SADHU RAM GUPTA,DHURI, SANGRUR V. ITO, WARD-1, MALERKOTLA, PUNJAB

ITA 874/CHANDI/2025

AI Insights

The case involves Shri Sadhu Ram Gupta, who appealed against the orders of the Commissioner of Income Tax (Appeals) for the assessment years 2017-18 and 2020-21. The primary issues revolved around the legality of the re-assessment under Section 147 read with Section 144B for A.Y. 2017-18, instead of Section 153C, and the validity of additions made to his income for both years based on alleged unexplained cash payments for property transactions. The Tribunal examined the procedural and substantive aspects of the assessments, including the use of seized materials and the opportunity for cross-examination, ultimately finding in favor of the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717339 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2020-2021
• Appeal Filed On: 30-06-2025
• Other Referred Cases: Shri Naveen Kumar Gupta Vs ITO, New Delhi, State of Jammu and Kashmir vs. Bakshi Ghulam Mohammad, M/s Vallabh textiles vs Addl. Commissioner, CGST, Mohamma Muzzamil vs. CBIC, CIT vs Met Products of India, ITO Vs Vikram Sujitkumar Bhatia, Andaman Timber Industries Vs Commissioner of Central Excise
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR
• Assessee Lawyers: PARIKSHIT AGGARWAL
• Keywords: Set aside; Retrospective amendment; Unexplained investment; Document seized; Documents seized; Principle of natural justice; Rule 8D
• Section: 147; 148; 144; 132

Judgement Text

"आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ ITA Nos. 873 & 874/CHD/2025 Ǔनधा[रण वष[ / A.Y. : 2017-18 & 2020-21 Shri Sadhu Ram Gupta, House No. 263, W.No. 15B, Sangrur, Tehsil Mohalla Dhuri, Sangrur. Vs The ITO, Ward-1, Malerkotla. èथायी लेखा सं./PAN NO: ADDPG0223H अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Assessee by : Shri Parikshit Aggarwal, CA Revenue by : Dr. Ranjit Kaur, Addl. CIT Sr.DR Date of Hearing : 23.07.2025 & 21.07.2025 Date of Pronouncement : 12.08.2025 PHYSICAL HEARING O R D E R PER RAJPAL YADAV, VP The present two appeals are directed against the common order dated 24.06.2025 passed by the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] on the appeals of the assessee for assessment year 2017-18 and 2020-21. 2. The assessee has taken six grounds of appeal in assessment year 2017-18 and five grounds of appeal in assessment year 2020-21. A perusal of these grounds would Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 2 reveal that basically his grievances revolve around two issues, namely ; a) The ld. CIT (Appeals) has erred in confirming the re- opening of assessment in assessment year 2017-18, the assessment ought to have been passed u/s 153C instead of 144 read with Section 147 of the Income Tax Act. b) The ld. CIT (Appeals) has erred in confirming the addition of Rs.87,34,000/- and Rs.34,00,000/- in assessment year 2017-18 and 2020-21 respectively. 3. The facts on all vital points are common in both the years. For the facility of reference, we take the facts from assessment year 2017-18. 4. The ld. A.O. has observed that a search u/s 132 of the Income Tax Act was conducted in the case of Homeland Group of Cases on 26.02.2020. The Dy. Director of Income Tax (Investigation)-II, Ludhiana put information on the insight portal of Income Tax exhibiting the fact that assessee has purchased a flat No. 42 in Tower No. 5 at Project of Homeland Heights, Sector 70, Mohali for a consideration of Rs.1,19,23,000/-. According to the AO, the assessee has Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 3 made a payment of Rs.92,34,000/- including cash of Rs.87,34,000/- during financial year 2016-17 relevant for assessment year 2017-18. Similarly, he observed that assessee has paid a sum of Rs.1 lac on 30.01.2020 for office space. Somehow, this booking was cancelled by the assessee and an amount of Rs.1 lac was received through Account Payee Cheque on 05.11.2021. 5. The AO has harboured the belief on the basis of information collected during the course of search at the developer that assessee has made payment in cash over and above the amounts stated in the Sale Deed for purchase of flat and booking of the office space. He was of the view that this office space booking was cancelled by the assessee because of the search conducted on the builder but that does not absolve the assessee for explaining the alleged payment of cash for purchase of the office space. The ld. AO has made a reference to the material discovered during the course of search at the premises of the developer. He basically made reference to two laptops recovered from Shri Monu and Shri Sanjiv Garg. According to the AO, though Shri Monu was an erstwhile Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 4 employee of the assessee who later on joined M/s AB Alcobev Pvt. Ltd. The AO observed that an analysis of the retrieved information from these laptops would indicate that expression ‘Discount/CA' has been used against certain amounts which was explained by the owner of the laptop as cash component received from purchaser of the flats/office space. Armed with this material, AO concluded that assessee has made payment in cash over and above the amount stated in the Sale Deed for purchase of the flat as well as for booking of an office space. The assessee requested the AO to supply him complete details of the alleged seized material and thereafter allow him to cross examine these two persons, so that it can be unearthed as to how he made the payment in cash. The ld. AO has rejected this request of the assessee and accordingly, made the addition of Rs.87,34,000/- in assessment year 2017-18 and Rs.34,00,000/- in assessment year 2020-21. 