AMIT SONI,BIKANER vs. ITO WARD- 1(1), BIKANER

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ITA 973/JODH/2025Status: DisposedITAT Jodhpur21 May 2026AY 2023-246 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition was unjustified as it was based on a mere presumption from an excel sheet found at a third party's premises. The AO failed to establish a direct nexus between the seized material and the assessee, and no opportunity was given to reconcile discrepancies.

What were the facts?

The assessee's appeal challenges the confirmation of an addition of Rs. 20,10,159/- under Section 69C of the Income Tax Act. This addition was based on an entry in documents found during a search at a third-party firm's premises, which the AO treated as an unrecorded purchase.

What were the issues?

Whether an addition can be made based on an unverified entry in documents found at a third party's premises without corroborating evidence and without providing an opportunity to the assessee to reconcile discrepancies?

Which sections of the Income-tax Act were involved?

Section 69C,Section 132(4A),Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

For Respondent: Smt. Ayushi Sharma, JCIT-DR

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 973/Jodh/2025 (Assessment Year 2023-24) Amit Soni Prop. Mohan Lal Narayan The Income Tax Officer, Das Jewellers Near hanuman Temple, Ward-1(1), Bikaner (Raj.) Brahampuri Chowk, Bikaner-334001 Virendra Pugalia (Advocate) Sethia Marothi Guwad Thanthera Mohalla, Bikaner (Raj) PAN No. APHPS1971G Assessee by Sh. Virendra Jain, Advocate (Physical) Revenue by Smt. Ayushi Sharma, JCIT-DR Date of Hearing 07 / 05 / 2026 Date of Pronouncement 21 / 05 / 2026 ORDER DR. MITHA LAL MEENA, A.M.: This appeal is filed by assessee against the order of National Faceless Appeal Centre, Delhi [hereinafter referred to as NFAC/CIT(A)] dated 29.10.2025 with respect to assessment year 2023-24 challenging therein confirmation of the addition of Rs. 20,10,159/- u/s 69C of the Act.

2.

At the outset, the Ld. Counsel for the assessee has submitted that the Ld. CIT(A) was not justified in confirming the addition made by the AO amounting to Rs. 20,10,159/- u/s 69C on account of an entry found in the documents found during the search u/s 132 of the Act carried out at the business premises

2 ITA No. 973/Jodh/2025 (Assessment Year-2023-24) of the third party firm (M/s Tirth Gold). The counsel argued that the said addition has been made by the AO based on dumb and unverified documents and, therefore, deserves to be quashed. The Ld. AR further submitted that the application of the special tax rates u/s 115BBE by the AO is unwarranted. The AR has further submitted that additions are made by the AO and confirmed by the Ld. CIT(A) without appreciating the facts of case and ignoring the submissions made by the appellant, where the AO had not conducted any inquiry before making the weird addition to the income of the appellant.

3.

The AR presented the facts that appellant firm declare sales of Rs. 17,59,17,348/- and then he was not required to purchase the disputed small quantum of goods value of Rs. 20,10,159/- out of books where he has availed bank credit facility of about 4 crore from Kotak Mahindra Bank, Bikaner. The AR contended that the appellant has made all the business activities in regular course of business. The AR argued that all the rough estimates/guess work never can be held sale or purchases and the AO cannot treat a rough notings on an excel sheet data entry of the third party as a sale transaction without substantiating and corroborating the transactions with material evidence. The AR further submitted that except the excel sheet entry, no incriminating document was found at the business premises of the alleged third party i.e. Tirth Gold. He has argued that even if the appellant have purchased that goods

3 ITA No. 973/Jodh/2025 (Assessment Year-2023-24) out of the books from that alleged frim then they would have surely found some entry or proof of the movement of goods or the deposit of the money against the goods but the search team or investigation officer did not found any other supported evidence or proof except that name of the appellant firm’s in that excel sheet out of more than 4000 entries. The AO has made this entry as a cardinal evidence and by his own erroneous conclusion, he made absurd addition u/s 69C of the Act, which is unjustified and bad in law. The AR contended that the AO has never given an opportunity to reconcile the discrepancies in the ITRs, GSTRs and Aug ERP software to take it observation to a logical conclusion. In support he placed reliance on the latest decision in the case of Colourful Estates Pvt. Ltd. Vs. DCIT (ITAT Delhi) ITA Nos. 2204 & 2205/Del/2023 where it is observed that presumption u/s 132(4A) is available only against the person from whose presumption the document is found and not against the third party. In the absence of clinching evidence against the third party as stated above, no action could be taken against him. He further referred to the judgment delivered by ITAT Pune in ACIT Vs. Amit D Irshid [IT Appeal No. 988 (PN) of 2011, dated 22.04.2013 and Straptex (India) (P.) Ltd. Vs. Dy. CIT[2003] 84 ITD (Mum). Thus, the AR has requested that the absurd addition made by the AO is deserves to be quashed.

4 ITA No. 973/Jodh/2025 (Assessment Year-2023-24) 4. We have heard both the sides, perused the material on record and the impugned order. Admittedly, the appellant assessee has not entered into sale or purchase transaction with the alleged third party (Tirth Gold) during the year under consideration. It is noted that the investigation authority itself while exercising party identification from physical and digital evidences collected during the search was not sure that parties name was clearly mentioned as have been identified to a considerable extent. It is also noted that the excel sheet was recovered in the course of search at the third party premises (Tirth Gold) where the AO has alleged the name of the assessee appellant was written has not been rebutted to the appellant assessee by providing opportunity to reconcile the discrepancies as observed by the AO, if any transaction recorded in the ITRs, GSTRs and Aug ERP Software in order to take the finding to a logical conclusion. It is settled law that no presumption of any transaction should be made without having a definite and clear finding passed on a documentary evidence to substantiate a direct nexus between the transaction as seized material and the assessee. In our view, presumption u/s 132(4A) would be available to the department against the person from whose possession the documents is found and seized and not against the third person, in the absence of clinching evidence against that third person. In our view, such an absence and without being substantiated or corroborated with the

5 ITA No. 973/Jodh/2025 (Assessment Year-2023-24) documentary evidences, no addition is called for in the hands of the appellant. Our view gets support from the judgment delivered by ITAT Delhi and Pune Benches (supra).

5.

In the present case, the lower authorities has failed to build up a case against assessee by substantiating the alleged purchase transaction based on the excel sheet found in the premises of third party during the course of search and by not rebutting the alleged excel digital sheet. The mere presumption of such alleged transactions cannot form basis for taking action against the assessee to make the disputed addition. In view of that matter, addition made by the AO would liable to be deleted.

6.

In the above view, we hold that the decision of Ld. CIT(A) is infirm and perverse to the facts on record and as such the addition of Rs. 20,10,159/- is deleted.

7.

In the result, the appeal of the assessee is allowed.

Order pronounced on 21/05/2026 in the open court.

Sd/- Sd/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 21/05/2026.

6 ITA No. 973/Jodh/2025 (Assessment Year-2023-24) Nimisha, Sr. PS True Copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File

BY ORDER,

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