POONAM BRIJLAL LALCHANDANI,AHMEDABAD vs. THE ACIT, CIRCLE-3(2), AHMEDABAD

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ITSSA 140/AHD/2023Status: DisposedITAT Ahmedabad25 April 2025AY 2011-127 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition made under Section 69A was not sustainable. The Tribunal noted that the reliance was placed solely on an Excel sheet, which the assessee argued was a 'dump document' and not authenticated. While the Revenue contended that the seized material was discussed and the satisfaction note was elaborate, the Tribunal found that the assessee had explained the transactions related to the purchase of two plots, providing bank statements, income tax returns, and computation of income, indicating no cash component was involved. The Tribunal observed that the AO, despite using the Excel sheet as a basis, did not inquire whether the cash payment was actually received by the assessee. Section 69A requires that money found with the assessee is not recorded in books, and no satisfactory explanation is offered. In this case, the assessee had explained the transaction, and the AO and CIT(A) had not taken a logical conclusion from the seized material. Therefore, the addition did not sustain. The appeal of the assessee was allowed.

What were the facts?

The assessee, Poonam Brijlal Lalchandani, filed her return of income for Assessment Year 2011-12. A search under Section 132 was conducted in the case of HN Safal Group on 04.09.2013. Subsequently, the assessee's case was selected for scrutiny under Section 153C, with a notice issued on 20.09.2018. After initial non-compliance, the assessee filed a revised return on 29.11.2018. The Assessing Officer (AO) noted that seized material, including an Excel sheet, belonged to the assessee and indicated a cash payment of Rs. 20,03,600/- for purchasing two plots in the Nirvana Scheme during AY 2011-12. The AO made an addition of this amount under Section 69A for unexplained money. The CIT(A)-11, Ahmedabad, confirmed this addition. The assessee appealed to the ITAT.

What were the issues?

1. Whether the addition of Rs. 20,03,600/- made under Section 69A of the Income Tax Act, 1961, for unexplained money is justified, considering the reliance solely on an Excel sheet without corroborative evidence or cross-examination. Assessee's contentions: The assessee argued that the addition should not be based on a third party's noting in an Excel sheet, as there is no proof of the assessee paying on-money. The Excel sheet is considered a 'dump document' of HN Safal Group, not authenticated by the assessee, and therefore not primary evidence. The assessee also contended that HN Safal Group's general admission before the Settlement Commission of receiving on-money did not name the assessee. The assessee claimed to have made payments by cheque and provided proof, and that the AO failed to supply crucial documents like the Panchnama of HN Safal Group or details of their statements. The assessee relied on the Tribunal's decision in Pravinbhai Patel and the Gujarat High Court's decision in Anil Kumar Gopikishan Agrawal vs. ACIT was distinguished. The assessee also stated that no cross-examination was allowed. Revenue's contentions: The Revenue argued that the AO categorically discussed the seized material and its impact on the assessee's transactions with HN Safal Group in paragraph 6.6 of the assessment order, and the satisfaction note elaborately mentioned this. Therefore, the seized documents could not be considered 'dump documents'. The Revenue also contended that cross-examination was not necessary as the assessment was based on seized material, assessee's details, and not solely on statements.

Which sections of the Income-tax Act were involved?

Section 69A,Section 132,Section 153C,Section 143(1),Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH

Before: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokar

For Appellant: Shri S.N. Divetia, A.R. &, Shri Samir Vora, A.R
For Respondent: Shri A.P. Singh, CIT-D.R

आदेश/ORDER

Per Suchitra Kamble, Judicial Member:

This appeal is filed by the Assessee against order dated 17.10.2023 passed by the CIT(A)-11, Ahmedabad for the Assessment Year 2011-12.

2.

The assessee has raised the following grounds of appeal :- “1. The learned Commissioner of Income Tax (Appeals)-11, Ahmedabad has erred in confirming the addition of Rs.20,03,600/- being addition u/s.69A of the Income Tax Act for the unexplained money. 2. In view of the facts and circumstances it is prayed that additionofRs.20,03,600/- be deleted.”

I.T(SS).A No. 140/Ahd/2023 Poonam Brijlal Lalchandani, A.Y. 2011-12 3. The return of income was filed by the assessee on 28.09.2011 declaring total income of Rs.5,63,690/- which was processed under Section 143(1) of the Income Tax Act, 1961. A search under Section 132 of the Act was conducted in the case of HN Safal Group on 04.09.2013. Intimation in the case of the assessee was received on 16.05.2017 and in view of the provisions of Section 153C of the Act, the case was selected for scrutiny assessment under Section 153C of the Act after recording satisfaction under Section 153C of the Act. Accordingly, notice under Section 153C of the Act was issued on 20.09.2018 and duly served upon the assessee. The assessee requested to provide Satisfaction Note and the same was provided. The assessee had not complied in response to notice under Section 153C of the Act and then a reminder letter was sent to the assessee and, thereafter, assessee filed the return on 29.11.2018 at Rs.5,63,690/-. Notice under Section 143(2) of the Act was issued alongwith notice under Section 142(1) of the Act. The show cause notice was issued on 15.12.2018 and the assessee submitted the letter dated 17.12.2018. After taking cognisance of the assessee’s reply, the Assessing Officer observed that the seized material/documents are that of the assessee and in fact information received from ExcelSheet belonged to the assessee only. Therefore, the Assessing Officer held that the cash money payment of amount of Rs.20,03,600/- by the assessee for purchasing of two plots in Nirvana Scheme during the A.Y. 2011-12 remained unexplained. Thus, the Assessing Officer made addition of Rs.20,03,600/- under Section 69A of the Act.