6. Appeal to the ld.CIT (Appeals) did not bring any relief to the assessee. the relevant discussion made by the CIT (Appeals) reads as under : “The appellant has relied upon the order of Hon'ble ITAT in the case of another assessee stating that the Hon'ble Tribunal has allowed the appeal of the other assessee in view of the fact that no opportunity for cross- Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 5 examination was provided to that assessee to counter the statement of Shri Monu. However, with due respect to the decision in the other case based on facts of other case, a perusal of the assessment order in the case of the appellant reveals that the AO in the instant case has brought out detailed facts and in the case of the appellant, it is seen that additionally, the statement of Shri Sanjiv Kumar Garg, Accountant has been given due weightage and in fact, it is seen that he is signatory to agreements and involved in sales relating to Project CP-67 i.e. one relating to the appellant. Shri Sanjiv Kumar Garg, is a close, key, reliable and trusted employee of M/s Homeland Group and played key role in both entities i.e. M/s Homeland Buildwell P. Ltd. and M/s AB Alcobev P. Ltd. The statements are further supported, reiterated and corroborated by the statements of Shri Amit Gupta recorded u/sl32(4) of the Act during search action, who is also a close, key, reliable and trusted employee of main persons of these entities. Thus, even if Shri Monu joined new, it does not impact the modus operandi of generating unaccounted cash by these entities. The meticulously maintained data found in both the laptops sufficiently corroborates with the statements on oath recorded during search of above stated key persons. Cross-examination is crucial when one person has given statement but where several key persons gave the statement strengthening each other's revelations independently, then there remains no requirement to fulfil the necessity of cross- examination as held by Hon'ble Supreme Court in the case of State of Jammu and Kashmir vs. Bakshi Ghulam Mohammad (196/ AIR 122) wherein it was held that the question of cross-examination largely depends or the facts and circulation of the case. Similarly, in the case of M/s Vallabh textiles vs Addl. Commissioner, CGST (Delhi High Court) (WP (C) 4576/2025), it was held that: Right to cross-examination is not absolute. Here the cross examination of witness was no allowed and it was held that denial alone does not automatically invalidate adjudication, as cross examination is not an unfettered right especially when statements are corroborative of undisputed documentary evidence. It relied upon case of Mohamma Muzzamil vs. CBIC, Telangana High Court. 5.2 Further, in a situation where both builder and buyer are adversely affected yb confession of various key persons during a search or survey, and there is no objection by the company owners at that time, then it amounts to tacit acceptance of facts admitted in the statements recorded on oath during search. 5.3 There should be a material evidence which includes direct and circumstantial evidence, as held by Hon'ble Punjab and Haryana High Court in the case of CIT vs Met Products of India 150 ITR 714 (P&H) (1984). Hence, in instant case of the appellant these was excel sheet data on laptop seized, which was corroborated with various statements u/s 132(4). 5.4 Further, the authenticity of excel sheet data in laptop is proved by the fact that Rs. 1 lakh was paid and returned by cheque is also a matter of record and admitted by all the parties involved. The story of affidavit by Sh. Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 6 Umang Jindal that no cash was received from the appellant is also not convincing as elaborated by the AO (para 41 to 51 of AO's order). 5.5 Thus, in view of above discussions, the addition of Rs.34,00,000/- u/s 69 made by the AO as unexplained investment is sustained and the grounds of appeal no. 3 to 4 are dismissed. Similarly, the addition of Rs.87,34,000/- u/s 69 made by the AO for the AY 2017-18 as unexplained investment is sustained.” 7. The ld. counsel for the assessee, while impugning the orders of CIT (Appeals) submitted that as far as assessment year 2017-18 is concerned, the re-assessment order passed u/s 147 read with Section 143(3)/144B is not sustainable because AO is using seized material discovered at the premises of the searched person against the person who was not covered under the search operation. In such cases, assessment has to be made u/s 153C of the Income Tax Act. He made reference to his written submissions filed before CIT (Appeals) wherein the judgement passed in ‘Shri Naveen Kumar Gupta Vs ITO, New Delhi’ ITA 592/Del/2020 is being referred. There are few judgements which are mentioned at page No.152 to 156 of the Paper Book, were also referred by the ld. counsel for the assessee. He further contended that identical issue has been examined by the ITAT Chandigarh Bench and he relied upon the order of the ITAT which we will be referring. As far as assessment year 2020-21 is concerned, Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 7 he submitted that once the assessee has cancelled the booking, how it can be assumed or construed that assessee would have made the payment in cash. The deal was never materialized. 