected the submissions of the assessee holding it to be an after-thought to avoid tax statement given by Shri R. Sabapathy explaining the contents of the noting’s in the pocket- reliable as the dates mentioned therein correlated with the date of purchase of property at Madurai and therefore according to him, the contents of the seized material supported the original version of Shri R. Sabapathy that, he had availed cash loan of Rs.25 crores from Mr. Rakesh of M/s. Swarna Shilipi and out of which he had paid R assessee as on-money for the purchase of immovable property. With these observations, the AO added the impugned sum of Rs.20 crores by way of on-monies received by the assessee on sale of his property and assessed the same to tax by way aggrieved by the order of the AO, the assessee preferred an appeal before the Ld. CIT(A) who was pleased to delete the same by observing as under: - ITA No. Mr.Pinnathevar Palanichamy ::5 :: Act. The assessee accordingly submitted before the AO, that no adverse inference should be drawn against him on the basis of such retracted statement of the MD which was recorded on mistaken fact, particularly when it was not backed by any corroborative evidence in as much as the book was dumb in nature. The AO however rejected the submissions of the assessee holding it thought to avoid taxes. According to the AO, the original statement given by Shri R. Sabapathy explaining the contents of the -diary seized during the search proceedings was reliable as the dates mentioned therein correlated with the date of property at Madurai and therefore according to him, the contents of the seized material supported the original version of Shri R. Sabapathy that, he had availed cash loan of Rs.25 crores from Mr. Rakesh of M/s. Swarna Shilipi and out of which he had paid Rs.20 crores to the money for the purchase of immovable property. With these observations, the AO added the impugned sum of Rs.20 crores by monies received by the assessee on sale of his property and assessed the same to tax by way of long-term capital gains. Being aggrieved by the order of the AO, the assessee preferred an appeal before the Ld. CIT(A) who was pleased to delete the same by observing ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy Act. The assessee accordingly submitted before the AO, that no adverse inference should be drawn against him on the basis of such retracted on mistaken fact, particularly when it was not backed by any corroborative evidence in as much as the The AO however rejected the submissions of the assessee holding it es. According to the AO, the original statement given by Shri R. Sabapathy explaining the contents of the diary seized during the search proceedings was reliable as the dates mentioned therein correlated with the date of property at Madurai and therefore according to him, the contents of the seized material supported the original version of Shri R. Sabapathy that, he had availed cash loan of Rs.25 crores from Mr. Rakesh s.20 crores to the money for the purchase of immovable property. With these observations, the AO added the impugned sum of Rs.20 crores by monies received by the assessee on sale of his property and term capital gains. Being aggrieved by the order of the AO, the assessee preferred an appeal before the Ld. CIT(A) who was pleased to delete the same by observing “5. Decision: I have perused the assessment order, grounds of appeal, wri of the appellant, evidences filed before the Assessing Officer & during appeal proceedings and the case laws relied upon. In the first place, as evidenced from the assessment order, the case of the appellant was taken up for scrutiny as per prevalent guidelines since certain information relating to the assessee was found during the course of search in Saravana Stores Tex Group cases on 01.12.2021. Now coming to the said information, which are contents of pocket diary seized and marked as AN for the sake of ready reference. 5.1 From the above contents, it can be seen that there is reference to some. figures with dates and months (not years) and there is no mention of any names, notto speak of the appellant. However, the contents of the said page were explained Initially as cash loans by the person (Sri R. Sabapathy), on whose behalf such entries were made. Therefore, precisely no seized material having any direct reference to However, while explaining the contents, Sri R. Sabapathy, MD of the searched group companies, in a statement recorded u/s 132(4) on 04.12.2021 explained that he had received a total amount of Rs.25 crores a ITA No. Mr.Pinnathevar Palanichamy ::6 :: I have perused the assessment order, grounds of appeal, written submissions of the appellant, evidences filed before the Assessing Officer & during appeal proceedings and the case laws relied upon. In the first place, as evidenced from the assessment order, the case of the appellant was taken up for scrutiny r prevalent guidelines since certain information relating to the assessee was found during the course of search in Saravana Stores Tex Group cases on 01.12.2021. Now coming to the said information, which are contents of pocket diary seized and marked as ANN/SK/SSSLLP/B&D/S-2, are copied hereunder for the sake of ready reference. 5.1 From the above contents, it can be seen that there is reference to some. figures with dates and months (not years) and there is no mention of any es, notto speak of the appellant. However, the contents of the said page were explained Initially as cash loans by the person (Sri R. Sabapathy), on whose behalf such entries were made. Therefore, precisely no seized material having any direct reference to the appellant was found in the course of search. However, while explaining the contents, Sri R. Sabapathy, MD of the searched group companies, in a statement recorded u/s 132(4) on 04.12.2021 explained that he had received a total amount of Rs.25 crores as loan from Sri Rakesh ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy tten submissions of the appellant, evidences filed before the Assessing Officer & during appeal proceedings and the case laws relied upon. In the first place, as evidenced from the assessment order, the case of the appellant was taken up for scrutiny r prevalent guidelines since certain information relating to the assessee was found during the course of search in Saravana Stores Tex Group cases on 01.12.2021. Now coming to the said information, which are contents of pocket 2, are copied hereunder 5.1 From the above contents, it can be seen that there is reference to some. figures with dates and months (not years) and there is no mention of any es, notto speak of the appellant. However, the contents of the said page were explained Initially as cash loans by the person (Sri R. Sabapathy), on whose behalf such entries were made. Therefore, precisely no seized material the appellant was found in the course of search. However, while explaining the contents, Sri R. Sabapathy, MD of the searched group companies, in a statement recorded u/s 132(4) on 04.12.2021 explained s loan from Sri Rakesh Kumar and paid Rs.20 crores in cash to the appellant towards purchase consideration of Madurai lands and balance Rs.5 crores to Sri Rajagopal Saravanan towards purchase of Perambur property. 5.2 Now, the moot for consideration is whe by Sri R.Sabapathy on 04.12.2021 making a direct reference to the appellant that he had given Rs.20 crores in cash in respect of purchase of land considered as seized material and evidentiary value can be atta substantive addition can be made in the hands of a third party. Before venturing into this discussion, it is pertinent to make a distinction between the statement given under oath by a person about his own transactions and making statements which will have a bearing on the income determination of other third persons in the case on hand, the statement made by Sri R. Sabapathy u/s 132(4), corffains some disclosure about his income details and also the transactions he made with the appellant. Tho importance can be attached to the statement recorded u/s 132(4) during search and seizure operations by Sri R. Sabapathy, it is also equally important to note that there is no seized material having direct or even tacit reference to the appellant, but the searched person had given a statement u/s 132(4), initially admitting that he had paid cash to the appellant. It is settled law that the contents of a statement, though given INCOME TAX DEPARTMEN Such without any further under oath u/s 132 corroborative evidence. 5.3 At this stage, it is important to refer to the reliance placed by the appellant on the decision of the Apex Court in the case of Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18 AO in the assessment as not applicable to the facts of the case. In this case, the Apex Court held that though admission is an extremely important piece of evidence, it cannot be said to be conclusive and the maker can show was incorrect In this regard, the appellant had done his part in proving the contents of admission of Sri R. Sabapathy as not correct, by providing actual sale details. In the statement given u/s 132(4), Sri R. Sabapathy mentioned that the properties from the appellant were purchased for an amount of Rs.50 crores, out of which Rs.20 crores was paid in cash. Relevant portion of the statement recorded from Sri R. Sabapathy on 04.12.2021 is as under: Q.56 Please give the deals of the immovable proper cash loan of Rs.25 Crs. was paid by you. Please also furnish the persons to whom the payments were made by you out of this love of Rs.25 Crores A As already stated by me in my sworn statement, properties at Perambur and Madurai were 2020 and January 2021. The property at Perambur was purchased for my sister Smt. Selvalkumari for a consideration of Rs.21 Crores out of which Rs. 16 Crowes was the Registered Value which was met out of my father's Rental In paid by me is cash to Shri R. Saravanan of Saravana Hotels group Similarly, the property at Madurai was purchased for a consideration of Rs.50 Crores (appear) of which Rs.30 Crores was paid by me in cash. 5.4 Going by the contents of the above version, during the course of assessment proceedings, the Assessing Officer also questioned the appellant ITA No. Mr.Pinnathevar Palanichamy ::7 :: Kumar and paid Rs.20 crores in cash to the appellant towards purchase consideration of Madurai lands and balance Rs.5 crores to Sri Rajagopal Saravanan towards purchase of Perambur property. 5.2 Now, the moot for consideration is whether the statement given u/s 132(4) by Sri R.Sabapathy on 04.12.2021 making a direct reference to the appellant that he had given Rs.20 crores in cash in respect of purchase of land considered as seized material and evidentiary value can be attached, so that substantive addition can be made in the hands of a third party. Before venturing into this discussion, it is pertinent to make a distinction between the statement given under oath by a person about his own transactions and hich will have a bearing on the income determination of other third persons in the case on hand, the statement made by Sri R. Sabapathy u/s 132(4), corffains some disclosure about his income details and also the transactions he made with the appellant. Though considerable importance can be attached to the statement recorded u/s 132(4) during search and seizure operations by Sri R. Sabapathy, it is also equally important to note that there is no seized material having direct or even tacit reference to pellant, but the searched person had given a statement u/s 132(4), initially admitting that he had paid cash to the appellant. It is settled law that the contents of a statement, though given INCOME TAX DEPARTMEN Such without any further under oath u/s 132(4), cannot be considered as 5.3 At this stage, it is important to refer to the reliance placed by the appellant on the decision of the Apex Court in the case of Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18, which was brushed aside by the AO in the assessment as not applicable to the facts of the case. In this case, the Apex Court held that though admission is an extremely important piece of evidence, it cannot be said to be conclusive and the maker can show was incorrect In this regard, the appellant had done his part in proving the contents of admission of Sri R. Sabapathy as not correct, by providing actual sale details. In the statement given u/s 132(4), Sri R. Sabapathy mentioned ies from the appellant were purchased for an amount of Rs.50 crores, out of which Rs.20 crores was paid in cash. Relevant portion of the statement recorded from Sri R. Sabapathy on 04.12.2021 is as under: Please give the deals of the immovable properties for which this cash loan of Rs.25 Crs. was paid by you. Please also furnish the persons to whom the payments were made by you out of this love of Rs.25 Crores As already stated by me in my sworn statement, properties at Perambur and Madurai were purchased by me during December 2020 and January 2021. The property at Perambur was purchased for my sister Smt. Selvalkumari for a consideration of Rs.21 Crores out of which Rs. 16 Crowes was the Registered Value which was met out of my father's Rental Income and Rs.5 Crores was paid by me is cash to Shri R. Saravanan of Saravana Hotels group Similarly, the property at Madurai was purchased for a consideration of Rs.50 Crores (appear) of which Rs.30 Crores was paid by me in cash. contents of the above version, during the course of assessment proceedings, the Assessing Officer also questioned the appellant ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy Kumar and paid Rs.20 crores in cash to the appellant towards purchase consideration of Madurai lands and balance Rs.5 crores to Sri Rajagopal ther the statement given u/s 132(4) by Sri R.Sabapathy on 04.12.2021 making a direct reference to the appellant - that he had given Rs.20 crores in cash in respect of purchase of land - can be ched, so that substantive addition can be made in the hands of a third party. Before venturing into this discussion, it is pertinent to make a distinction between the statement given under oath by a person about his own transactions and hich will have a bearing on the income determination of other third persons in the case on hand, the statement made by Sri R. Sabapathy u/s 132(4), corffains some disclosure about his income details and ugh considerable importance can be attached to the statement recorded u/s 132(4) during search and seizure operations by Sri R. Sabapathy, it is also equally important to note that there is no seized material having direct or even tacit reference to pellant, but the searched person had given a statement u/s 132(4), initially admitting that he had paid cash to the appellant. It is settled law that the contents of a statement, though given INCOME TAX DEPARTMEN Such (4), cannot be considered as 5.3 At this stage, it is important to refer to the reliance placed by the appellant on the decision of the Apex Court in the case of Pullangode Rubber Produce , which was brushed aside by the AO in the assessment as not applicable to the facts of the case. In this case, the Apex Court held that though admission is an extremely important piece of evidence, it cannot be said to be conclusive and the maker can show that it was incorrect In this regard, the appellant had done his part in proving the contents of admission of Sri R. Sabapathy as not correct, by providing actual sale details. In the statement given u/s 132(4), Sri R. Sabapathy mentioned ies from the appellant were purchased for an amount of Rs.50 crores, out of which Rs.20 crores was paid in cash. Relevant portion of the ties for which this cash loan of Rs.25 Crs. was paid by you. Please also furnish the persons to whom the payments were made by you out of this love As already stated by me in my sworn statement, properties at purchased by me during December 2020 and January 2021. The property at Perambur was purchased for my sister Smt. Selvalkumari for a consideration of Rs.21 Crores out of which Rs. 16 Crowes was the Registered Value which come and Rs.5 Crores was bhavan Hotels group Similarly, the property at Madurai was purchased for a consideration of Rs.50 Crores (appear) of which Rs.30 Crores contents of the above version, during the course of assessment proceedings, the Assessing Officer also questioned the appellant vide notice u/s 142(1), dated 10.11.2022 on paying the total accounted consideration at Rs.30 crores and on evidenced by the sale deeds furnished, the total sale consideration received by the appellant, along with his relatives, is Rs.49,70,04,000/ amount was received through DDs. Therefore, it is clear that the deposition of Sri R. Sabapathy made u/s 132(4) on 04.12.2021 is not totally correct and suffers with certain infirmities, and therefore the same cannot be given full credence. However, on the part of the Assessing Officer, no independent verification was done to ascertain the Sabapathy, and basing on such deposition alone, the AO proceeded to question the appellant. Even after obtaining the facts contrary to the version of Sri R. Sabapathy, the same were not considered and the retraction of Sr also was brushed aside, quoting obvious reasons: Now coming to the facts of the case, Sn R. Sabapathy had retracted from his statement recorded on 04.12.2021 vide his retraction letter dated 21.03.2022, i.e., after a period of two months; and the amounts mentioned in the seized material are not loans but the same are parking of funds with Sri Rakesh Kumar, he. has not paid any amount in cash to the appellant. However, the AO had not given any credence to the retraction of Sri R. Sab treat the amount of Rs.20 crores as undisclosed capital gains in the hands of the appellant. 8.5 Keeping the discussion on the present assessment aside for the time being, it is in place to refer to the balance amount of Rs.5 crore given to Sri Rajagopal Saravanan by Sri R. Sabapathy towards acquisition of Perambur lands. The contents of the said seized diary were put to scrutiny by the Hon'ble Tribunal in the case of Rajagopal Saravanan, for the Asst. Year 2021-22, in ITA No. 119/CHNY/2024 dt.10.07.2024. The observations and findings of the Tribunal are as under: \"5. From the fact, it emerges that pursuant to search action u/s 132, a notebook was found which, inter obtained by Shri R.S entries. Based on the statement of Shri R.Sabapathy, Ld. AO alleged that Shri R.Sabapathy received loan of Rs.25 Crores from Shri Rakesh of Swarna Shilpi out of which an amount of Rs.5 Crores was utilized as payment to assessee as on property by his sister. However, this statement was retracted within a span of 3 months....... Shri R.Sabapathy has taken contrary stand and his statement could not be held to be credible one.... of Shri R.Sabapathy was modified within a short span of time and therefore, the same could not be accepted as credible one. No concrete reliance could be placed on the same to make impugned addition in the absence of any other evidence on 5.6 As could be seen from the above, the Tribunal had not considered the contents of the seized diary as such, in the absence of any other evidence brought on record by the Assessing Officer. When the contents of the seized diary regarding payment of Rs.5 crores to Sri Rajagopal could not stand the test of appeal, no different view can be taken in respect of the balance amount of Rs.20 crores, purported to have been given to the appellant. 