I.T(SS).A No. 140/Ahd/2023 Poonam Brijlal Lalchandani, A.Y. 2011-12

4.

Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

5.

The Ld. AR submitted that the assessee should not be assessed on the basis of some noting made by the third party in the name of the assessee as there is no proof with neither HN Safal Group nor or with the Assessing Officer that the assessee paid on-money. The Ld. AR submitted that there is no authenticity of an Excel Sheet which is considered as loose papers and such sheet cannot become primary evidence on which conclusion can be derived. The Excel Sheet is proprietary document of HN Safal and not marked or signed by the assessee as token of acceptance. Thus, the Excel Sheet is only a dump document and not authentic or reliable. The Ld. AR relied upon the order of the Tribunal in the case of Pravinbhai Patel, 45 taxmann.com 533. The Ld. AR further submitted that HN Safal Group have accepted before the Settlement Commission that they have received on-money was a general statement and nowhere the said Group mentioned assessee’s name. The assessee is not refuting Assessing Officer’s claim that HN Safal group could have taken on- money during their other dealings because assessee is not aware how their dealings are conducted. But in assessee’s case, she has only made payments by cheque and has provided Assessing Officer with all the proof. The Assessing Officer has not provided the assessee with the order passed

I.T(SS).A No. 140/Ahd/2023 Poonam Brijlal Lalchandani, A.Y. 2011-12 by the Settlement Commission and has not supplied the assessee any supporting documents/evidences that substantiates their claim that HN Safal group has stated assessee’s name for on-money given to HN Safal group. The Ld. AR further submitted that the assessee on several occasions requested the Assessing Officer to submit the Panchnama of HN Safal group which was relied upon while recording the satisfaction under Section 153C of the Act but the same was not supplied to the assessee till the completion of the assessment proceedings. The Assessing Officer has also not given the details of statements of HN Safal group whether the same was retracted or not. The Ld. AR further submitted that on going through the Excel Sheet, the assessee has observed gross incorrect data and in fact, there are mistakes and inaccurate details in the said Excel Sheet which cannot be treated as incorrect material or material belonging to or related to the assessee. The Ld. AR submitted that the decision quoted by the CIT(A) that of Anil Kumar Gopikishan Agrawal vs. ACIT (2019)106 taxmann.com 137 (Gujrat HC) is not at all relevant in assessee’s case as the assessee has demonstrated the details of the transactions with HN Safal group which was already recorded in assessee’s books and shows that there were no on-money transactions between HN Safal group and the assessee. The Ld. AR further submitted that no cross- examination was allowed to the assessee to contest the matter and simpliciter making addition in respect of on- money under Section 69A of the Act is not justifiable.

I.T(SS).A No. 140/Ahd/2023 Poonam Brijlal Lalchandani, A.Y. 2011-12 6. The Ld. DR submitted that the Assessing Officer has categorically in para no.6.6 discussed with seized material and the impact to that of assessee’s transaction with HN Safal group and the satisfaction note itself is the elaborately mentioned to that extent and, therefore, the documents seized cannot be held as dump document. The Ld. DR further submitted that there was no need of cross- examination as the assessment is not solely based on the statements of the party to that of the material seized as well as the assessee’s details presented at the time of assessment order.

7.

We have heard both the parties and perused all the materials. It is pertinent to note, it is only the excel sheet where the assessee’s name was mentioned and the Assessing Officer as well as the CIT(A) relied only on excel sheet and no corroborative evidence was taken into account as per the submissions of the ld. A.R. Thus, the seized material that of excel sheet is related/belong to the assessee cannot be treated as deemed document in the present assessee’s case. But while coming to the merits of the case, the assessee along with bank statements, income tax return and computation of income has explained transactions related to the purchase of two plots of Nirma Scheme where no cash component was involved. In fact, the Assessing Officer though has taken the excel sheet as the base of making an addition has not subsequently enquired whether the cash money payment of the amount of Rs. 20,03,600/- was actually received by the assessee or not. Simply stating

I.T(SS).A No. 140/Ahd/2023 Poonam Brijlal Lalchandani, A.Y. 2011-12 that cash money payment was made by the assessee for purchasing of two plots will not suffice the addition to be made u/s. 69A of the Income Tax Act, 1961 which categorically mentions that where the assessee’s to be found any money and such money is not recorded in the books of account, if any, maintained by him for any source of income and the assessee offers no explanation about the nature and source of acquisition of the money or not, explanation offered by him is not in the opinion of the Assessing Officer satisfactory, the money may be deemed to be the income of the assessee for such financial year. But in the present case, the assessee has explained the transaction was not categorically mentioned that the assessee made cash payment that amount through books of accounts or hank statement or from the confirmation of the other parties who would have received the said amount. Thus, the Assessing Officer as well as the CIT(A) has not taken the logical conclusion of the seized material found during the course of search. Hence, the addition does not sustain. Therefore, the appeal of the assessee is allowed.

8.

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

Order pronounced in the open court on 25-04-2025

Sd/- Sd/- (Makarand V. Mahadeokar) (Suchitra Kamble) Accountant Member Judicial Member Ahmedabad : Dated 25/04/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 6

I.T(SS).A No. 140/Ahd/2023 Poonam Brijlal Lalchandani, A.Y. 2011-12 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद

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