8. The ld. DR on the other hand, relied upon the orders of Revenue Authorities. 9. We have duly considered the rival contentions and gone through the record carefully. We take the first proposition involved in assessment year 2017-18, whether the assessment u/s 147 is legally sustainable or not. In other words, whether the AO ought to have passed the assessment order u/s 153C or 147 read with Section 143(3). 10. Section 153(C) of the Income Tax Act after its amendment by Finance Act, 2015 has a direct bearing on the controversy, therefore, we deem it appropriate to take note of this Section, which read as under : 153C. Assessment of income of any other person.—(1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,— (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 8 (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153-A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153-A: Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132-A in the second proviso to sub-section (1) of section 153-A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person: Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years as referred to in sub-section (1) of section 153-A except in cases where any assessment or reassessment has abated. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132-A and in respect of such assessment year— (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 9 total income of such other person of such assessment year in the manner provided in section 153-A.\" 11. A bare perusal of this Section would reveal that it starts with a non obstante clause “not withstanding anything contained in Section” meaning thereby this Section has an over-riding effect over other Sections namely; 139, 147, 148, 149 etc. This Section contemplates that where AO of the searched person is satisfied that ; a) Any money, bullion, jewellery, other valuable article or thing seized or requisitioned belong to or b) Any books of account, document seized or requisitioned pertains or pertains to or any information contained therein relates to a person other than the person referred in Section 153A, then AO of the searched person would record his satisfaction and transmit those materials to the AO of such other person qua whom these materials have been found during the course of search. Prior to Finance Act, 2015, this Section was not in the present shape. It has been divided in two categories post 2015. The first limb of Section deals with items discovered in physical form i.e. money, bullion, jewellery and the second limb of Section provides if any books of account, Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 10 documents seized or requisitioned pertains or pertains to or any information contained therein pertains to a person other than the person covered under Section 153A, then procedure contemplated under Section 153C is required to be followed. In the old Section, only sub-clause (1) was available, however in the post amendment, this sub-clause (1) has been divided in (a) and (b). Under sub-clause (b), the scope of the Section has been amplified. It provides that any books of account, documents seized or requisitioned pertains or pertains to or any information contained therein relates to a person other than the person referred in Section 153A, then also notice under Section 153C is mandatory. 12. Before embarking on an enquiry further, we deem it appropriate to take note of the judgement of Hon'ble Supreme Court in the case of ITO Vs Vikram Sujitkumar Bhatia reported in 149 taxman.com 123. The basic reason for taking cognizance of this judgement at this stage is the assessment year involved herein is assessment year 2017- 18 and we are taking cognizance of Section 153C as Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 11 amended by Finance Act, 2015. In this judgement, Hon'ble Supreme Court had an occasion to consider whether this amended Section will be applicable with retrospective effect or not. The question formulated by the Hon'ble Supreme Court in this judgement read as under : “Whether amendment brought to Section 153C of the Income Tax Act, 1961 vide Finance Act, 2015 would be applicable to search conducted under Section 132 of the Income Tax Act, 1961 before 01.06.2015 i.e. the date of amendment ? 12.1 This question has been replied against the assessee and in favour of the Revenue by the Hon'ble Supreme Court. After lot of discussion, Hon'ble Supreme Court has propounded as under : “11. In view of the above and for the reasons stated above, the impugned common judgment and order passed by the High Court is held to be unsustainable and the question, i.e.., \"Whether the amendment brought to section 153C of the Income-tax Act, 1961 vide Finance Act, 2015 would be applicable to searches conducted under section 132 of the Act, 1961 before 1- 6-2015, i.e., the date of amendment?