5.7 To conclude, in the first place, there is no se reference to the name of the appellant or the transactions made by the appellant with the searched party. Secondly, the case was taken up for ITA No. Mr.Pinnathevar Palanichamy ::8 :: vide notice u/s 142(1), dated 10.11.2022 on paying the total accounted consideration at Rs.30 crores and on-money of Rs.20 crores/However, as evidenced by the sale deeds furnished, the total sale consideration received by the appellant, along with his relatives, is Rs.49,70,04,000/- and the total amount was received through DDs. Therefore, it is clear that the deposition of Sabapathy made u/s 132(4) on 04.12.2021 is not totally correct and suffers with certain infirmities, and therefore the same cannot be given full credence. However, on the part of the Assessing Officer, no independent verification was done to ascertain the veracity of the contents of Sri R. Sabapathy, and basing on such deposition alone, the AO proceeded to question the appellant. Even after obtaining the facts contrary to the version of Sri R. Sabapathy, the same were not considered and the retraction of Sri Sabapathy also was brushed aside, quoting obvious reasons: Now coming to the facts of the case, Sn R. Sabapathy had retracted from his statement recorded on 04.12.2021 vide his retraction letter dated 21.03.2022, i.e., after a period of two months; and stated that the amounts mentioned in the seized material are not loans but the same are parking of funds with Sri Rakesh Kumar, he. has not paid any amount in cash to the appellant. However, the AO had not given any credence to the retraction of Sri R. Sabapathy and proceeded to treat the amount of Rs.20 crores as undisclosed capital gains in the hands of the appellant. 8.5 Keeping the discussion on the present assessment aside for the time being, it is in place to refer to the balance amount of Rs.5 crores, purportedly given to Sri Rajagopal Saravanan by Sri R. Sabapathy towards acquisition of Perambur lands. The contents of the said seized diary were put to scrutiny by the Hon'ble Tribunal in the case of Rajagopal Saravanan, for the Asst. Year ITA No. 119/CHNY/2024 dt.10.07.2024. The observations and findings of the Tribunal are as under: \"5. From the fact, it emerges that pursuant to search action u/s 132, a notebook was found which, inter-alia, contained notings of loans obtained by Shri R.Sabapathy. No dates were mentioned against these entries. Based on the statement of Shri R.Sabapathy, Ld. AO alleged that Shri R.Sabapathy received loan of Rs.25 Crores from Shri Rakesh of Swarna Shilpi out of which an amount of Rs.5 Crores was utilized as payment to assessee as on-money against purchase of impugned property by his sister. However, this statement was retracted within a span of 3 months....... Shri R.Sabapathy has taken contrary stand and his statement could not be held to be credible one...... the statement of Shri R.Sabapathy was modified within a short span of time and therefore, the same could not be accepted as credible one. No concrete reliance could be placed on the same to make impugned addition in the absence of any other evidence on record....\". 5.6 As could be seen from the above, the Tribunal had not considered the contents of the seized diary as such, in the absence of any other evidence brought on record by the Assessing Officer. When the contents of the seized payment of Rs.5 crores to Sri Rajagopal could not stand the test of appeal, no different view can be taken in respect of the balance amount of Rs.20 crores, purported to have been given to the appellant. 5.7 To conclude, in the first place, there is no seized material having any reference to the name of the appellant or the transactions made by the appellant with the searched party. Secondly, the case was taken up for ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy vide notice u/s 142(1), dated 10.11.2022 on paying the total accounted s/However, as evidenced by the sale deeds furnished, the total sale consideration received by and the total amount was received through DDs. Therefore, it is clear that the deposition of Sabapathy made u/s 132(4) on 04.12.2021 is not totally correct and suffers with certain infirmities, and therefore the same cannot be given full credence. However, on the part of the Assessing Officer, no independent veracity of the contents of Sri R. Sabapathy, and basing on such deposition alone, the AO proceeded to question the appellant. Even after obtaining the facts contrary to the version of Sri R. i Sabapathy Now coming to the facts of the case, Sn R. Sabapathy had retracted from his statement recorded on 04.12.2021 vide his retraction letter stated that the amounts mentioned in the seized material are not loans but the same are parking of funds with Sri Rakesh Kumar, he. has not paid any amount in cash to the appellant. However, the AO had not given apathy and proceeded to treat the amount of Rs.20 crores as undisclosed capital gains in the 8.5 Keeping the discussion on the present assessment aside for the time s, purportedly given to Sri Rajagopal Saravanan by Sri R. Sabapathy towards acquisition of Perambur lands. The contents of the said seized diary were put to scrutiny by the Hon'ble Tribunal in the case of Rajagopal Saravanan, for the Asst. Year ITA No. 119/CHNY/2024 dt.10.07.2024. The observations and \"5. From the fact, it emerges that pursuant to search action u/s 132, a alia, contained notings of loans abapathy. No dates were mentioned against these entries. Based on the statement of Shri R.Sabapathy, Ld. AO alleged that Shri R.Sabapathy received loan of Rs.25 Crores from Shri Rakesh of Swarna Shilpi out of which an amount of Rs.5 Crores was utilized as money against purchase of impugned property by his sister. However, this statement was retracted within a span of 3 months....... Shri R.Sabapathy has taken contrary stand and .. the statement of Shri R.Sabapathy was modified within a short span of time and therefore, the same could not be accepted as credible one. No concrete reliance could be placed on the same to make impugned addition in 5.6 As could be seen from the above, the Tribunal had not considered the contents of the seized diary as such, in the absence of any other evidence brought on record by the Assessing Officer. When the contents of the seized payment of Rs.5 crores to Sri Rajagopal could not stand the test of appeal, no different view can be taken in respect of the balance amount ized material having any reference to the name of the appellant or the transactions made by the appellant with the searched party. Secondly, the case was taken up for scrutiny referring to the statement given by Sri R. Sabapathy u/s 132(4) alone and no independent enquiry was done by the AO to verify the veracity of the contents mentioned therein, inasmuch as the total sale consideration of Rs.50 crores (precisely Rs.49.70 crores) was paid through DDs, against the statement that out of Rs.50 crores, Rs.20 c when the appellant had furnished the copies of sale deeds and brought out the actual facts of sale consideration, the AO had not discussed anything on these issues. Furthermore, when the retraction statement of Sri R.Sabapa form of Notarised Sworn Affidavit was produced before the AO, the same had to be dealt with either by proving the contents of earlier statement given u/s 132(4) are correct or by proving that the retraction statement is on wrong footing. However, no such exercise was done by the Assessing Officer but was simply brushed aside metaphorically. Therefore, the addition of Rs.20 crores towards undisclosed capital gains made by the AO cannot be sustained factually, technically or legally. Accordingly, be deleted. 6. In result, the appeal is allowed. 6. Aggrieved by the above order of Ld. CIT(A), the Revenue is in appeal before this Tribunal on the 1. The order of the learned Commissioner of Incom erroneous on facts of the case and in law. 2. The Ld.CIT(A) erred in deleting the addition made of Rs.20,00,00,000/ based on the incriminating material seized during the course of search proceeding and the same transaction was admitted statement recorded during the course of search action. 3. The Ld.CIT(A) erred in deleting the addition without considering the incriminating seized material wherein the date of property purchased matched with the date of cash loan the A.O. 4. The Ld.CIT(A) erred in not considering that documents seized in the form of small notebook which was found during the course of search which was seized from Saravana Store Jewellery are corrobo details of the cash loans received by Shri. R.Sabapathy during the financial year 2020-21 to the tune of Rs.25,00,00,000 out of which 20 crores were paid to the assessee. 5. The Ld CIT(A) erred in not considering that th supported by the Hon'ble Supreme Court's decision in the case of Pullangode Rubber Produce CI Ltd Vs State of Kerala which states that the statement made voluntarily by the assessee could form the basis of assessment. 6. 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. ITA No. Mr.Pinnathevar Palanichamy ::9 :: scrutiny referring to the statement given by Sri R. Sabapathy u/s 132(4) alone ependent enquiry was done by the AO to verify the veracity of the contents mentioned therein, inasmuch as the total sale consideration of Rs.50 crores (precisely Rs.49.70 crores) was paid through DDs, against the statement that out of Rs.50 crores, Rs.20 crores was paid in cash. Further, when the appellant had furnished the copies of sale deeds and brought out the actual facts of sale consideration, the AO had not discussed anything on these issues. Furthermore, when the retraction statement of Sri R.Sabapathy, in the form of Notarised Sworn Affidavit was produced before the AO, the same had to be dealt with either by proving the contents of earlier statement given u/s 132(4) are correct or by proving that the retraction statement is on wrong r, no such exercise was done by the Assessing Officer but was simply brushed aside metaphorically. Therefore, the addition of Rs.20 crores towards undisclosed capital gains made by the AO cannot be sustained factually, technically or legally. Accordingly, the addition so made is directed to 6. In result, the appeal is allowed.” Aggrieved by the above order of Ld. CIT(A), the Revenue is in appeal before this Tribunal on the following 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 made of Rs.20,00,00,000/ based on the incriminating material seized during the course of search proceeding and the same transaction was admitted by Mr. R.Sabapathy in his statement recorded during the course of search action. 3. The Ld.CIT(A) erred in deleting the addition without considering the incriminating seized material wherein the date of property purchased matched with the date of cash loans which was brought out in the assessment order by 4. The Ld.CIT(A) erred in not considering that documents seized in the form of small notebook which was found during the course of search which was seized from Saravana Store Jewellery are corroborating evidence, which provided the details of the cash loans received by Shri. R.Sabapathy during the financial 21 to the tune of Rs.25,00,00,000 out of which 20 crores were paid 5. The Ld CIT(A) erred in not considering that the addition made was supported by the Hon'ble Supreme Court's decision in the case of Pullangode Rubber Produce CI Ltd Vs State of Kerala which states that the statement made voluntarily by the assessee could form the basis of assessment. ds 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 ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy scrutiny referring to the statement given by Sri R. Sabapathy u/s 132(4) alone ependent enquiry was done by the AO to verify the veracity of the contents mentioned therein, inasmuch as the total sale consideration of Rs.50 crores (precisely Rs.49.70 crores) was paid through DDs, against the rores was paid in cash. Further, when the appellant had furnished the copies of sale deeds and brought out the actual facts of sale consideration, the AO had not discussed anything on these thy, in the form of Notarised Sworn Affidavit was produced before the AO, the same had to be dealt with either by proving the contents of earlier statement given u/s 132(4) are correct or by proving that the retraction statement is on wrong r, no such exercise was done by the Assessing Officer but was simply brushed aside metaphorically. Therefore, the addition of Rs.20 crores towards undisclosed capital gains made by the AO cannot be sustained the addition so made is directed to Aggrieved by the above order of Ld. CIT(A), the Revenue is in e Tax (Appeals) is 2. The Ld.CIT(A) erred in deleting the addition made of Rs.20,00,00,000/- based on the incriminating material seized during the course of search by Mr. R.Sabapathy in his 3. The Ld.CIT(A) erred in deleting the addition without considering the incriminating seized material wherein the date of property purchased matched s which was brought out in the assessment order by 4. The Ld.CIT(A) erred in not considering that documents seized in the form of small notebook which was found during the course of search which was seized rating evidence, which provided the details of the cash loans received by Shri. R.Sabapathy during the financial 21 to the tune of Rs.25,00,00,000 out of which 20 crores were paid e addition made was supported by the Hon'ble Supreme Court's decision in the case of Pullangode Rubber Produce CI Ltd Vs State of Kerala which states that the statement ds 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 7. Assailing the action of the Ld. CIT( through the statement of Mr. Antony Francis Julian, Purchase Manager of M/s.Saravana Stores (Jewelers) from whose possession the said pocket book was found. He showed us that, he had admitted in his statement that the said dairy was given to him by Shri R. Sabapathy, Managing Director of M/s.Saravana Stores (Textiles) for recording the loan transactions with M/s.Swarna statement of Shri R. Sabapathy, he pointed out that, when confronted with the contents of pocket book and statement of Shri Julian, Shri R. Sabapathy had also admitted that the notings denoted the loan of Rs.25 crores obtained by him from M/s. have utilized to pay Rs.20 crores to the assessee for purchase of land at Madurai and Rs. 5 crores to Shri R. Sabapathy for purchase of land at Perambur. The Ld. DR argued that, it was a fact that Shri R. Sabapathy had indeed acquired lands from these persons including the assessee and that, the dates of acquisition of land were co mentioned in the pocket book. It was therefore the Ld. DR’s case that, though there was no mention of any name or na pocket book, but due to the co original statement of Shri R. Sabapathy, and by applying the test of human probabilities, the AO had rightly inferred that the impugned sum of Rs.20 crores had been received by the assessee over and above the ITA No. Mr.Pinnathevar Palanichamy ::10 :: Assailing the action of the Ld. CIT(A), the Ld. DR first took us through the statement of Mr. Antony Francis Julian, Purchase Manager of M/s.Saravana Stores (Jewelers) from whose possession the said pocket book was found. He showed us that, he had admitted in his statement that the said dairy was given to him by Shri R. Sabapathy, Managing Director of M/s.Saravana Stores (Textiles) for recording the loan transactions with M/s.Swarna Shilipi. Then, taking us statement of Shri R. Sabapathy, he pointed out that, when confronted with the contents of pocket book and statement of Shri Julian, Shri R. Sabapathy had also admitted that the notings denoted the loan of Rs.25 crores obtained by him from M/s.Swarna Shilipi, which he had stated to have utilized to pay Rs.20 crores to the assessee for purchase of land at Madurai and Rs. 5 crores to Shri R. Sabapathy for purchase of land at Perambur. The Ld. DR argued that, it was a fact that Shri R. Sabapathy d indeed acquired lands from these persons including the assessee and that, the dates of acquisition of land were co-relatable to the dates mentioned in the pocket book. It was therefore the Ld. DR’s case that, though there was no mention of any name or nature of transaction in the pocket book, but due to the co-relation of dates, read along with the original statement of Shri R. Sabapathy, and by applying the test of human probabilities, the AO had rightly inferred that the impugned sum been received by the assessee over and above the ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy A), the Ld. DR first took us through the statement of Mr. Antony Francis Julian, Purchase Manager of M/s.Saravana Stores (Jewelers) from whose possession the said pocket- book was found. He showed us that, he had admitted in his statement that the said dairy was given to him by Shri R. Sabapathy, Managing Director of M/s.Saravana Stores (Textiles) for recording the loan Shilipi. Then, taking us through the statement of Shri R. Sabapathy, he pointed out that, when confronted with the contents of pocket book and statement of Shri Julian, Shri R. Sabapathy had also admitted that the notings denoted the loan of Rs.25 Shilipi, which he had stated to have utilized to pay Rs.20 crores to the assessee for purchase of land at Madurai and Rs. 5 crores to Shri R. Sabapathy for purchase of land at Perambur. The Ld. DR argued that, it was a fact that Shri R. Sabapathy d indeed acquired lands from these persons including the assessee and relatable to the dates mentioned in the pocket book. It was therefore the Ld. DR’s case that, ture of transaction in the relation of dates, read along with the original statement of Shri R. Sabapathy, and by applying the test of human probabilities, the AO had rightly inferred that the impugned sum been received by the assessee over and above the sale consideration of Rs.50 crores mentioned in the sale agreement and hence, which had been rightly assessed to tax in the hands of the assessee by way of capital gains. 