DEPUTY COMMISSIONER OF INCOME TAX, HUBBALLI vs. SHRI KRISHNA MOHAN KALBURGI, HUBBALLI

ITA 1137/BANG/2024Status: DisposedITAT Bangalore13 August 2025AY 2019-2051 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 11.60 Crores on account of alleged cash loans to the Mishra Group was not sustainable. The primary reasoning was the absence of the assessee's signature or authentication on the seized documents from Shri Giridhar Laddha's premises. The Tribunal noted that the assessee had consistently denied providing cash loans of Rs. 11.60 Crores, although he admitted to providing Rs. 5 Crores in cash. The Tribunal found it significant that no evidence of such cash investments was found during the search of the assessee's own premises. Furthermore, the Tribunal considered the fact that the assessee had obtained a bank loan for his investment through banking channels, questioning why he would then make unaccounted cash investments without security. The retraction of Shri Giridhar Laddha's statement was also a crucial factor. The Tribunal relied on the principle that additions cannot be made in the hands of a third party solely based on entries in seized material without further corroborative evidence. The addition made by the Assessing Officer was deleted.

What were the facts?

The Revenue is in appeal against the CIT(A)'s order for Assessment Years 2018-19 and 2019-20. The assessee, an individual and partner in several firms, filed his return declaring a total income of Rs. 35,33,480/- for AY 2018-19. A search under Section 132 of the Income Tax Act was conducted on the assessee's premises on January 17, 2019, and on the premises of Shri Giridhar Laddha, Manager Accounts and Finance in the Mishra Group, on the same date. Incriminating documents were seized, suggesting unaccounted cash investments by the assessee in the Mishra Group. A notice under Section 153A was issued, and the assessee filed a revised return declaring Rs. 36,06,140/-. During the search, unexplained cash of Rs. 47,61,740/- was found, out of which Rs. 36,60,000/- was seized. The assessee admitted additional income of Rs. 91,66,000/- for AY 2018-19, relating to on-money received on sale of property. The dispute centers on cash loans allegedly given by the assessee to the Mishra Group.

What were the issues?

1. Whether the Tribunal had to decide if the addition of Rs. 11.60 Crores on account of alleged cash loans to the Mishra Group, based on seized documents from Shri Giridhar Laddha's premises, is sustainable in the absence of the assessee's signature or authentication on these documents and without corroborative evidence. The assessee argued that the seized materials lacked his signature and authentication, and the assessment was based on illogical satisfaction. He contended that the onus was on Shri Giridhar Laddha to explain the contents, and his mere statement was insufficient. The assessee also argued that no evidence was found at his premises, and he would not make such investments without security. He further relied on Shri Giridhar Laddha's retraction of his statement and cited ITAT Amritsar and Supreme Court decisions. The Revenue's contentions are not explicitly detailed in the provided text, but the appeal itself suggests disagreement with the CIT(A)'s deletion of the addition.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 143(1),Section 143(2),Section 10(2A)

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Income Tax Appellate Tribunal, A BENCH : BANGALORE

Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K

For Appellant: Shri. Sheshadri Chalapati, AR
For Respondent: Shri. Shivanad Kalakeri, CIT(DR)(ITAT), Bangalore
Hearing: 09.07.2025Pronounced: 13.08.2025

Per Laxmi Prasad Sahu, Accountant Member :

Both the appeals are filed by the Revenue against the Order passed by the CIT(A) vide DIN &Order Nos: ITBA/APL/M/250/2023-24/1063499939(1) and ITBA/APL/M/250/2023-24/1063501025(1), both Orders dated 27.03.2024. Since both the appeals were heard together, we are passing common Order.

Assessment Year 2018-19

2.

Briefly stated the facts of the case are that assessee is an individual. He is a partner is various partnership firms viz., M/s. Kalburgi Shelter, M/s. Ome Sweets and Foods, M/s. Kalburgi Enterprises and M/s. Kalburgi Group. During the year, assessee derived income from house pro

The order continues below.

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