\", is answered in favour of the Revenue and against the assessees and is answered accordingly. Therefore, it is observed and held that the amendment brought to section 153C of the Act, 1961 vide Finance Act, 2015 shall be applicable to searches conducted under section 132 of the Act, 1961 before 1-6-2015, i.e., the date of the amendment. The impugned common judgment and order passed by the High Court, therefore, deserves to be quashed and set aside and is accordingly quashed and set aside. However, as before the High Court respective assessment orders were challenged mainly on the aforesaid issue, which is now answered in favour of the Revenue as above, we reserve the liberty in favour of the respective assessees to challenge the assessment orders before CIT (A) on any other grounds which may be available and it is observed that if said appeals are preferred within four weeks Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 12 from today, the same be considered in accordance with law and on their own merits, on any other grounds. Present appeals are accordingly allowed in terms of the above. However, in the facts and circumstances of the case, there shall be no order as to costs.” 12.2 Thus, according to this decision of the Hon'ble Supreme Court, this post amended Section 153C will be applicable in all assessment years. 13. Therefore, we are of the view that once material collected during the course of search is being used against the assessee, then assessment order ought to have been passed u/s 153C and not u/s 147 of the Act. Accordingly, we quash assessment in A.Y. 2017-18. 14. As far as the addition on merit is concerned, we find that identical situation has been considered by us and there is no disparity on the information considered by the AO in these appeals vis-à-vis we have discussed in the order passed in assessment year 853/CHD/2024. The relevant part of the order of the ITAT reads as under : “3. The brief facts of the case are that assessee has filed his return of income on 27.02.2017 declaring total income of Rs.13,45,430/-. The AO has reopened the assessment on the ground that assessee alongwith his wife had purchased Flat No. 133, Tower No. 2, 13th Floor, Homeland Heights Apartment, Sector 70, SAS Nagar, Mohali (Punjab). A search was conducted at the premises of Homeland Buildwell Pvt. Ltd. wherein two laptops of two employees were recovered. The first laptop was of one Shri Monu who Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 13 was working as a Customer Relationship Manager of M/s A.B Alcobev Pvt. Ltd. and the other laptop was of Shri Sanjiv Garg. Shri Monu was earlier working with developer from whom assessee has purchased the flats. According to the Revenue, certain pages were deleted in the laptop of Shri Monu which was retrieved by the Revenue wherein the Revenue could lay hand on certain details wherein it was noted by Shri Monu that how cost of construction of these flats have been recouped from the alleged buyers. In other words, case of the Revenue is that assessee has paid over and above the amounts stated in the Sale Deed. With the help of that evidence, the addition of Rs.30 lacs has been made in the hands of the assessee. 4. Appeal to the ld. CIT(A) did not bring any relief to the assessee. 5. This appeal was listed for hearing on 13.01.2025 and the Bench has passed the following order : “The assessee is in appeal before the Tribunal against the order of the ld. CIT(A) dated 15.06.2024 passed for assessment year 2016-17. The grounds of appeal taken by the assessee are not in consonance with Rule 8D of ITAT Rules rather they are descriptive and argumentative in nature. 2. In brief, grievance of the assessee is that ld. CIT(A) has erred in confirming the addition of Rs.30 lacs. 3. The brief facts of the case are that assessee has filed his return of income on 27.02.2017 declaring total income of Rs.13,45,430/-. The ld. AO has reopened the assessment by issuance of a notice under Section 148 on 30.03.2021. According to the AO, assessee has purchased a flat No.133 Tower No.2, 13th Floor from Homeland Heights Apartments. A search & seizure operation was conducted at the premises of the developer of this project wherein statement of one Shri Monu who was working as a Customer Relationship Manager (CRM) of M/s AB Alcobev Pvt. Ltd. was recorded. He was earlier working at the Homeland Heights, Sector 70. A laptop was seized in which it revealed that certain files were deleted by Shri Monu and later on these files were retrieved by the Department. From this laptop, according to the Revenue, certain incriminating details were recovered which exhibit that some of the flats were sold after accepting part cash as a component of sale consideration. This factum of cash is being narrated under expression ‘Discount’. The Revenue drawn an inference that assessee has also paid cash of Rs.30 lacs while purchasing the flat, hence reopened the assessment. The AO Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 14 treated the alleged information as a gospel truth and did not substantiate the information by cross verifying the details. He even did not call Monu as a witness in favour of the Revenue. He made an addition of Rs.30 lacs by alleging that assessee has made payment of this amount apart from cheque component mentioned in the Sale Deed. 4. The appeal to the ld. CIT(A) did not bring any relief to the assessee. 