8. Per contra, the Ld. AR for the Ld. CIT(A). He first invited our attention to relevant Page No. 61 of the seized pocket ID marked Annexure ANN/SK/SSSLLP/B&D/S the impugned addition was made by the AO. He pointed out that, the notings starts with figure of 25.00 and underneath it, is written 2/2 which may be denoting (2nd February) and a noting of +1 and then figure of 24, and thereafter, a noting of 16/3 [may be 16 and thereafter, on 10/4 [may be 10 figure of -22 and thereafter, a noting of 22/6 [may be 22 Ld. AR submitted that, these notings were clearly dumb scribblings and that no prudent person could have inferred any meaning whatsoever from this Page. According to him, this page was a dumb document and thus, the contents therein did rightly discarded by the Ld. CIT(A). He further explained that, the purported correlation being stressed upon the AO as well as the Ld. was not only far-fetched but also not discernible from this Page. He pointed out that, the said notings at the most only shows dates & months, but not the year and that the AO had imported the year while interpreting ITA No. Mr.Pinnathevar Palanichamy ::11 :: sale consideration of Rs.50 crores mentioned in the sale agreement and hence, which had been rightly assessed to tax in the hands of the assessee by way of capital gains. Per contra, the Ld. AR for the assessee supported the order of the Ld. CIT(A). He first invited our attention to relevant Page No. 61 of the seized pocket ID marked Annexure ANN/SK/SSSLLP/B&D/S the impugned addition was made by the AO. He pointed out that, the rts with figure of 25.00 and underneath it, is written 2/2 which February) and a noting of +1 and then figure of 24, and thereafter, a noting of 16/3 [may be 16th March] +1 and and thereafter, on 10/4 [may be 10th April] a noting of +1 and then 22 and thereafter, a noting of 22/6 [may be 22 Ld. AR submitted that, these notings were clearly dumb scribblings and that no prudent person could have inferred any meaning whatsoever from o him, this page was a dumb document and thus, the contents therein didn’t have evidentiary value and hence, it had been rightly discarded by the Ld. CIT(A). He further explained that, the purported correlation being stressed upon the AO as well as the Ld. fetched but also not discernible from this Page. He pointed out that, the said notings at the most only shows dates & months, but not the year and that the AO had imported the year while interpreting ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy sale consideration of Rs.50 crores mentioned in the sale agreement and hence, which had been rightly assessed to tax in the hands of the assessee supported the order of the Ld. CIT(A). He first invited our attention to relevant Page No. 61 of the seized pocket ID marked Annexure ANN/SK/SSSLLP/B&D/S-2, basis which the impugned addition was made by the AO. He pointed out that, the rts with figure of 25.00 and underneath it, is written 2/2 which February) and a noting of +1 and then figure of - March] +1 and -23 ting of +1 and then 22 and thereafter, a noting of 22/6 [may be 22nd June]. The Ld. AR submitted that, these notings were clearly dumb scribblings and that no prudent person could have inferred any meaning whatsoever from o him, this page was a dumb document and thus, t have evidentiary value and hence, it had been rightly discarded by the Ld. CIT(A). He further explained that, the purported correlation being stressed upon the AO as well as the Ld. DR fetched but also not discernible from this Page. He pointed out that, the said notings at the most only shows dates & months, but not the year and that the AO had imported the year while interpreting this page. He also showed us that, this Page but only few numbers, leave alone the name of the assessee and therefore the Ld. AR wondered as to how was the AO able to use these dumb notings and link it to the assessee by merely relying on few numbers like 25 +1, 24+1, etc. mentioned therein. The Ld. AR thus submitted that, this piece of paper on a stand relevance qua the assessee. 9. The Ld. AR further pointed out that, the case of the Revenue was singularly based on the statement of which he had stated that, these rough scribblings noting of Rs.20 crores paid to the assessee for purchase of property which he had bought for a total value of Rs.50 crores. Controverting the said statement of Shri R Sabapathy, the Ld. AR firstly submitted that this statement was contrary to the contemporaneous facts and therefore was unreliable. He showed us that, the property at Madurai was indeed purchased by Shri R. Sabapathy for a value of Rs.49.70 crores approx.), as mentioned in the later part of his answer, but this sum was paid to the assessee and other co not cash and that the entire sale consideration of Rs.49.70 crores (Rs.50 crores approx.) had been offered to tax by them. He further brought to our notice that, the said sale consideration of Rs.49.70 crores was more ITA No. Mr.Pinnathevar Palanichamy ::12 :: this page. He also showed us that, there was no mention of any names on this Page but only few numbers, leave alone the name of the assessee and therefore the Ld. AR wondered as to how was the AO able to use these dumb notings and link it to the assessee by merely relying on few e 25 +1, 24+1, etc. mentioned therein. The Ld. AR thus submitted that, this piece of paper on a stand-alone basis was of no relevance qua the assessee. The Ld. AR further pointed out that, the case of the Revenue was singularly based on the statement of R. Sabapathy dated 04.12.2021 in which he had stated that, these rough scribblings inter alia noting of Rs.20 crores paid to the assessee for purchase of property which he had bought for a total value of Rs.50 crores. Controverting the said ment of Shri R Sabapathy, the Ld. AR firstly submitted that this statement was contrary to the contemporaneous facts and therefore was unreliable. He showed us that, the property at Madurai was indeed R. Sabapathy for a value of Rs.49.70 crores approx.), as mentioned in the later part of his answer, but this sum was paid to the assessee and other co-owners through demand drafts and not cash and that the entire sale consideration of Rs.49.70 crores (Rs.50 een offered to tax by them. He further brought to our notice that, the said sale consideration of Rs.49.70 crores was more ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy there was no mention of any names on this Page but only few numbers, leave alone the name of the assessee and therefore the Ld. AR wondered as to how was the AO able to use these dumb notings and link it to the assessee by merely relying on few e 25 +1, 24+1, etc. mentioned therein. The Ld. AR thus alone basis was of no The Ld. AR further pointed out that, the case of the Revenue was R. Sabapathy dated 04.12.2021 in inter alia included noting of Rs.20 crores paid to the assessee for purchase of property which he had bought for a total value of Rs.50 crores. Controverting the said ment of Shri R Sabapathy, the Ld. AR firstly submitted that this statement was contrary to the contemporaneous facts and therefore was unreliable. He showed us that, the property at Madurai was indeed R. Sabapathy for a value of Rs.49.70 crores (Rs.50 crores approx.), as mentioned in the later part of his answer, but this sum owners through demand drafts and not cash and that the entire sale consideration of Rs.49.70 crores (Rs.50 een offered to tax by them. He further brought to our notice that, the said sale consideration of Rs.49.70 crores was more than 2.28 times of the guideline value and therefore it was also not a case of understatement of sale consideration. According to him statement given by Shri crores, he had paid Rs.20 crores in cash stood negated by the fact that the entire sale consideration was actually paid in demand drafts. He further submitted that R statement on 21.03.2022 and thereafter he had also furnished a sworn affidavit dated 05.12.2022. The Ld. AR contended that, the AO was not able to disprove his retraction and therefore according to him, the AO’s action of relying on Shri since been retracted, was unjustified. 10. The Ld.AR further pointed out that, in his answer to the same question no.56 of his original statement, Shri R. Sabapathy had stated that, out of the sum of Rs.25 crores obtained by way of loan, he had advanced Rs.5 crores to Madurai. He submitted that, like in the case of assessee, similar addition of Rs.5 Cr. was made in the hands of Shri Ra property at Perambur on the strength of the statement given by Shri R. Sabapathy. The Ld. AR brought to our notice that, this identical issue had travelled to this Tribunal and that, the Tribunal in their order passed in the case of Shri Rajagopal Saravanan in ITA No. 119/Chny/2024 deleted ITA No. Mr.Pinnathevar Palanichamy ::13 :: than 2.28 times of the guideline value and therefore it was also not a case of understatement of sale consideration. According to him Shri R. Sabapathy that, out of the total value of Rs.50 crores, he had paid Rs.20 crores in cash stood negated by the fact that the entire sale consideration was actually paid in demand drafts. He further submitted that R. Sabapathy had also later on retracted his statement on 21.03.2022 and thereafter he had also furnished a sworn affidavit dated 05.12.2022. The Ld. AR contended that, the AO was not able to disprove his retraction and therefore according to him, the AO’s Shri R. Sabapathy’s original statement, which had since been retracted, was unjustified. The Ld.AR further pointed out that, in his answer to the same question no.56 of his original statement, Shri R. Sabapathy had ed that, out of the sum of Rs.25 crores obtained by way of loan, he had advanced Rs.5 crores to Shri R Saravanan for purchase of land at Madurai. He submitted that, like in the case of assessee, similar addition of Rs.5 Cr. was made in the hands of Shri Rajagopal Saravanan who sold property at Perambur on the strength of the statement given by Shri R. Sabapathy. The Ld. AR brought to our notice that, this identical issue had travelled to this Tribunal and that, the Tribunal in their order passed in of Shri Rajagopal Saravanan in ITA No. 119/Chny/2024 deleted ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy than 2.28 times of the guideline value and therefore it was also not a case of understatement of sale consideration. According to him therefore, the R. Sabapathy that, out of the total value of Rs.50 crores, he had paid Rs.20 crores in cash stood negated by the fact that the entire sale consideration was actually paid in demand drafts. He . Sabapathy had also later on retracted his statement on 21.03.2022 and thereafter he had also furnished a sworn affidavit dated 05.12.2022. The Ld. AR contended that, the AO was not able to disprove his retraction and therefore according to him, the AO’s R. Sabapathy’s original statement, which had The Ld.AR further pointed out that, in his answer to the same question no.56 of his original statement, Shri R. Sabapathy had inter alia ed that, out of the sum of Rs.25 crores obtained by way of loan, he R Saravanan for purchase of land at Madurai. He submitted that, like in the case of assessee, similar addition jagopal Saravanan who sold property at Perambur on the strength of the statement given by Shri R. Sabapathy. The Ld. AR brought to our notice that, this identical issue had travelled to this Tribunal and that, the Tribunal in their order passed in of Shri Rajagopal Saravanan in ITA No. 119/Chny/2024 deleted the impugned addition of Rs.5 Crs by holding the contents of the pocket book as well as the statement of Shri R Sabapathy to be unreliable. The Ld. AR accordingly submitted that, the ratio laid would apply with equal force to the assessee’s case as well and that the Ld. CIT(A) had rightly relied on the said decision of the Tribunal in Shri Rajagopal Saravanan’s case (supra) to delete the impugned addition. Therefore, the Ld. AR does Ld.CIT(A). 11. We have heard both the parties and perused the material placed on record before us. We notice that, a search action u/s 132 of the Act was conducted upon M/s Sarvana Stores (Textil search, a pocket diary was found and seized from the possession of Mr.Mr. Antony Francis Julian who was the Purchases Manager of the said entity. When enquired about the contents of the pocket diary, he is noted to have stated that, this diary was given to him by the Managing Director, Shri R. Sabapathy to record his loan transactions with M/s Swarna Shilpi. Thereafter, the contents of the said diary, more particularly Page No. 61, was confronted to Shri R. Sabapathy, who in his sta 04.12.2021 is noted to have stated as “Q.56 Please give the deals of the immovable properties for which this cash loan of Rs.25 Crs. was paid by you. Please also furnish the ITA No. Mr.Pinnathevar Palanichamy ::14 :: the impugned addition of Rs.5 Crs by holding the contents of the pocket book as well as the statement of Shri R Sabapathy to be unreliable. The Ld. AR accordingly submitted that, the ratio laid down in the said decision would apply with equal force to the assessee’s case as well and that the Ld. CIT(A) had rightly relied on the said decision of the Tribunal in Shri Rajagopal Saravanan’s case (supra) to delete the impugned addition. e Ld. AR doesn’t want us to interfere with the action of the We have heard both the parties and perused the material placed on record before us. We notice that, a search action u/s 132 of the Act was conducted upon M/s Sarvana Stores (Textiles) and in the course of search, a pocket diary was found and seized from the possession of Mr.Mr. Antony Francis Julian who was the Purchases Manager of the said entity. When enquired about the contents of the pocket diary, he is noted , this diary was given to him by the Managing Director, Shri R. Sabapathy to record his loan transactions with M/s Swarna Shilpi. Thereafter, the contents of the said diary, more particularly Page No. 61, was confronted to Shri R. Sabapathy, who in his sta 04.12.2021 is noted to have stated as under: - Please give the deals of the immovable properties for which this cash loan of Rs.25 Crs. was paid by you. Please also furnish the ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy the impugned addition of Rs.5 Crs by holding the contents of the pocket book as well as the statement of Shri R Sabapathy to be unreliable. The down in the said decision would apply with equal force to the assessee’s case as well and that the Ld. CIT(A) had rightly relied on the said decision of the Tribunal in Shri Rajagopal Saravanan’s case (supra) to delete the impugned addition. t want us to interfere with the action of the We have heard both the parties and perused the material placed on record before us. We notice that, a search action u/s 132 of the Act was es) and in the course of search, a pocket diary was found and seized from the possession of Mr.Mr. Antony Francis Julian who was the Purchases Manager of the said entity. When enquired about the contents of the pocket diary, he is noted , this diary was given to him by the Managing Director, Shri R. Sabapathy to record his loan transactions with M/s Swarna Shilpi. Thereafter, the contents of the said diary, more particularly Page No. 61, was confronted to Shri R. Sabapathy, who in his statement dated Please give the deals of the immovable properties for which this cash loan of Rs.25 Crs. was paid by you. Please also furnish the persons to whom the payments were made by you out of this lo Rs.25 Crores A As already stated by me in my sworn statement, properties at Perambur and Madurai were purchased by me during December 2020 and January 2021. The property at Perambur was purchased for my sister Smt. Selvalkumari for a consideration of Rs. 16 Crowes was the Registered Value which was met out of my father's Rental Income and Rs.5 Crores was paid by me is cash to Shri R. Saravanan of Saravanabhavan Hotels group Similarly, the property at Madurai was purchased for which Rs.30 Crores was paid by me in cash. 12. It is observed that, Shri R. Sabapathy had originally stated that, the noting of Rs.25 crores on this Page denoted loan which he had obtained from M/s Swarna Shilpi out of which sum of Rs.20 crores was used by him to pay consideration for the la assessee for Rs.50 crores. In light of the above statement, the AO is noted to have confronted the assessee as to whether he received such sum of Rs.20 crores in cash, to which, the assessee is noted to have categorically denied the same. Though the assessee furnished the subsequent retraction filed by Shri R Sabapathy, the AO however treated his original statement to be the important piece of evidence and accordingly drew inference that the notings on the page of pocket diary had link with the assessee and thus added the impugned sum by way of capital gains of the assessee. 13. Now the question that arise for our consideration material found during the ITA No. Mr.Pinnathevar Palanichamy ::15 :: persons to whom the payments were made by you out of this lo As already stated by me in my sworn statement, properties at Perambur and Madurai were purchased by me during December 2020 and January 2021. The property at Perambur was purchased for my sister Smt. Selvalkumari for a consideration of Rs.21 Crores out of which Rs. 16 Crowes was the Registered Value which was met out of my father's Rental Income and Rs.5 Crores was paid by me is cash to Shri R. Saravanan of Saravanabhavan Hotels group Similarly, the property at Madurai was purchased for a consideration of Rs.50 Crores (appear) of which Rs.30 Crores was paid by me in cash.” It is observed that, Shri R. Sabapathy had originally stated that, the noting of Rs.25 crores on this Page denoted loan which he had obtained from M/s Swarna Shilpi out of which sum of Rs.20 crores was used by him to pay consideration for the land which he acquired from the assessee for Rs.50 crores. In light of the above statement, the AO is noted to have confronted the assessee as to whether he received such sum of Rs.20 crores in cash, to which, the assessee is noted to have ed the same. Though the assessee furnished the subsequent retraction filed by Shri R Sabapathy, the AO however treated his original statement to be the important piece of evidence and accordingly drew inference that the notings on the page of pocket diary had link with the assessee and thus added the impugned sum by way of capital gains of the assessee. Now the question that arise for our consideration is found during the course of search at third party premises viz., ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy persons to whom the payments were made by you out of this love of As already stated by me in my sworn statement, properties at Perambur and Madurai were purchased by me during December 2020 and January 2021. The property at Perambur was purchased for my Rs.21 Crores out of which Rs. 16 Crowes was the Registered Value which was met out of my father's Rental Income and Rs.5 Crores was paid by me is cash to Shri R. Saravanan of Saravanabhavan Hotels group Similarly, the property at a consideration of Rs.50 Crores (appear) of It is observed that, Shri R. Sabapathy had originally stated that, the noting of Rs.25 crores on this Page denoted loan which he had obtained from M/s Swarna Shilpi out of which sum of Rs.20 crores was inter alia nd which he acquired from the assessee for Rs.50 crores. In light of the above statement, the AO is noted to have confronted the assessee as to whether he received such sum of Rs.20 crores in cash, to which, the assessee is noted to have ed the same. Though the assessee furnished the subsequent retraction filed by Shri R Sabapathy, the AO however treated his original statement to be the important piece of evidence and accordingly drew inference that the notings on the page of pocket diary had link with the assessee and thus added the impugned sum by way of is, whether the search at third party premises viz., Page No. 61 of the pocket diary ID marked ANN/SK/SSSLLP/B&D/S the statement given by Shri assessee and whether it the notings therein represent 14. In order to answer the above question, we first consider it prudent to examine the contents of the notings found on Page No. 61 of the pocket diary ID marked ANN/SK/SSSLLP/B&D/S premises of the third party alone basis can serve as a link to the assessee and infer that has received Rs.20 Crs in cash as on Madurai. For examining the same, we have to first take a look into the contents of the said paper, which is being extracted below for ready reference: ITA No. Mr.Pinnathevar Palanichamy ::16 :: of the pocket diary ID marked ANN/SK/SSSLLP/B&D/S given by Shri R Sabapathy could establish any link whether it supported the case of the Assessing represent on-monies of the assessee. In order to answer the above question, we first consider it prudent to examine the contents of the notings found on Page No. 61 of the pocket diary ID marked ANN/SK/SSSLLP/B&D/S-2 seized from the premises of the third party and ascertain whether the same on a stand alone basis can serve as a link to the assessee and infer that has received Rs.20 Crs in cash as on-money for sale of his property at Madurai. For examining the same, we have to first take a look into the d paper, which is being extracted below for ready ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy of the pocket diary ID marked ANN/SK/SSSLLP/B&D/S-2 and could establish any link with the the case of the Assessing Officer that In order to answer the above question, we first consider it prudent to examine the contents of the notings found on Page No. 61 of the seized from the e same on a stand- alone basis can serve as a link to the assessee and infer that the assessee money for sale of his property at Madurai. For examining the same, we have to first take a look into the d paper, which is being extracted below for ready 15. The above page is noted to contain only rough scribblings of certain numbers which have been added & subtracted with dates in day/month format mentioned against some numbers. The sa of Saravana Stores (Jewel) Super LLP and that there is an abbreviation ‘SLP’ mentioned on the top mentioned against certain numbers. and ends with figure 18 figures and initials on the side, [ further noted that, there is no mention of name of the assessee on this entire page. Also, there is no mention of any land transaction or the ITA No. Mr.Pinnathevar Palanichamy ::17 :: The above page is noted to contain only rough scribblings of certain numbers which have been added & subtracted with dates in day/month format mentioned against some numbers. The said page bears the stamp of Saravana Stores (Jewel) Super LLP and that there is an abbreviation ‘SLP’ mentioned on the top left-hand corner and that alphabet ‘R’ is mentioned against certain numbers. The page starts with figure 25.00 and ends with figure 18 with plus & minus [+ & -] alongside figures and initials on the side, [but not identified whose initials further noted that, there is no mention of name of the assessee on this entire page. Also, there is no mention of any land transaction or the ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy The above page is noted to contain only rough scribblings of certain numbers which have been added & subtracted with dates in day/month id page bears the stamp of Saravana Stores (Jewel) Super LLP and that there is an abbreviation corner and that alphabet ‘R’ is The page starts with figure 25.00 alongside with the but not identified whose initials]. It is further noted that, there is no mention of name of the assessee on this entire page. Also, there is no mention of any land transaction or the locations viz Madurai or Perambur or the agreed sale consideration or even the mention of word ‘cash’ on th contended that, the notings on this page and incomprehensible drawing adverse view. After will discuss in detail (infra), we are of the view that can infer any logical meaning out of these notings authored/scribbled it, is able to assert transaction recorded therein lack any evidentiary value, be kept in mind that, this Page was found and seized from the premises of Shri R. Sabapathy and therefore ordinarily the presumption under Section 292C is that, the contents of the Page belong to the searched person. Hence, for the AO to rebut this presumption and infer these notings to pertain or relate to the assessee, it is necessary to bring on record some tangible material or corroborative evidence notings on this Page with the assessee, which we find the miserably failed to do. In absence of the same, the assessee cannot be expected to prove a negative viz., explain the contents of such dumb notings found in a page from the premi particularly when there is no mention of his name or any of his business transaction on the said Page. ITA No. Mr.Pinnathevar Palanichamy ::18 :: Madurai or Perambur or the agreed sale consideration or even the mention of word ‘cash’ on this Page. The assessee has therefore contended that, the notings on this page at 3rd party premises and therefore, can’t be used against him for drawing adverse view. After considering the facts of this case, which we cuss in detail (infra), we are of the view that no prudent person can infer any logical meaning out of these notings unless the person who , is able to assert with corroborative material, the transaction recorded therein. Hence, the contents of this Page lack any evidentiary value, particularly qua the assessee because it has be kept in mind that, this Page was found and seized from the premises of Shri R. Sabapathy and therefore ordinarily the presumption under C is that, the contents of the Page belong to the searched person. Hence, for the AO to rebut this presumption and infer these notings to pertain or relate to the assessee, it is necessary to bring on record some tangible material or corroborative evidence notings on this Page with the assessee, which we find the . In absence of the same, the assessee cannot be expected to prove a negative viz., explain the contents of such dumb notings found in a page from the premises of third party, more particularly when there is no mention of his name or any of his business transaction on the said Page. ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy Madurai or Perambur or the agreed sale consideration or is Page. The assessee has therefore party premises are dumb and therefore, can’t be used against him for considering the facts of this case, which we no prudent person unless the person who with corroborative material, the ntents of this Page appear to particularly qua the assessee because it has to be kept in mind that, this Page was found and seized from the premises of Shri R. Sabapathy and therefore ordinarily the presumption under C is that, the contents of the Page belong to the searched person. Hence, for the AO to rebut this presumption and infer these notings to pertain or relate to the assessee, it is necessary to bring on record some tangible material or corroborative evidence to link the notings on this Page with the assessee, which we find the AO has . In absence of the same, the assessee cannot be expected to prove a negative viz., explain the contents of such dumb ses of third party, more particularly when there is no mention of his name or any of his business 16. We notice that, the on this Page by correlating the dates mentioned in the Pa on which the land was sold by the assessee. According to us, such an attempt was far-fetched and lacked any cogent rationale. As rightly pointed out by the assessee, may be depicting 2nd February Likewise, the last date is 9/10 i.e. 9 stated therein. And relevant facts to be co noted that the land at Madurai was sold by the assessee R.Sabapathy & others in January, 2021 was sold by Shri Rajagopl 2020, and thus, there is no co notings on this page. cogent link between the contents of this Page with the assessee, the alleged linkage of dates being made by the Revenue to suit their purpose, in our considered view, was context, we gainfully refer to in the case of Motors & General Stores (P.) Ltd. (66 ITR 692) wherein it was held that income tax authorities to deduce the natur purported intention, by going behind the document or to consider the ITA No. Mr.Pinnathevar Palanichamy ::19 :: the AO has attempted to justify the notings found on this Page by correlating the dates mentioned in the Page with the date on which the land was sold by the assessee. According to us, such an fetched and lacked any cogent rationale. As rightly pointed out by the assessee, the first date shown in the page is 2/2 i.e. February, however there is no year stated therein the last date is 9/10 i.e. 9th October and the year also is not relevant facts to be co-related with the dates, it is the land at Madurai was sold by the assessee R.Sabapathy & others in January, 2021, and even the land at Per was sold by Shri Rajagopl Saravanan to Shri R. Sabapathy in December, and thus, there is no co-relation found with the sale on this page. According to us, in absence of any tangible or cogent link between the contents of this Page with the assessee, the alleged linkage of dates being made by the Revenue to suit their purpose, in our considered view, was irrational, whimsical and unjustified. ontext, we gainfully refer to the decision of the Hon'ble Supreme Court, Motors & General Stores (P.) Ltd. (66 ITR 692) held that \"it is, therefore, obvious that it is not open to the income tax authorities to deduce the nature of the document from the purported intention, by going behind the document or to consider the ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy justify the notings found ge with the date on which the land was sold by the assessee. According to us, such an fetched and lacked any cogent rationale. As rightly date shown in the page is 2/2 i.e., no year stated therein. October and the year also is not related with the dates, it is the land at Madurai was sold by the assessee to Shri and even the land at Perambur Saravanan to Shri R. Sabapathy in December, found with the sale-dates with the to us, in absence of any tangible or cogent link between the contents of this Page with the assessee, the alleged linkage of dates being made by the Revenue to suit their purpose, and unjustified. In this the decision of the Hon'ble Supreme Court, Motors & General Stores (P.) Ltd. (66 ITR 692) \"it is, therefore, obvious that it is not open to the e of the document from the purported intention, by going behind the document or to consider the substance of the matter or to accept it in part and reject it in part or to rewrite the document, merely to suite purpose of revenue 17. We observe that, the entire case of the Revenue hinges on the original statement dated 04.12.2021 of Shri contents of the above Page to the assessee, which he had subsequently retracted vide letter/affidavit dated 21.03.2022 & 05.1 adverting to the veracity of the averments made by Shri his original statement and the tenability of his subsequent retraction, the first question to be answered is whether such statement of Shri Sabapathy, irrespective of value in the matters of the assessee or not. Ordinarily, the law states that, a statement recorded u/s 132(4) of the Act can be used as in the proceedings against the searched person. This rationale from Section 132(4A) of the Act which states that any material found from the searched premises and the contents therein shall be presumed to be belonging to or pertaining to the searched person. Accordingly, the contents of material seized from t presumed to be within the exclusive knowledge of the searched person and therefore any statement given by a searched person u/s 132(4) of the Act explaining the contents of the seized on determination of his total income, can be used against him ITA No. Mr.Pinnathevar Palanichamy ::20 :: substance of the matter or to accept it in part and reject it in part or to rewrite the document, merely to suite purpose of revenue”. We observe that, the entire case of the Revenue hinges on the original statement dated 04.12.2021 of Shri R. Sabapathy contents of the above Page to the assessee, which he had subsequently retracted vide letter/affidavit dated 21.03.2022 & 05.12.2022. Before adverting to the veracity of the averments made by Shri R. Sabapathy his original statement and the tenability of his subsequent retraction, the first question to be answered is whether such statement of Shri , irrespective of his subsequent retraction, had any evidentiary value in the matters of the assessee or not. Ordinarily, the law states that, a statement recorded u/s 132(4) of the Act can be used as in the proceedings against the searched person. This rationale from Section 132(4A) of the Act which states that any material found from the searched premises and the contents therein shall be presumed to be belonging to or pertaining to the searched person. Accordingly, the contents of material seized from the premises of searched person is presumed to be within the exclusive knowledge of the searched person and therefore any statement given by a searched person u/s 132(4) of the Act explaining the contents of the seized material which has a bearing ination of his total income, can be used against him ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy substance of the matter or to accept it in part and reject it in part or to . We observe that, the entire case of the Revenue hinges on the R. Sabapathy to link the contents of the above Page to the assessee, which he had subsequently 2.2022. Before R. Sabapathy in his original statement and the tenability of his subsequent retraction, the first question to be answered is whether such statement of Shri R. his subsequent retraction, had any evidentiary value in the matters of the assessee or not. Ordinarily, the law states that, a statement recorded u/s 132(4) of the Act can be used as evidence in the proceedings against the searched person. This rationale emanates from Section 132(4A) of the Act which states that any material found from the searched premises and the contents therein shall be presumed to be belonging to or pertaining to the searched person. Accordingly, the he premises of searched person is presumed to be within the exclusive knowledge of the searched person and therefore any statement given by a searched person u/s 132(4) of material which has a bearing ination of his total income, can be used against him provided it being given voluntarily and not v if in the statement recorded u/s 132(4) of the Act, the searched person accuses a third party of any wrong doing, th principle can’t be applied, substantiate his averment against the third party with tangible and corroborative material. In absence of the same, make addition or draw based on the statement given by the searched person u/s 132(4) of the Act. Reason being, if the requirement placed upon the maker of the statement to substantiate his statement against a third party with tangible material/evidence is dispensed away with, then any searched person can unscrupulously, incriminate any third party at his own sweet will, for no fault of the latter. According to us therefore, any statement given by a searched person against undergoing cross-examination such third party unless such statement is backed by any tangible material or corroborative evidence found in the course of search. 18. In light of the above, we n statement of Shri R. Sabapathy above. It is noted by us that, Shri explained in his statement, the several numbers, additions and ITA No. Mr.Pinnathevar Palanichamy ::21 :: being given voluntarily and not vitiated by duress, coercion etc if in the statement recorded u/s 132(4) of the Act, the searched person accuses a third party of any wrong doing, then the aforesaid ied, unless the maker of the statement substantiate his averment against the third party with tangible and corroborative material. In absence of the same, it would be unsafe to draw adverse inference against a third party solely based on the statement given by the searched person u/s 132(4) of the Act. Reason being, if the requirement placed upon the maker of the statement to substantiate his statement against a third party with evidence is dispensed away with, then any searched person can unscrupulously, incriminate any third party at his own sweet will, for no fault of the latter. According to us therefore, any statement given by a searched person against any third party examination should not be used as evidence against such third party unless such statement is backed by any tangible material evidence found in the course of search. In light of the above, we now advert back to examining the R. Sabapathy, which has already been extracted earlier above. It is noted by us that, Shri R. Sabapathy had not specifically explained in his statement, the several numbers, additions and ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy itiated by duress, coercion etc. However, if in the statement recorded u/s 132(4) of the Act, the searched person en the aforesaid legal the maker of the statement is able to substantiate his averment against the third party with tangible and it would be unsafe to inference against a third party solely based on the statement given by the searched person u/s 132(4) of the Act. Reason being, if the requirement placed upon the maker of the statement to substantiate his statement against a third party with evidence is dispensed away with, then any searched person can unscrupulously, incriminate any third party at his own sweet will, for no fault of the latter. According to us therefore, any un-tested any third party, without be used as evidence against such third party unless such statement is backed by any tangible material ow advert back to examining the , which has already been extracted earlier had not specifically explained in his statement, the several numbers, additions and subtractions found noted on this Page and as to how did the figure of 25.00 ended with figure 18 explanation that, the noting of Rs.25 crores represented loan which he had obtained from Mr. Rakesh of M/s Swarna Shilpi and then straightaway averred that Rs.20 crores was paid in cash to the assessee towards agreed cost price of Rs.50 crores for purchase of land at Madurai and the balance Rs. 5 crores was paid to Shri price of Rs.21 crores for purchase of land at Perambur. This statement given by Shri R. Sabapathy rise to a suspicion against the assessee, but as noted by us above, such statement is required to be supported by some c seized in the course of search transaction/sale-deed at Madurai, contents of which disproves the on money allegation, which will discuss infra analysis of the contents of the Page No. 61 of the pocket diary ID marked ANN/SK/SSSLLP/B&D/S material contained therein which would in any manner suggest any direct or tacit linkage with the assessee. Hence, in our considered view, such bald statement given by Shri used as reliable evidence the assessee. ITA No. Mr.Pinnathevar Palanichamy ::22 :: noted on this Page and as to how did the figure of with figure 18. Rather, he is noted to have given a sweeping explanation that, the noting of Rs.25 crores represented loan which he had obtained from Mr. Rakesh of M/s Swarna Shilpi and then straightaway averred that Rs.20 crores was paid in cash to the assessee towards agreed cost price of Rs.50 crores for purchase of land at Madurai and the balance Rs. 5 crores was paid to Shri R Saravanan towards agreed cost price of Rs.21 crores for purchase of land at Perambur. This statement R. Sabapathy directly incriminating the assessee may give rise to a suspicion against the assessee, but as noted by us above, such statement is required to be supported by some corroborating seized in the course of search, which ought to be the sale ed at Madurai, contents of which disproves the on money allegation, which will discuss infra. Having regard to our above analysis of the contents of the Page No. 61 of the pocket diary ID marked ANN/SK/SSSLLP/B&D/S-2 we find that, there was no cogent or re material contained therein which would in any manner suggest any direct or tacit linkage with the assessee. Hence, in our considered view, such bald statement given by Shri R. Sabapathy dated 04.12.2021 cannot be reliable evidence to draw any adverse inference in the hands of ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy noted on this Page and as to how did the figure of . Rather, he is noted to have given a sweeping explanation that, the noting of Rs.25 crores represented loan which he had obtained from Mr. Rakesh of M/s Swarna Shilpi and then straightaway averred that Rs.20 crores was paid in cash to the assessee towards the agreed cost price of Rs.50 crores for purchase of land at Madurai and the towards agreed cost price of Rs.21 crores for purchase of land at Perambur. This statement incriminating the assessee may give rise to a suspicion against the assessee, but as noted by us above, such orroborating evidence which ought to be the sale ed at Madurai, contents of which disproves the on- aving regard to our above analysis of the contents of the Page No. 61 of the pocket diary ID marked find that, there was no cogent or reliable material contained therein which would in any manner suggest any direct or tacit linkage with the assessee. Hence, in our considered view, such dated 04.12.2021 cannot be y adverse inference in the hands of 19. Be that as it may, the Ld. AR has also rightly pointed out to us that, the original statement of Shri relate with the notings found on the above extracted Page. him, if the sums of Rs.20 crores and Rs. 5 crores had been paid by him, then both these figures ought to have been subtracted from Rs. 25 crores and that the page should have ended with figure of NIL or ‘0’, but there were only small numbers with number ‘18’ and thus, he argued that, it clearly did the purported number of ‘25’, which according to Shri represented loan taken, had been used up for making payments for purchase of land. It was further pointed out to us that, though there is a mention of alphabet ‘R’ which may denote Mr. Rakesh as mentioned by Shri R. Sabapathy in his statement, but there is no abbreviation of the assessee or Shri R Sarvanan mentioned on this P noted on the top part corresponding to the noting of ‘25’, which as rightly submitted by the Ld. AR, does not suggest any linkage to the assessee or Shri R Sarvanan. Having taken note of these apparent defects pointed out by the Ld. AR in the statement of Shri notings found on Page No. 61 of document ID marked ANN/SK/SSSLLP/B&D/S statement of Shri R. Sabapathy reliable in as much as it did ITA No. Mr.Pinnathevar Palanichamy ::23 :: Be that as it may, the Ld. AR has also rightly pointed out to us that, the original statement of Shri R. Sabapathy doesn’t even prime facie co relate with the notings found on the above extracted Page. him, if the sums of Rs.20 crores and Rs. 5 crores had been paid by him, then both these figures ought to have been subtracted from Rs. 25 crores and that the page should have ended with figure of NIL or ‘0’, but there were only small numbers added or subtracted and that the page ended with number ‘18’ and thus, he argued that, it clearly didn’ the purported number of ‘25’, which according to Shri represented loan taken, had been used up for making payments for se of land. It was further pointed out to us that, though there is a mention of alphabet ‘R’ which may denote Mr. Rakesh as mentioned by in his statement, but there is no abbreviation of the assessee or Shri R Sarvanan mentioned on this Page and rather ‘SLP’ is noted on the top part corresponding to the noting of ‘25’, which as rightly submitted by the Ld. AR, does not suggest any linkage to the assessee or Shri R Sarvanan. Having taken note of these apparent defects pointed out AR in the statement of Shri R. Sabapathy, in light of the notings found on Page No. 61 of document ID marked ANN/SK/SSSLLP/B&D/S-2, we find merit in his plea that the original R. Sabapathy dated 04.12.2021 was otherwise also not in as much as it didn’t reflect the true and correct facts. ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy Be that as it may, the Ld. AR has also rightly pointed out to us that, t even prime facie co- relate with the notings found on the above extracted Page. According to him, if the sums of Rs.20 crores and Rs. 5 crores had been paid by him, then both these figures ought to have been subtracted from Rs. 25 crores and that the page should have ended with figure of NIL or ‘0’, but there added or subtracted and that the page ended n’t suggest that the purported number of ‘25’, which according to Shri R. Sabapathy represented loan taken, had been used up for making payments for se of land. It was further pointed out to us that, though there is a mention of alphabet ‘R’ which may denote Mr. Rakesh as mentioned by in his statement, but there is no abbreviation of the age and rather ‘SLP’ is noted on the top part corresponding to the noting of ‘25’, which as rightly submitted by the Ld. AR, does not suggest any linkage to the assessee or Shri R Sarvanan. Having taken note of these apparent defects pointed out , in light of the notings found on Page No. 61 of document ID marked , we find merit in his plea that the original dated 04.12.2021 was otherwise also not t reflect the true and correct facts. 20. To further buttress his case, the Ld. AR also brought to our notice another piece of corroborative contemporaneous fact to disprove the original statement of Shri R Sabapathy. He particularly Sabapathy’s averment in his answer to Q No. 59 wherein he had mentioned that, the total cost price of the land purchased by him at Madurai from the assessee was Rs.50 crores, towards which he had allegedly paid Rs.20 crores in cash. Ta agreement which had been executed between Shri assessee (along with other co actual sale consideration agreed was Rs.49.70 crores, which after taking into account the stamp duty & registration charges went up to Rs.55 crores. We note that this sale consideration found mentioned in the sale document, correlated with the figure of Rs.50 crores mentioned in Shri Sabapathy’s statement. We not Rs.50 crores was fully paid by Shri R Sabapathy through demand drafts and not in cash. The entire sale consideration was also accounted for by the assessee & other co it is noted that this agreed sale consideration was more than 2.28 times of the valuation ascertained by the stamp duty authorities and therefore we find sufficient merit in the assessee’s case that, one could not even allege that, the agreed consideratio Having regard to these facts, if the statement of Shri ITA No. Mr.Pinnathevar Palanichamy ::24 :: To further buttress his case, the Ld. AR also brought to our notice another piece of corroborative contemporaneous fact to disprove the original statement of Shri R Sabapathy. He particularly stressed on Shri ’s averment in his answer to Q No. 59 wherein he had mentioned that, the total cost price of the land purchased by him at Madurai from the assessee was Rs.50 crores, towards which he had allegedly paid Rs.20 crores in cash. Taking us through the actual sale agreement which had been executed between Shri R. Sabapathy assessee (along with other co-owners), it was pointed out to us, that the actual sale consideration agreed was Rs.49.70 crores, which after taking unt the stamp duty & registration charges went up to Rs.55 crores. We note that this sale consideration found mentioned in the sale document, correlated with the figure of Rs.50 crores mentioned in Shri ’s statement. We note that, the agreed sale consideration of Rs.50 crores was fully paid by Shri R Sabapathy through demand drafts and not in cash. The entire sale consideration was also accounted for by other co-owners and also offered to tax. More importantly, it is noted that this agreed sale consideration was more than 2.28 times of the valuation ascertained by the stamp duty authorities and therefore we find sufficient merit in the assessee’s case that, one could not even allege that, the agreed consideration of Rs.50 crores was under Having regard to these facts, if the statement of Shri R. Sabapathy ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy To further buttress his case, the Ld. AR also brought to our notice another piece of corroborative contemporaneous fact to disprove the stressed on Shri R. ’s averment in his answer to Q No. 59 wherein he had mentioned that, the total cost price of the land purchased by him at Madurai from the assessee was Rs.50 crores, towards which he had king us through the actual sale R. Sabapathy and the owners), it was pointed out to us, that the actual sale consideration agreed was Rs.49.70 crores, which after taking unt the stamp duty & registration charges went up to Rs.55 crores. We note that this sale consideration found mentioned in the sale document, correlated with the figure of Rs.50 crores mentioned in Shri R. that, the agreed sale consideration of Rs.50 crores was fully paid by Shri R Sabapathy through demand drafts and not in cash. The entire sale consideration was also accounted for by owners and also offered to tax. More importantly, it is noted that this agreed sale consideration was more than 2.28 times of the valuation ascertained by the stamp duty authorities and therefore we find sufficient merit in the assessee’s case that, one could not even n of Rs.50 crores was under-stated. R. Sabapathy is considered at its face value, then there are only two possibilities viz., (a) either the selective portion wherein he stated the figure of total cost of land acquired at Madurai was Rs.50 crores, is incorrect or (b) that he had erroneously averred a mistaken fact that, he had paid consideration to the extent of Rs.20 crores in cash. Overall, having regard to the facts discussed in the foregoing, human probabilities, according to us, the more plausible inference is that, Shri R. Sabapathy had factually erred in stating that, he had paid consideration of Rs.20 crores in cash out of the agreed consideration Rs.50 crores (particularly since the total cost price of Rs.50 crores has been found to be contemporaneously correct be discharged by way of demand drafts 21. Moreover, we also note that, subsequently retracted his statement on 21.03.2022 wherein he clarified that, the noting of Rs.25 crores actually did not represent loan of Crs from Mr.Rakesh of M/s.Swarna proceeds of undisclosed sales Mr.Rakesh of M/s.Swarna was out of other undisclosed sales. Sabapathy had also filed an Affidavit dated 05.12.2022 ITA No. Mr.Pinnathevar Palanichamy ::25 :: considered at its face value, then there are only two possibilities viz., (a) either the selective portion wherein he stated the figure of total cost of land acquired at Madurai was Rs.50 crores, is incorrect or (b) that he had erroneously averred a mistaken fact that, he had paid consideration to the extent of Rs.20 crores in cash. Overall, having regard to the facts discussed in the foregoing, and applying the test of human conduct and human probabilities, according to us, the more plausible inference is that, had factually erred in stating that, he had paid consideration of Rs.20 crores in cash out of the agreed consideration particularly since the total cost price of Rs.50 crores has contemporaneously correct, entire of which is found to be discharged by way of demand drafts). Moreover, we also note that, Shri R. Sabapathy retracted his statement on 21.03.2022 wherein he clarified , the noting of Rs.25 crores actually did not represent loan of of M/s.Swarna Shilipi, but instead it represented proceeds of undisclosed sales of Rs.25 crores which was parked with M/s.Swarna Shilipi to the tune of Rs.17 Crs.; was out of other undisclosed sales. We further find that, filed an Affidavit dated 05.12.2022 ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy considered at its face value, then there are only two possibilities viz., (a) either the selective portion wherein he stated the figure of total cost price of land acquired at Madurai was Rs.50 crores, is incorrect or (b) that he had erroneously averred a mistaken fact that, he had paid consideration to the extent of Rs.20 crores in cash. Overall, having regard to the facts and applying the test of human conduct and human probabilities, according to us, the more plausible inference is that, had factually erred in stating that, he had paid consideration of Rs.20 crores in cash out of the agreed consideration of particularly since the total cost price of Rs.50 crores has , entire of which is found to Shri R. Sabapathy had also retracted his statement on 21.03.2022 wherein he clarified , the noting of Rs.25 crores actually did not represent loan of Rs.25 , but instead it represented which was parked with ; and Rs.8 Crs. We further find that,Shri R. filed an Affidavit dated 05.12.2022 categorically retracting his statement the contents of his affidavit are I, R. SABAPATHY, Son of Thiru.B. Rajarathinam, residing at No. 10/15 Lakshmanan Street, T Nagar, Chennai under: I am the Managing Director of M/s Rare 98 Properties India Pvt. Ltd, having its registered office at No. 133, G.S.T.Road, Chrompet, Chennai -600044. On 22-01-2021, the said company and my son have purchased vacant land measuring 243 cents and 6 c Uthangudi Village, Madurai East Taluk, Madurai from K.Murugesan, Mr. P R Palanichamy and his two sons, P Senthil Kumar and P Suresh Kumar, residing at No.379, Sarveshwarar Temple Street, Anna Nagar, Madural through 4 documen S.No Doc. No. Purchaser 1 382/2021 Rare SS Properties India P. Ltd 2 381/2021 Rare SS Properties India P. Ltd 3 379/2021 Rare SS Properties India P. Ltd 4 380/2031 Roshan Sree Rathnam TOTAL iii. Besides the above, we have incurred stamp duty and registration charges of Rs.5,46,78,440/- The above purchases were made at a total cost of Rs. 55,16,82,440/- iv. The entire sale consideration was paid through Demand Drafts. I have paid any consideration over and above what is mentioned in the registered sale deeds. v. During the search proceedings & while recording my statement on 03/04 12-2021, I was under tremendous pressure and was not in a right frame of mind. Later I came to know that in the statement recorded I had stated that I have paid an amount of Rs.20 crores in cash towards purchase of Madurai property, which were not factually correct. ITA No. Mr.Pinnathevar Palanichamy ::26 :: retracting his statement that he had paid Rs.20 Crs. to the assessee, the contents of his affidavit are noted to be as under: Affidavit I, R. SABAPATHY, Son of Thiru.B. Rajarathinam, residing at No. 10/15 Lakshmanan Street, T Nagar, Chennai -600017, hereby declare and affirm I am the Managing Director of M/s Rare 98 Properties India Pvt. Ltd, having its registered office at No. 133, G.S.T.Road, Chrompet, Chennai 2021, the said company and my son have purchased vacant land measuring 243 cents and 6 cents, respectively, situated at Uthangudi Village, Madurai East Taluk, Madurai from K.Murugesan, Mr. P R Palanichamy and his two sons, P Senthil Kumar and P Suresh Kumar, residing at No.379, Sarveshwarar Temple Street, Anna Nagar, Madural through 4 documents, as tabulated below: Purchaser Survey No. Extent in cents Consideration (Rs.) Rare SS Properties India P. Ltd Old No: 170/24 New No. 170/242 (Part) 50 Rare SS Properties India P. Ltd Old No: 170/2A New No. 170/342 (Part) 50 Rare SS Properties India P. Ltd 170/3 (Part) 28.5 28.5 28.5 57.5 Roshan Sree Rathnam 170/3(Part) 6 TOTAL 249 iii. Besides the above, we have incurred stamp duty and registration charges of The above purchases were made at a total cost of Rs. iv. The entire sale consideration was paid through Demand Drafts. I have paid any consideration over and above what is mentioned in the registered v. During the search proceedings & while recording my statement on 03/04 2021, I was under tremendous pressure and was not in a right frame of to know that in the statement recorded I had stated that I have paid an amount of Rs.20 crores in cash towards purchase of Madurai property, which were not factually correct. ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy paid Rs.20 Crs. to the assessee, and I, R. SABAPATHY, Son of Thiru.B. Rajarathinam, residing at No. 10/15 600017, hereby declare and affirm as I am the Managing Director of M/s Rare 98 Properties India Pvt. Ltd, having its registered office at No. 133, G.S.T.Road, Chrompet, Chennai 2021, the said company and my son have purchased vacant ents, respectively, situated at Uthangudi Village, Madurai East Taluk, Madurai from K.Murugesan, Mr. P R Palanichamy and his two sons, P Senthil Kumar and P Suresh Kumar, residing at No.379, Sarveshwarar Temple Street, Anna Nagar, Consideration (Rs.) 9,98,00,000 9,98,00,000 5,68,86,000 5,68,85,000 5,68,86,000 11,47,70,000 1,19,76,000 49,70,04,000 iii. Besides the above, we have incurred stamp duty and registration charges of The above purchases were made at a total cost of Rs. iv. The entire sale consideration was paid through Demand Drafts. I have not paid any consideration over and above what is mentioned in the registered v. During the search proceedings & while recording my statement on 03/04- 2021, I was under tremendous pressure and was not in a right frame of to know that in the statement recorded I had stated that I have paid an amount of Rs.20 crores in cash towards purchase of Madurai 22. Before us, the Ld. DR for the Revenue has objected to the validity of the retraction furnished by Shri objection is not tenable on two fronts. The first being that, the original statement had been shown to be given on mistaken fact and also the subsequent retraction was not a bald one. Rather, the maker of the statement i.e., Shri R. notings to be pertaining to his undisclosed sales and also justified his retraction by stating that his original statement was given under pressure when he was not in right frame of mind. It is well settled in l though an admission is an extremely important piece of evidence, cannot be said to be conclusive incorrect or based on incorrect facts. For this, we gainfully rely on the decision of the Hon’ble Supreme Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18. In the present case, since the original statement was shown to have been based on incorrect facts and the correct & true version was also explained by Shri R Sabapathy in his retraction, the same cannot be rejected. 23. Secondly, we observe that, it was the Revenue which was relying on the original statement of Shri ITA No. Mr.Pinnathevar Palanichamy ::27 :: Before us, the Ld. DR for the Revenue has objected to the validity etraction furnished by Shri R. Sabapathy. According to us, such objection is not tenable on two fronts. The first being that, the original statement had been shown to be given on mistaken fact and also the subsequent retraction was not a bald one. Rather, the maker of the R. Sabapathy had explained the contents of the notings to be pertaining to his undisclosed sales and also justified his retraction by stating that his original statement was given under pressure when he was not in right frame of mind. It is well settled in l admission is an extremely important piece of evidence, cannot be said to be conclusive where the maker can show that it was or based on incorrect facts. For this, we gainfully rely on the decision of the Hon’ble Supreme Court rendered in the case of Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 . In the present case, since the original statement was shown to have been based on incorrect facts and the correct & true version was i R Sabapathy in his retraction, the same cannot be Secondly, we observe that, it was the Revenue which was relying on the original statement of Shri R. Sabapathy to draw adverse inference ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy Before us, the Ld. DR for the Revenue has objected to the validity . According to us, such objection is not tenable on two fronts. The first being that, the original statement had been shown to be given on mistaken fact and also the subsequent retraction was not a bald one. Rather, the maker of the Sabapathy had explained the contents of the notings to be pertaining to his undisclosed sales and also justified his retraction by stating that his original statement was given under pressure when he was not in right frame of mind. It is well settled in law that, admission is an extremely important piece of evidence, but it the maker can show that it was or based on incorrect facts. For this, we gainfully rely on the Court rendered in the case of Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 . In the present case, since the original statement was shown to have been based on incorrect facts and the correct & true version was i R Sabapathy in his retraction, the same cannot be Secondly, we observe that, it was the Revenue which was relying on to draw adverse inference against the assessee and therefore if the Revenue’s subsequently retracted from his original statement, then the onus was on the Revenue to cross-examine him and bring the correct facts on record. We find that, though the subsequent retraction of Shri brought on record in the co little to disprove the same or cross examine Shri summoning him. Rather he is found to have simply brushed the retractions surmising it to be an after approach of the AO was unjustified and therefore we are unable to countenance this argument of the Revenue objecting to the validity of the retraction furnished by Shri R Sabapathy. 24. Further, as noted above, the contents of the Page No.61 of document ID marked ANN/SK as such the contents of these loose notings could have only been possibly explained by the writer of these notings. The assessee clearly could not be expected to explain the same. Shri instructions these notings were purportedly made, had in his original statement, incriminated the assessee by stating that, the notings on this Page inter alia suggested that he had paid sum of Rs.20 crores to the assessee, although there was no mention of the figu assessee on this Page. Later on however, in his retraction, Shri ITA No. Mr.Pinnathevar Palanichamy ::28 :: against the assessee and therefore if the Revenue’s subsequently retracted from his original statement, then the onus was on examine him and bring the correct facts on record. We find that, though the subsequent retraction of Shri R. Sabapathy brought on record in the course of assessment, but the AO did precious little to disprove the same or cross examine Shri R. Sabapathy summoning him. Rather he is found to have simply brushed the retractions surmising it to be an after-thought. According to us, such e AO was unjustified and therefore we are unable to countenance this argument of the Revenue objecting to the validity of the retraction furnished by Shri R Sabapathy. Further, as noted above, the contents of the Page No.61 of ANN/SK/SSSLLP/B&D/S-2 was dumb in nature and as such the contents of these loose notings could have only been possibly explained by the writer of these notings. The assessee clearly could not be expected to explain the same. Shri R. Sabapathy ons these notings were purportedly made, had in his original statement, incriminated the assessee by stating that, the notings on this suggested that he had paid sum of Rs.20 crores to the assessee, although there was no mention of the figure ‘20’ or name of the assessee on this Page. Later on however, in his retraction, Shri ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy against the assessee and therefore if the Revenue’s witness had subsequently retracted from his original statement, then the onus was on examine him and bring the correct facts on record. R. Sabapathy was urse of assessment, but the AO did precious R. Sabapathy by summoning him. Rather he is found to have simply brushed the thought. According to us, such e AO was unjustified and therefore we are unable to countenance this argument of the Revenue objecting to the validity of the Further, as noted above, the contents of the Page No.61 of was dumb in nature and as such the contents of these loose notings could have only been possibly explained by the writer of these notings. The assessee clearly could not R. Sabapathy, at whose ons these notings were purportedly made, had in his original statement, incriminated the assessee by stating that, the notings on this suggested that he had paid sum of Rs.20 crores to the re ‘20’ or name of the assessee on this Page. Later on however, in his retraction, Shri R. Sabapathy stated that, the original statement was given by him under pressure and wasn’t in the related to his undisclosed sales wh Swarna Shilpi. According to us, on the given facts, the true nature of these bald notings could have only been known to Shri thus when he himself had later on retracted his original statem admitted the notings as his own undisclosed sales, then the assessee cannot be expected to further disprove his original statement, which as already noted above, was also found to be based on mistaken fact and hence was rebuttable. 25. In addition to the above, the Ld. AR pointed out to us that, the explanation given by the assessee in his retracted statement, is somewhat corroborated by the fact that, this pocket diary was found from the possession of the Purchases Manager who ordinarily would hav maintaining records of business transactions and not the personal transactions involving land deal of the Managing Director and therefore the notings could have related to undisclosed sales. He also referred to the stamp of Saravana Stores (Jewel) S according to him, suggested that, these notings may be relating to the business transactions of the said entity and not to the land deal between Shri R. Sabapathy and the assessee. ITA No. Mr.Pinnathevar Palanichamy ::29 :: stated that, the original statement was given by him under t in the his right frame of mind, and that these notings losed sales which proceeds, he had parked with M/s Swarna Shilpi. According to us, on the given facts, the true nature of these bald notings could have only been known to Shri R. Sabapathy thus when he himself had later on retracted his original statem admitted the notings as his own undisclosed sales, then the assessee cannot be expected to further disprove his original statement, which as already noted above, was also found to be based on mistaken fact and to the above, the Ld. AR pointed out to us that, the explanation given by the assessee in his retracted statement, is somewhat corroborated by the fact that, this pocket diary was found from the possession of the Purchases Manager who ordinarily would hav maintaining records of business transactions and not the personal transactions involving land deal of the Managing Director and therefore the notings could have related to undisclosed sales. He also referred to Saravana Stores (Jewel) Super LLP on this Page, which according to him, suggested that, these notings may be relating to the business transactions of the said entity and not to the land deal between and the assessee. ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy stated that, the original statement was given by him under and that these notings he had parked with M/s Swarna Shilpi. According to us, on the given facts, the true nature of R. Sabapathy and thus when he himself had later on retracted his original statement and admitted the notings as his own undisclosed sales, then the assessee cannot be expected to further disprove his original statement, which as already noted above, was also found to be based on mistaken fact and to the above, the Ld. AR pointed out to us that, the explanation given by the assessee in his retracted statement, is somewhat corroborated by the fact that, this pocket diary was found from the possession of the Purchases Manager who ordinarily would have been maintaining records of business transactions and not the personal transactions involving land deal of the Managing Director and therefore the notings could have related to undisclosed sales. He also referred to on this Page, which according to him, suggested that, these notings may be relating to the business transactions of the said entity and not to the land deal between 26. In light of the above retracted statement also the apparent infirmities pointed out by the assessee in his original statement, we are of the view that, Shri witness whose original statement cannot be relied upon and therefore the Ld. CIT(A) had rightly deleted the based on such unreliable statement 27. At this stage, we gainfully refer to the decision Madras High Court in the case of ITR 259). In the decided case the assessee and it was found that the assessee had purchased a land which was registered for Rs. 4.10 lakhs. The AO recorded the statement of the seller wherein he admitted that he had received consid Rs. 34.35 lakhs instead of Rs.4.10 lacs. The seller the statement but again subsequently filed an affidavit total consideration was received in demand draft a his return of income and offered the entire sale consideration of Rs.34.85 lacs to tax. The Assessing Officer added the alleged undisclosed sale consideration of undisclosed income of the purchaser Tribunal affirmed the order of the CIT(A) ITA No. Mr.Pinnathevar Palanichamy ::30 :: In light of the above retracted statement of Shri R. Sabapathy also the apparent infirmities pointed out by the assessee in his original statement, we are of the view that, Shri R. Sabapathy was an unreliable statement cannot be relied upon and therefore the Ld. CIT(A) had rightly deleted the impugned addition made by the AO based on such unreliable statement. At this stage, we gainfully refer to the decision Madras High Court in the case of CIT v. P.V. Kalyanasundaram (282 e decided case, search operations were conducted the assessee and it was found that the assessee had purchased a land which was registered for Rs. 4.10 lakhs. The AO recorded the statement of the seller wherein he admitted that he had received consid Rs. 34.35 lakhs instead of Rs.4.10 lacs. The seller later on the statement but again subsequently filed an affidavit Rs. 34.85 lakhs out of which Rs. 4.10 lakhs was received in demand draft and the balance in cash. The seller also revised his return of income and offered the entire sale consideration of Rs.34.85 lacs to tax. The Assessing Officer by relying upon the statement of seller added the alleged undisclosed sale consideration of Rs.30. undisclosed income of the purchaser i.e. the assessee. On the order of the CIT(A) deleting the addition, by ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy R. Sabapathy and also the apparent infirmities pointed out by the assessee in his original was an unreliable statement cannot be relied upon and therefore the impugned addition made by the AO At this stage, we gainfully refer to the decision of the Hon’ble P.V. Kalyanasundaram (282 search operations were conducted upon the assessee and it was found that the assessee had purchased a land which was registered for Rs. 4.10 lakhs. The AO recorded the statement of the seller wherein he admitted that he had received consideration of later on retracted from the statement but again subsequently filed an affidavit admitting that Rs. 34.85 lakhs out of which Rs. 4.10 lakhs was nd the balance in cash. The seller also revised his return of income and offered the entire sale consideration of Rs.34.85 relying upon the statement of seller of Rs.30.75 lacs by way . On appeal this deleting the addition, by observing that, the seller had given conflicting statements action of admitting sale co obvious effort to save himself from further harassment from the Revenue. The Tribunal noted that did not conduct any independent inquiry nor discharged the burden proving that the actual consideration received by the assessee was Rs.34.85 lacs. It was further observed that there was no material brought on record which would suggest that the assessee had under purchase consideration. have concurred with the findings of the Tribunal “5. We heard counsel. The seller had initially given conflicting statement about the sale consideration he received. When confronted by the Revenue on 11-12 4.10 lakhs received through draft in the bank a held by him in cash. The Revenue authorities could well have seized the cash invoking section 132 of the Act, but for obvious reasons this was not done. Had the cash been seized from the seller, the matter would have been concluded i submission, the seller claimed on 20 lakhs out of the sale proceeds to settle old family debts, Rs. 4.80 lakhs for construction of house in Pullkasi Village and the balance was advanced to parties for keeping Rs. 2 lakhs and Rs. 3 lakhs in the house for family expenses and educational expenses of his daughter, respectively. It was also noted that the revised return was filed by the seller wherein he had shown approximately Rs. 2.5 lakh with him in cash. Even after giving the retraction and admitting that he had sold the property for a sale consideration of Rs. 4.10 lakhs, the seller filed his income admit the cash on money con Subsequently he revised the income sale consideration and showing Rs. 4.80 lakhs out of the above as utilised for construction of residential house property and consequently claiming exemption under section 54, the seller filed the computation of ITA No. Mr.Pinnathevar Palanichamy ::31 :: the seller had given conflicting statements action of admitting sale consideration and paying tax was nothing but an obvious effort to save himself from further harassment from the Revenue. The Tribunal noted that, apart from the statement of the seller, the AO did not conduct any independent inquiry nor discharged the burden proving that the actual consideration received by the assessee was It was further observed that there was no material brought on record which would suggest that the assessee had under purchase consideration. On Revenue’s appeal, the High Court concurred with the findings of the Tribunal by observing as under : “5. We heard counsel. The seller had initially given conflicting statement about the sale consideration he received. When confronted by the 12-1998, the seller admitted that he had deposited Rs. 4.10 lakhs received through draft in the bank and the rest amount was held by him in cash. The Revenue authorities could well have seized the cash invoking section 132 of the Act, but for obvious reasons this was not done. Had the cash been seized from the seller, the matter would have been concluded in favour of the Revenue. In a subsequent submission, the seller claimed on 20-11-2000 that he had paid Rs. 15 lakhs out of the sale proceeds to settle old family debts, Rs. 4.80 lakhs for construction of house in Pullkasi Village and the balance was ed to parties for keeping Rs. 2 lakhs and Rs. 3 lakhs in the house for family expenses and educational expenses of his daughter, respectively. It was also noted that the revised return was filed by the seller wherein he had shown approximately Rs. 2.5 lakhs being available with him in cash. Even after giving the retraction and admitting that he had sold the property for a sale consideration of Rs. 4.10 lakhs, the seller filed his income-tax return on 28-1-2000, wherein he did not admit the cash on money consideration for the sale transaction. Subsequently he revised the income-tax return wherein he admitted the sale consideration and showing Rs. 4.80 lakhs out of the above as utilised for construction of residential house property and consequently xemption under section 54, the seller filed the computation of ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy the seller had given conflicting statements and that his nsideration and paying tax was nothing but an obvious effort to save himself from further harassment from the Revenue. apart from the statement of the seller, the AO did not conduct any independent inquiry nor discharged the burden of proving that the actual consideration received by the assessee was It was further observed that there was no material brought on record which would suggest that the assessee had under-stated the l, the High Court is noted to by observing as under :- “5. We heard counsel. The seller had initially given conflicting statement about the sale consideration he received. When confronted by the 1998, the seller admitted that he had deposited Rs. nd the rest amount was held by him in cash. The Revenue authorities could well have seized the cash invoking section 132 of the Act, but for obvious reasons this was not done. Had the cash been seized from the seller, the matter would n favour of the Revenue. In a subsequent 2000 that he had paid Rs. 15 lakhs out of the sale proceeds to settle old family debts, Rs. 4.80 lakhs for construction of house in Pullkasi Village and the balance was ed to parties for keeping Rs. 2 lakhs and Rs. 3 lakhs in the house for family expenses and educational expenses of his daughter, respectively. It was also noted that the revised return was filed by the s being available with him in cash. Even after giving the retraction and admitting that he had sold the property for a sale consideration of Rs. 4.10 lakhs, the 2000, wherein he did not sideration for the sale transaction. tax return wherein he admitted the sale consideration and showing Rs. 4.80 lakhs out of the above as utilised for construction of residential house property and consequently xemption under section 54, the seller filed the computation of income paying Rs. 1,83,576 as tax, which was quite evident from the conflicting statements given by the seller and the conflicting income returns filed by him that his action of admitting s paying tax was nothing but an obvious effort to save from further harassment from the Revenue and escape from the exigibility of tax on undisclosed income of the cash consideration under section 158BD of the Act, which in magnitude wo burden of proving actual consideration in such transaction was that of the Revenue… 6. We also found that the Assessing Officer did not conduct any independent enquiry relating to the value of the property purchased. merely relied on the statement given by the seller. If he would have taken independent enquiry by referring the matter with the Valuation Officer, the controversy could have been avoided. Failing to refer the matter was a fatal one. 7. In view of the f the Income-tax Appellate Tribunal and requires no interference. Hence no substantial questions of law arises for consideration of this Court. Accordingly, the above tax case is dismissed. No costs.” 28. The above findings of the Hon’ble High Court as well as the lower appellate authorities are noted to have been affirmed by the Hon’ble Supreme Court in their order reported in 29. We find that the above decision is applicable with equal force to the case of the assessee. Like in the decided case, originally admitted that he had paid on the assessee for purchase of land, which h the contents of Page No. 61 of document ID marked ANN/SK/SSSLLP/B&D/S notings pertained to the ITA No. Mr.Pinnathevar Palanichamy ::32 :: income paying Rs. 1,83,576 as tax, which was quite evident from the conflicting statements given by the seller and the conflicting income returns filed by him that his action of admitting sale consideration and paying tax was nothing but an obvious effort to save from further harassment from the Revenue and escape from the exigibility of tax on undisclosed income of the cash consideration under section 158BD of the Act, which in magnitude would far exceed the tax paid by him. The burden of proving actual consideration in such transaction was that of 6. We also found that the Assessing Officer did not conduct any independent enquiry relating to the value of the property purchased. merely relied on the statement given by the seller. If he would have taken independent enquiry by referring the matter with the Valuation Officer, the controversy could have been avoided. Failing to refer the matter was a fatal one. 7. In view of the foregoing conclusions, we find no error in the order of tax Appellate Tribunal and requires no interference. Hence no substantial questions of law arises for consideration of this Court. Accordingly, the above tax case is dismissed. No costs.” The above findings of the Hon’ble High Court as well as the lower appellate authorities are noted to have been affirmed by the Hon’ble Supreme Court in their order reported in 294 ITR 49. We find that the above decision is applicable with equal force to the Like in the decided case, Shri R. Sabapathy that he had paid on-monies of Rs.20 crores in cash to the assessee for purchase of land, which he later on retracted. contents of Page No. 61 of document ID marked ANN/SK/SSSLLP/B&D/S-2 on stand-alone basis does not prove that the notings pertained to the assessee and/or that it denoted payments ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy income paying Rs. 1,83,576 as tax, which was quite evident from the conflicting statements given by the seller and the conflicting income-tax ale consideration and paying tax was nothing but an obvious effort to save from further harassment from the Revenue and escape from the exigibility of tax on undisclosed income of the cash consideration under section 158BD of uld far exceed the tax paid by him. The burden of proving actual consideration in such transaction was that of 6. We also found that the Assessing Officer did not conduct any independent enquiry relating to the value of the property purchased. He merely relied on the statement given by the seller. If he would have taken independent enquiry by referring the matter with the Valuation Officer, the controversy could have been avoided. Failing to refer the oregoing conclusions, we find no error in the order of tax Appellate Tribunal and requires no interference. Hence no substantial questions of law arises for consideration of this Court. The above findings of the Hon’ble High Court as well as the lower appellate authorities are noted to have been affirmed by the Hon’ble We find that the above decision is applicable with equal force to the R. Sabapathy had monies of Rs.20 crores in cash to e later on retracted. Further, contents of Page No. 61 of document ID marked alone basis does not prove that the and/or that it denoted payments made to him. According to us therefore, th findings rendered by the Ld. CIT(A). 30. We also gainfully refer to the decision of the jurisdictional coordinate Bench of this Tribunal at Chennai Financers (P) Ltd Vs Dy CIT (17 SOT 5) action was conducted at business premises of assessee and also at premises of a known business associate, ‘KM’. From the premises of ‘KM’ an unsigned MoU between the assessee and five others on one hand and ‘KM’ and ‘KMR’ firm on the other, was purchase of 95 acres of land for a total consideration of Rs. 2,40,40,000/ was reflected. The AO however found that the actual consideration of land as disclosed by the assessee was Rs. 91 lakhs as against Rs. 2,40,40,000/ therefore added the differential sum as undisclosed income of the assessee. On appeal th statement of ‘KM’ recorded under section 132(4) is piece of evidence but the Assessing Officer has to establish the link with other seized documents. It was held that, t cannot be considered as the conclusive evidence. also held that, the words ‘may be presumed’ app and it only gives an ‘option’ to the authorities concerned to presume the ITA No. Mr.Pinnathevar Palanichamy ::33 :: According to us therefore, the above judgment supports the findings rendered by the Ld. CIT(A). We also gainfully refer to the decision of the jurisdictional coordinate Bench of this Tribunal at Chennai in the case of Financers (P) Ltd Vs Dy CIT (17 SOT 5). In the decided cas conducted at business premises of assessee and also at premises of a known business associate, ‘KM’. From the premises of ‘KM’ an unsigned MoU between the assessee and five others on one hand and ‘KM’ and ‘KMR’ firm on the other, was found wherein transaction for purchase of 95 acres of land for a total consideration of Rs. 2,40,40,000/ AO however found that the actual consideration of land as disclosed by the assessee was Rs. 91 lakhs as 0,000/- admitted by ‘KM’ vide the unsigned MoU therefore added the differential sum as undisclosed income of the On appeal this Tribunal noted that, although the sworn recorded under section 132(4) is piece of evidence but he Assessing Officer has to establish the link with other seized It was held that, the statement recorded from the third party cannot be considered as the conclusive evidence. Further, the Tribunal the words ‘may be presumed’ appear in section 132(4A) and it only gives an ‘option’ to the authorities concerned to presume the ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy e above judgment supports the We also gainfully refer to the decision of the jurisdictional in the case of M.M. . In the decided case, search conducted at business premises of assessee and also at premises of a known business associate, ‘KM’. From the premises of ‘KM’, an unsigned MoU between the assessee and five others on one hand and found wherein transaction for purchase of 95 acres of land for a total consideration of Rs. 2,40,40,000/- AO however found that the actual purchase consideration of land as disclosed by the assessee was Rs. 91 lakhs as admitted by ‘KM’ vide the unsigned MoU and therefore added the differential sum as undisclosed income of the although the sworn recorded under section 132(4) is piece of evidence but he Assessing Officer has to establish the link with other seized he statement recorded from the third party Further, the Tribunal ear in section 132(4A) and it only gives an ‘option’ to the authorities concerned to presume the things. The said option however is rebuttable and it does not give definite authority and that the assessee has every right to rebut the same by producing evidence in support of its claim & contentions. It was held that each case depends on the rule of evidence and the Revenue authorities cannot automatically presume things especially when the actual things are contrary to the facts and circumstances of case. Th that, the AO had blindly relied upon the original statement made by ‘KM’ and presumed the seized material to be fully true while making the addition. The Tribunal retracted his statement and it was also known that there was an existing dispute between the assessee and ‘KM’. pointed out various discrepancies in the seized material relied upon which were contrary to the contemporaneous accordingly held that, since evidence or material in support of the original statement as to why the original statement alone should addition made by the AO was deleted, by holding as under : “17. Regarding the sworn statement, the sworn statement recorded under section 132(4) is some piece of evidence. The Assessing Officer has to establish the link with other bo conclusive evidence. The words \"may be presumed\" appear in section 132(4A) of the Act. Since the words \"may be presumed\" are incorporated in the section, it gives option to the authorities concerned to rebuttable and it does not give definite authority and not a conclusive one. The assessee has every right to rebut the same by producing evidence in support of its claim. The entire case depends on the rule of evidence. The ITA No. Mr.Pinnathevar Palanichamy ::34 :: things. The said option however is rebuttable and it does not give definite he assessee has every right to rebut the same by ence in support of its claim & contentions. It was held that each case depends on the rule of evidence and the Revenue authorities cannot automatically presume things especially when the actual things are contrary to the facts and circumstances of case. The Tribunal noted blindly relied upon the original statement made by ‘KM’ and presumed the seized material to be fully true while making the addition. The Tribunal however observed that ‘KM’ had subsequently retracted his statement and it was also known that there was an existing dispute between the assessee and ‘KM’. Further, the assessee pointed out various discrepancies in the seized material relied upon which contemporaneous facts of the case. accordingly held that, since the AO did not bring any corroborative evidence or material in support of the original statement of ‘KM’ as to why the original statement alone should prevail, the impugned addition made by the AO was deleted, by holding as under : Regarding the sworn statement, the sworn statement recorded under section 132(4) is some piece of evidence. The Assessing Officer has to establish the link with other books of accounts seized. It cannot be considered as the conclusive evidence. The words \"may be presumed\" appear in section 132(4A) of the Act. Since the words \"may be presumed\" are incorporated in the section, it gives option to the authorities concerned to presume the things. But, it is rebuttable and it does not give definite authority and not a conclusive one. The assessee has every right to rebut the same by producing evidence in support of its claim. The entire case depends on the rule of evidence. The ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy things. The said option however is rebuttable and it does not give definite he assessee has every right to rebut the same by ence in support of its claim & contentions. It was held that each case depends on the rule of evidence and the Revenue authorities cannot automatically presume things especially when the actual things e Tribunal noted blindly relied upon the original statement made by ‘KM’ and presumed the seized material to be fully true while making the observed that ‘KM’ had subsequently retracted his statement and it was also known that there was an existing he assessee had also pointed out various discrepancies in the seized material relied upon which facts of the case. The Tribunal the AO did not bring any corroborative of ‘KM’ to prove , the impugned addition made by the AO was deleted, by holding as under :- Regarding the sworn statement, the sworn statement recorded under section 132(4) is some piece of evidence. The Assessing Officer has to establish oks of accounts seized. It cannot be considered as the conclusive evidence. The words \"may be presumed\" appear in section 132(4A) of the Act. Since the words \"may be presumed\" are incorporated in the section, presume the things. But, it is rebuttable and it does not give definite authority and not a conclusive one. The assessee has every right to rebut the same by producing evidence in support of its claim. The entire case depends on the rule of evidence. The assessee has every right to shift the burden of proof. The revenue authorities cannot automatically presume things. The actual things depend upon facts and circumstances of each case. The presumption under section 132(4A) as to the truth of contents of boo discretion of the authorities depending upon the facts, to decide whether presumption should be drawn or not. The expression used in this sub (4A) is \"may be presumed\" which is also the expres the Evidence Act and it was not a mandate that whenever books of accounts are seized, the authorities concerned shall so presume irrespective of any other factor which may dissuade the authorities from doing so. Therefore, the authorities concerned should draw the conclusion judicially, depending upon the facts and circumstances of the case. There is no conclusive presumption. 18. In the present case, K. Madhava Reddy retracted his statement even during the cross-examination. It among the assessee and K. Madhava Reddy as is evident from the answer to question No. 8 recorded on 26 order,… … 19. While determining the undisclosed income i Assessing Officer shall be specific in his statement. He cannot draw his reference on the basis of suspicion, conjectures or surmises. Suspicion, howsoever strong, cannot take place of matenal in support of findings of the Asses Assessing Officer should act in a judicial manner proceed with judicial spirit and should come to judicial conclusion. The Assessing Officer is required to act fairly as a reasonable person and not arbitrarily or capriciously. An assessme on inadequate material cannot stand on its own leg. The case law relied on by the learned Departmental Representative in the case of V. Kunhambu (supra) and Surjit Singh Chhabra (supra) and Kutty alias Lakshmi Narasimhan (supra) to support t that it should be ignored and original statement to be relied. In our opinion, these case law are not applicable to the facts of the case on hand. In these cases relied on by the learned Departmental statement and the retracted statement were by the assessee himself. In the present case, both the original statement and the retracted statement were made by a third party i.e. K. Madhava Reddy. Further, on cross K. Madhava Reddy denied his statement and the revenue is net having any corroborative evidence in support of the original statement to say that it should prevail. …. 22. In our opinion, there is no valid seized material representing addition of Rs. 1.49 lakhs towards undisclosed purchase consideration. It is only on surmise basis and statement recorded from third party, K. Madhava Reddy, and M/s. Shilpa Homes (P.) Ltd. This cannot be acted upon. The Circular No. F. No. 286/2/2003/IT(Inv.), dated 10 from recording confessional statement during the course of search and seizure ITA No. Mr.Pinnathevar Palanichamy ::35 :: every right to shift the burden of proof. The revenue authorities cannot automatically presume things. The actual things depend upon facts and circumstances of each case. The presumption under section 132(4A) as to the truth of contents of books or documents seized was rebuttable and it was in the discretion of the authorities depending upon the facts, to decide whether presumption should be drawn or not. The expression used in this sub (4A) is \"may be presumed\" which is also the expression used in section 114 of the Evidence Act and it was not a mandate that whenever books of accounts are seized, the authorities concerned shall so presume irrespective of any other factor which may dissuade the authorities from doing so. Therefore, the uthorities concerned should draw the conclusion judicially, depending upon the facts and circumstances of the case. There is no conclusive presumption. In the present case, K. Madhava Reddy retracted his statement even during examination. It is already a matter of fact’ that there is a dispute among the assessee and K. Madhava Reddy as is evident from the answer to question No. 8 recorded on 26-5-1999, appearing on p. 8 of the assessment While determining the undisclosed income in the block assessment, the Assessing Officer shall be specific in his statement. He cannot draw his reference on the basis of suspicion, conjectures or surmises. Suspicion, howsoever strong, cannot take place of matenal in support of findings of the Assessing Officer. The Assessing Officer should act in a judicial manner proceed with judicial spirit and should come to judicial conclusion. The Assessing Officer is required to act fairly as a reasonable person and not arbitrarily or capriciously. An assessme on inadequate material cannot stand on its own leg. The case law relied on by the learned Departmental Representative in the case of V. Kunhambu (supra) and Surjit Singh Chhabra (supra) and Kutty alias Lakshmi Narasimhan (supra) to support the retraction of the statement by Shri K. Madhava Ready that it should be ignored and original statement to be relied. In our opinion, these case law are not applicable to the facts of the case on hand. In these cases relied on by the learned Departmental Representative, the original statement and the retracted statement were by the assessee himself. In the present case, both the original statement and the retracted statement were made by a third party i.e. K. Madhava Reddy. Further, on cross- K. Madhava Reddy denied his statement and the revenue is net having any corroborative evidence in support of the original statement to say that it should 22. In our opinion, there is no valid seized material representing addition of Rs. lakhs towards undisclosed purchase consideration. It is only on surmise basis and statement recorded from third party, K. Madhava Reddy, and M/s. Shilpa Homes (P.) Ltd. This cannot be acted upon. The Circular No. F. No. 286/2/2003/IT(Inv.), dated 10-3-2003 clearly refrains the Assessing Officer from recording confessional statement during the course of search and seizure ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy every right to shift the burden of proof. The revenue authorities cannot automatically presume things. The actual things depend upon facts and circumstances of each case. The presumption under section 132(4A) as to the ks or documents seized was rebuttable and it was in the discretion of the authorities depending upon the facts, to decide whether presumption should be drawn or not. The expression used in this sub-section sion used in section 114 of the Evidence Act and it was not a mandate that whenever books of accounts are seized, the authorities concerned shall so presume irrespective of any other factor which may dissuade the authorities from doing so. Therefore, the uthorities concerned should draw the conclusion judicially, depending upon the facts and circumstances of the case. There is no conclusive presumption. In the present case, K. Madhava Reddy retracted his statement even during is already a matter of fact’ that there is a dispute among the assessee and K. Madhava Reddy as is evident from the answer to 1999, appearing on p. 8 of the assessment n the block assessment, the Assessing Officer shall be specific in his statement. He cannot draw his reference on the basis of suspicion, conjectures or surmises. Suspicion, howsoever strong, sing Officer. The Assessing Officer should act in a judicial manner proceed with judicial spirit and should come to judicial conclusion. The Assessing Officer is required to act fairly as a reasonable person and not arbitrarily or capriciously. An assessment made on inadequate material cannot stand on its own leg. The case law relied on by the learned Departmental Representative in the case of V. Kunhambu & Sons (supra) and Surjit Singh Chhabra (supra) and Kutty alias Lakshmi Narasimhan he retraction of the statement by Shri K. Madhava Ready that it should be ignored and original statement to be relied. In our opinion, these case law are not applicable to the facts of the case on hand. In these Representative, the original statement and the retracted statement were by the assessee himself. In the present case, both the original statement and the retracted statement were -objection also, K. Madhava Reddy denied his statement and the revenue is net having any corroborative evidence in support of the original statement to say that it should 22. In our opinion, there is no valid seized material representing addition of Rs. lakhs towards undisclosed purchase consideration. It is only on surmise basis and statement recorded from third party, K. Madhava Reddy, and M/s. Shilpa Homes (P.) Ltd. This cannot be acted upon. The Circular No. F. No. clearly refrains the Assessing Officer from recording confessional statement during the course of search and seizure and survey operations and also warns the Assessing Officer not to attempt to obtain any confessional statement as to the undisclosed incom contrary shall be viewed adversely. It also states that the Assessing Officer should rely upon the evidence and material gathered during the course of search. Here in the present case, the evidence is only agreement which reflects the purchase consideration at Rs. 2.40 crores and the recorded statement shows the sale consideration of 22 acres at Rs. 3,62,18.000. The third party statement and unsigned agreement cannot be acted upon. … 24. …Further, the loose papers found during the course o of K. Madhava Ready are a dumb form having no evidential value. No addition can be made on the basis of noting on loose sheets in the absence of corroborative material. The revenue has not found any circumstantial evidence in the form of any investments in cash, jewellery or others. They found only Rs. 6,73,610 in cash at the assessee’s explain the loose papers found at the premises of K. Madhava Reddy. Further, there is no evidence for the pay other than entered in the books of accounts. Similarly, there is no evidence for the payment of money towards purchase consideration by the assessee to M/s. K.M.R. Estates & Builders (P.) Ltd. other than Rs. 91 la failed to establish the payment of Rs. 2.40 crores as purchase consideration for the acquisition of 22 acres of land and he has failed to prove the payment. Hence, we have no other alternative but to rely on the books of accounts maintained by the assessee according to which the purchase consideration was Rs. 91 lakhs and this has properly tallied with the sworn statement of the assessee. 25. The sale consideration of Rs. 3.62 crores for the sale of 22 acres of land vide agreement dated 25 assessee is not a party and there is a valid agreement dated 1 the assessee is a party and the payment in this agreement properly tallies with the books of accounts maintained sale consideration of Rs. 1,12,37,332 is properly disclosed by the assessee and the difference of Rs. 3,14,812 is interest for the delayed payment. This plea of the assessee, in our opinion, is having merit. 1997 cannot be said that it is an afterthough since it is the part of seized material. The assessee is justified in offering the difference between Rs. 1,15,52,148 and Rs. 91,00,000 as undisclosed income at Rs. 24,52,148. Sinc we have already held that there is no purchase consideration of Rs. 2,40,40,000 there is no question of computing the short of sale consideration of Rs. 3,62,18,000. Accordingly, we allow the grounds taken by the assessee.” 31. We also refer to the decision of the the case of Addl. CIT v. Miss Lata Mangeshkar [1974] 97 ITR 696 ITA No. Mr.Pinnathevar Palanichamy ::36 :: and survey operations and also warns the Assessing Officer not to attempt to obtain any confessional statement as to the undisclosed income, and any action contrary shall be viewed adversely. It also states that the Assessing Officer should rely upon the evidence and material gathered during the course of search. Here in the present case, the evidence is only agreement which reflects chase consideration at Rs. 2.40 crores and the recorded statement shows the sale consideration of 22 acres at Rs. 3,62,18.000. The third party statement and unsigned agreement cannot be acted upon. …Further, the loose papers found during the course of search at the premises of K. Madhava Ready are a dumb form having no evidential value. No addition can be made on the basis of noting on loose sheets in the absence of corroborative material. The revenue has not found any circumstantial evidence orm of any investments in cash, jewellery or others. They found only Rs. 6,73,610 in cash at the assessee’s place. The assessee is not expected to explain the loose papers found at the premises of K. Madhava Reddy. Further, there is no evidence for the payment of money to the assessee by any party other than entered in the books of accounts. Similarly, there is no evidence for the payment of money towards purchase consideration by the assessee to M/s. K.M.R. Estates & Builders (P.) Ltd. other than Rs. 91 lakhs. The Assessing Officer failed to establish the payment of Rs. 2.40 crores as purchase consideration for the acquisition of 22 acres of land and he has failed to prove the payment. Hence, we have no other alternative but to rely on the books of accounts maintained by the assessee according to which the purchase consideration was Rs. 91 lakhs and this has properly tallied with the sworn statement of the 25. The sale consideration of Rs. 3.62 crores for the sale of 22 acres of land vide dated 25-3-1997 (Annex. ‘D’ to assessment order) for which the assessee is not a party and there is a valid agreement dated 1-1- the assessee is a party and the payment in this agreement properly tallies with the books of accounts maintained by the assessee. Therefore, in our opinion, the sale consideration of Rs. 1,12,37,332 is properly disclosed by the assessee and the difference of Rs. 3,14,812 is interest for the delayed payment. This plea of the assessee, in our opinion, is having merit. The valid agreement dated 1 1997 cannot be said that it is an afterthough since it is the part of seized material. The assessee is justified in offering the difference between Rs. 1,15,52,148 and Rs. 91,00,000 as undisclosed income at Rs. 24,52,148. Sinc we have already held that there is no purchase consideration of Rs. 2,40,40,000 there is no question of computing the short-term capital gain on the difference of sale consideration of Rs. 3,62,18,000. Accordingly, we allow the grounds see.” We also refer to the decision of the Hon'ble Bombay High Court in Addl. CIT v. Miss Lata Mangeshkar [1974] 97 ITR 696 ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy and survey operations and also warns the Assessing Officer not to attempt to e, and any action contrary shall be viewed adversely. It also states that the Assessing Officer should rely upon the evidence and material gathered during the course of search. Here in the present case, the evidence is only agreement which reflects chase consideration at Rs. 2.40 crores and the recorded statement shows the sale consideration of 22 acres at Rs. 3,62,18.000. The third party statement f search at the premises of K. Madhava Ready are a dumb form having no evidential value. No addition can be made on the basis of noting on loose sheets in the absence of corroborative material. The revenue has not found any circumstantial evidence orm of any investments in cash, jewellery or others. They found only Rs. place. The assessee is not expected to explain the loose papers found at the premises of K. Madhava Reddy. Further, ment of money to the assessee by any party other than entered in the books of accounts. Similarly, there is no evidence for the payment of money towards purchase consideration by the assessee to M/s. khs. The Assessing Officer failed to establish the payment of Rs. 2.40 crores as purchase consideration for the acquisition of 22 acres of land and he has failed to prove the payment. Hence, we have no other alternative but to rely on the books of accounts maintained by the assessee according to which the purchase consideration was Rs. 91 lakhs and this has properly tallied with the sworn statement of the 25. The sale consideration of Rs. 3.62 crores for the sale of 22 acres of land vide 1997 (Annex. ‘D’ to assessment order) for which the -1997 to which the assessee is a party and the payment in this agreement properly tallies with by the assessee. Therefore, in our opinion, the sale consideration of Rs. 1,12,37,332 is properly disclosed by the assessee and the difference of Rs. 3,14,812 is interest for the delayed payment. This plea of The valid agreement dated 1-1- 1997 cannot be said that it is an afterthough since it is the part of seized material. The assessee is justified in offering the difference between Rs. 1,15,52,148 and Rs. 91,00,000 as undisclosed income at Rs. 24,52,148. Since we have already held that there is no purchase consideration of Rs. 2,40,40,000 term capital gain on the difference of sale consideration of Rs. 3,62,18,000. Accordingly, we allow the grounds Hon'ble Bombay High Court in Addl. CIT v. Miss Lata Mangeshkar [1974] 97 ITR 696. In the said case, the ITO came across a sort of a ledger maintained by firm known as Vasu Films of Madras been seized by the Income Tax said firm. In the diary, some amount was written as \"W\" and some amount was written as \"B\" against the name of the assessee. In the statement recorded from Mr. VasudevMenon, Managing partner of Vasu Films and from Mr. C.S. Kumar, Firm's Bombay manager, the above said entries were explained by them as the letter \"W\" would mean \"white\" and the letter \"B\" would mean \"Black\". cross-examine these persons. Thereafter, the Assessing Officer accepted the entries recorded in the diary and came to the conclusion that the assessee has concealed income. Accordingly, he made additions. Before the Tribunal, it was contended on b evidences on which lower authorities had relied, merely created suspicion that the assessee might have take place of proof. The Tribunal, after appreciating piece of came to the conclusion that the evidences were not sufficient to prove even a single evidence, where received money in black for which she did not pass a receipt. Accordingly the Tribunal deleted the addition made by the AO. High Court has upheld the view decision supports the case of the assessee also. ITA No. Mr.Pinnathevar Palanichamy ::37 :: In the said case, the ITO came across a sort of a ledger maintained by firm known as Vasu Films of Madras containing certain entries, which had been seized by the Income Tax authority from the premises of the above said firm. In the diary, some amount was written as \"W\" and some amount was written as \"B\" against the name of the assessee. In the ded from Mr. VasudevMenon, Managing partner of Vasu Films and from Mr. C.S. Kumar, Firm's Bombay manager, the above said entries were explained by them as the letter \"W\" would mean \"white\" and the letter \"B\" would mean \"Black\". The assessee given an opport examine these persons. Thereafter, the Assessing Officer accepted the entries recorded in the diary and came to the conclusion that the assessee has concealed income. Accordingly, he made additions. Before the Tribunal, it was contended on behalf of the assessee that entire evidences on which lower authorities had relied, merely created suspicion that the assessee might have accepted payments in black but it did not take place of proof. The Tribunal, after appreciating piece of to the conclusion that the evidences were not sufficient to prove even a single evidence, where the assessee could be said to have received money in black for which she did not pass a receipt. Accordingly the Tribunal deleted the addition made by the AO. The Hon'ble Bombay High Court has upheld the view taken by the Tribunal. In our view, this decision supports the case of the assessee also. ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy In the said case, the ITO came across a sort of a ledger maintained by the containing certain entries, which had authority from the premises of the above said firm. In the diary, some amount was written as \"W\" and some amount was written as \"B\" against the name of the assessee. In the ded from Mr. VasudevMenon, Managing partner of Vasu Films and from Mr. C.S. Kumar, Firm's Bombay manager, the above said entries were explained by them as the letter \"W\" would mean \"white\" and The assessee given an opportunity to examine these persons. Thereafter, the Assessing Officer accepted the entries recorded in the diary and came to the conclusion that the assessee has concealed income. Accordingly, he made additions. Before ehalf of the assessee that entire evidences on which lower authorities had relied, merely created suspicion accepted payments in black but it did not take place of proof. The Tribunal, after appreciating piece of evidence, to the conclusion that the evidences were not sufficient to prove the assessee could be said to have received money in black for which she did not pass a receipt. Accordingly, The Hon'ble Bombay taken by the Tribunal. In our view, this 32. In the present case, also the entries in the seized document on stand-alone basis are found to be dumb in natur the assessee and therefore it could not have been relied upon. Further, Shri R Sabapathy’s original statement incriminating the assessee by stating that these notings monies of Rs.20 crores paid towards purchase of land from the assessee for aggregate cost of Rs.50 crores is found to based on mistaken fact and therefore was unreliable; and the said statement had later on been retracted as well. As noted above, the retraction made by Shri R Sabapathy was found to be justifiable. Further, the assessee had also always denied the original statement of Shri R Sabapathy. We countenance the finding of the Ld.CIT(A) that, the admission if made by a maker against himself is an important piece of when it comes to a statement against another person (3 requirement of corroboration is a must; and in the given facts of the present case, there was no such corroborative evidence. Rather, the contemporaneous facts question had been transferred at the value of Rs.50 crores, as mentioned in the original statement, but the entire consideration was actually received in demand drafts and that the sale price was more than times the guideline value. On these facts therefore, the original statement of Shri R Sabapathy that he had taken loan from M/s.Swarna Shilpi to pay ITA No. Mr.Pinnathevar Palanichamy ::38 :: In the present case, also the entries in the seized document on alone basis are found to be dumb in nature, having no linkage with the assessee and therefore it could not have been relied upon. Further, Shri R Sabapathy’s original statement incriminating the assessee by stating that these notings inter alia denoted the cash payment of on s paid towards purchase of land from the assessee for aggregate cost of Rs.50 crores is found to based on mistaken fact and therefore was unreliable; and the said statement had later on been retracted as well. As noted above, the retraction made by Shri R Sabapathy was found to be justifiable. Further, the assessee had also always denied the original statement of Shri R Sabapathy. We countenance the finding of the Ld.CIT(A) that, the admission if made by a maker against himself is an important piece of evidence against him; but when it comes to a statement against another person (3 requirement of corroboration is a must; and in the given facts of the present case, there was no such corroborative evidence. Rather, the disproved the theory of the AO as the property in question had been transferred at the value of Rs.50 crores, as mentioned in the original statement, but the entire consideration was actually received in demand drafts and that the sale price was more than times the guideline value. On these facts therefore, the original statement of Shri R Sabapathy that he had taken loan from M/s.Swarna Shilpi to pay ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy In the present case, also the entries in the seized document on e, having no linkage with the assessee and therefore it could not have been relied upon. Further, Shri R Sabapathy’s original statement incriminating the assessee by denoted the cash payment of on- s paid towards purchase of land from the assessee for aggregate cost of Rs.50 crores is found to based on mistaken fact and therefore was unreliable; and the said statement had later on been retracted as well. As noted above, the retraction made by Shri R Sabapathy was found to be justifiable. Further, the assessee had also always denied the original statement of Shri R Sabapathy. We also countenance the finding of the Ld.CIT(A) that, the admission if made by a evidence against him; but when it comes to a statement against another person (3rd person), the requirement of corroboration is a must; and in the given facts of the present case, there was no such corroborative evidence. Rather, the disproved the theory of the AO as the property in question had been transferred at the value of Rs.50 crores, as mentioned in the original statement, but the entire consideration was actually received in demand drafts and that the sale price was more than 2.28 times the guideline value. On these facts therefore, the original statement of Shri R Sabapathy that he had taken loan from M/s.Swarna Shilpi to pay Rs.20 crores in cash by way of on unbelievable and per-se wrong CIT(A) had rightly deleted the impugned addition of Rs.20 crores made by the AO. 33. Overall therefore, and for the reasons set out above, reason to interfere with the order of the Ld. CIT(A). Accordingly, all the grounds taken by the Revenue are dismissed. 34. Coming to the cross were raised in support of the order of Ld.CIT(A) and of our above findings dismissing the appeal of the Revenue, the cross objection of the assessee is found to have been rendered infructuous and is therefore dismissed. 35. In the result, appeal filed by the by the assessee are dismissed. Order pronounced on the Sd/- (अिमताभ शु\u0018ा) (AMITABH SHUKLA लेखासद\u0007य/ACCOUNTANT MEMBER चे\u0003ई/Chennai, \u0005दनांक/Dated: 29th April, 20 TLN ITA No. Mr.Pinnathevar Palanichamy ::39 :: Rs.20 crores in cash by way of on-monies to the assessee is found to be se wrong. Consequently, we hold that, the Ld. CIT(A) had rightly deleted the impugned addition of Rs.20 crores made by Overall therefore, and for the reasons set out above, reason to interfere with the order of the Ld. CIT(A). Accordingly, all the grounds taken by the Revenue are dismissed. Coming to the cross-objections of the assessee, it is noted that they were raised in support of the order of Ld.CIT(A) and therefore, in the light of our above findings dismissing the appeal of the Revenue, the cross objection of the assessee is found to have been rendered infructuous and In the result, appeal filed by the Revenue and Cross- by the assessee are dismissed. Order pronounced on the 29th day of April, 2025, in Chennai. AMITABH SHUKLA) /ACCOUNTANT MEMBER Sd/ (एबी टी. (ABY T. VARKEY याियकसद\u0007य/JUDICIAL MEMBER , 2025. ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy monies to the assessee is found to be . Consequently, we hold that, the Ld. CIT(A) had rightly deleted the impugned addition of Rs.20 crores made by Overall therefore, and for the reasons set out above, we see no reason to interfere with the order of the Ld. CIT(A). Accordingly, all the objections of the assessee, it is noted that they therefore, in the light of our above findings dismissing the appeal of the Revenue, the cross- objection of the assessee is found to have been rendered infructuous and -Objection filed , in Chennai. Sd/- . वक ) ABY T. VARKEY) /JUDICIAL MEMBER आदेश क \u000eितिलिप अ\u0014ेिषत/Copy to 1. अपीलाथ /Appellant 2. \u000e\u000fथ /Respondent 3. आयकरआयु\u0015/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय\u000eितिनिध/DR 5. गाड फाईल/GF ITA No. Mr.Pinnathevar Palanichamy ::40 :: Copy to: , Chennai / Madurai / Salem / Coimbatore. ITA No.3015 /Chny/2024 CO No.4/Chny/2025 (AY 2021-22) Pinnathevar Palanichamy , Chennai / Madurai / Salem / Coimbatore. "