5. The ld. Counsel for the assessee while impugning the orders of the Revenue Authorities has emphasized that except a bald allegation in the shape of discovery of some sheet from one Monu, who was not even under employment of developer at the relevant time, was made as a basis of this addition. The Department did not supply either the statement of Monu, the alleged incriminating material to the assessee nor allowed any cross-examination of the alleged witness. The AO himself has not cross verified any of the details, he just relied on the information of the alleged Investigation Wing. 6. After hearing the matter for some time, we directed the ld. DR to produce the alleged file from Investigation Wing exhibiting what are the details possessed by the Revenue so that we could verify whether any credible material is being in possession of the Revenue or not. Apart from this, we would like to know the details of other purchasers whether any addition was made in the hands of any other assessee and if made, what is the status of those appeals. Hearing is adjourned to 18.02.2025. Copy of this ordersheet be supplied to both the parties. This appeal be treated as part heard.” 6. On the last date of hearing, nothing was brought on record by the Revenue except an Appraisal Report prepared by Investigation Wing which was transmitted to the concerned Assessing Officers. In other words, it is just an opinion of some officer who has conducted the investigation. The basic evidence or the basic document was never transmitted to the AO. 7. On due consideration of the facts and circumstances, we find that only evidence alleged to be possessed by the Revenue is some details unearthed from the computer of Shri Monu whose erstwhile employer was the developer from whom assessee has purchased the flat. We observe that the authenticity of such details in laptop of a third person will always remain doubtful without sufficient corroborative evidence. There is no direct evidence possessed by the revenue. The concerned employee has already left the job of Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 15 the developer. The AO has neither supplied the alleged copies of those documents recovered from the laptop of Shri Monu nor he has put Shri Monu for cross-examination of the assessee. It is not established on the record whether assessee has made any payment to Shri Monu. Only a chart prepared by an employee was recovered but that cannot be the evidence, solely on whose basis addition can be made. At this stage, we deem it appropriate to make reference to the judgement of Hon'ble Supreme Court in the case of Andaman Timber Industries Vs Commissioner of Central Excise 281 CTR 241 (S.C.) wherein the Hon'ble Supreme Court has propounded that if a witness was not put for cross-examination, then statement recorded against a person from his back will not be used in evidence. Para 6 of the judgement reads as under : “6. According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice' because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them.” 8. Thus the Revenue did not possess sufficient evidence in support of its case. The addition made to the total income of the assessee is not sustainable. Accordingly, we allow the appeal and delete the addition.” 15. In the light of above, if we examine the facts of the present appeals, then it would reveal that as far as assessment year 2020-21 is concerned, the assessee has cancelled the booking. If a transaction has not been materialized, then how Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 16 it can be assumed that the assessee must have made the payment in cash whose source is unexplained. Immediately after payment of booking amount, the transaction was cancelled by the assessee and he has received the money back through Account Payee Cheque. In such circumstances, we are of the view that AO has unnecessarily made hypothetical calculations. As observed in re-assessment order for A.Y. 2017-18, we are of the view that ld. CIT (Appeals) has failed to appreciate the controversy in right perspective. The observation of the CIT (Appeals) that Shri Amit Gupta and other persons have made disclosures during their statement recorded u/s 132(4) of the Income Tax Act, we are of the view that presumption of truth in an admission made u/s 132(4) could only be drawn qua the deponent. It cannot bind any third person if some material is being admitted as true by the deponent of the statement, then it will be construed as true admission qua him and his declaration cannot bind a third person. Therefore, this reference by the ld. CIT (Appeals) is contrary to the principle of law. Similarly, all information referred by the AO as well as by the CIT (Appeals) are available in the computers of third person, how their entries recorded Printed from counselvise.com ITA No.873&874/CHD/2025 A.Y.2017-18 and 2020-21 17 by them could be binding upon the assessee and could be construed as true qua the assessee. Therefore, there is nothing with the Revenue to suggest that assessee has made payment of cash for purchase of a flat in assessment year 2017-18 and for booking of an office space relevant to assessment year 2020-21. We allow both the appeals and delete the additions. 16. In the result, both the appeals are allowed. Order pronounced on 12.08.2025. Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam” आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "