DEPUTY COMMISSIONER OF INCOME TAX, NUNGAMBAKKAM vs. PINNATHEVAR PALANICHAMY, MADURAI

आयकर अपीलीय अिधकरण, ‘ए’
यायपीठ, चे ई।
IN THE INCOME TAX APPELLATE TRIBUNAL
‘A’ BENCH: CHENNAI

ी एबी टी. वक
, ाियक सद एवं
एवं
एवं
एवं

ी अिमताभ शुा, लेखा सद के सम

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
िनधारणवष/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/Appellant)

(यथ/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 grievan
Ld.CIT(A) deleting the a money received by th
Madurai.
3. The brief facts ar transport business and Income Tax Act, 1961 ( on 01.12.2021 upon M entities and their Ma
Sabapathy. The AO no book was found in the Manager, Purchase Dep was seized and marked the said pocket-book, c about these noting’s, Sh pocket-book for his MD him from M/s. Swarna S of Shri Julian along wit
Sabapathy on 04.12.2
noting’s therein related from Mr. Rakesh of M/
ITA N
Mr.Pinna
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nce of the Revenue is against the addition of Rs.20 Crores, made by A he assessee for sale of immovab re that, the assessee is an individ sale of granite blocks. A search u
(hereinafter referred to as ‘the Act‘)
M/s. Saravana Stores (Textiles) a anaging Director (MD) of the G oted that, during the course of sea e possession of Mr. Antony Franci partment of M/s.Saravana Stores (T as [ANN/SK/SSSLLP/B&D/S-2]. At certain numbers were jotted down.
hri Julian stated that, he had been m
, Shri R. Sabapathy, to record the Shilipi. The AO observed that, the th pocket book was confronted to t
2021, wherein, he initially explai to the loan of Rs.25 crores which h
/s. Swarna Shilipi in December, 20

No.3015 /Chny/2024
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(AY 2021-22) athevar Palanichamy e action of the AO alleging on- ble property at ual engaged in u/s. 132 of the was conducted and its related
Group, Shri R.
arch, a pocket- is Julian [Asst.
Textiles)] which Page No. 61 of When enquired maintaining the loans taken by said statement the MD, Shri R.
ined that, the he had received
020 and, out of which, he had paid Rs
Madurai which was acq sum of Rs. 5 crores wa purchased by his sister
4. Thereafter, the AO noting’s in the pocke
Sabapathy; and the as on-money of Rs.20 Cr
Madurai. The assessee
& his sister’s son [viz question admeasuring a sale- consideration of which in its entirety wa given in sale-deed) and entire sale consideratio assessee also pointed o only Rs.2,010/- per sq whereas, the property than double the guideli value]; for which the p way of stamp duty & r
ITA N
Mr.Pinna
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.20 crs. to the assessee for purch quired for a total price of Rs.50 C as paid by him to Shri R. Saravana at Perambur for a total price of Rs.2
O confronted the assessee on 21.12
et-book as well as the stateme ssessee, categorically denied havin from Shri R. Sabapathy on sale further explained that, he along wit
., four (4) co-owners] had sold t
249 cents on 22.01.2021 to Shri R.
f Rs.49,70,04,000/- (approximately as paid by him by way of Demand d that no portion was paid in cash on formed part of their books of out that, the guideline value of the q.ft. which works out to Rs.8,76,3
was sold for Rs.19,96,000/- per c ne value [i.e. 2.28 times more tha purchaser had also incurred additio registration charges of Rs.5,46,78,

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy hase of land at rs. and further an for the land
21 Crs.
2.2021 with the nt of Shri R.
g received any of the land at th his two sons the property in . Sabapathy for y Rs.50 crores),
Drafts (details h, and that the accounts. The e property was 360/- per cent, cent viz., more n the guideline onal charges by ,440/- and that the final purchase cost
Rs.Rs.55,16,82,440/-. A question/allegation of u also brought to the not 21.03.2022 (within 3 m stated that, the noting made by him which we and that he had not pai agreed consideration of charges. The assessee
Sabapathy dated 05.12
notary public wherein property situated at Rs.55,16,82,440/- w
Rs.5,46,78,440/- and g purchased from assesse any cash consideration the registered Sale-Dee explained the reasons f on 04.12.2021, which pressure he was under right frame of mind wh
ITA N
Mr.Pinna
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for Shri R. Sabapathy worked out
According to him therefore, there co nderstatement of sale consideration ice of the AO that, later on, Shri R months of search) has retracted his g’s in the pocket book related to ere parked with Mr.Rakesh of M/s.
id any further sum to the assessee, f Rs.49.70 crores plus stamp duty submitted a second retracted state
2.2022 which was a sworn affidav he had affirmed that, he has Madurai on 22.01.2021 for a which includes registration gave the details of the said prope ee & others, and also asserted tha
(on-money) over and above what i ed. Shri R. Sabapathy in his swor for his retraction from his original s according to him, was given und rgoing during search and that, he hen his statement was recorded u/s No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy to the tune of ould not be any n. The assessee
. Sabapathy on statement and the cash sales
Swarna Shilipi, apart from the y & registration ement of Shri R vit filed before purchased the total cost of charges of erty at Madurai t he didn’t pay is mentioned in rn affidavit also tatement given der tremendous was not in the s.132(4) of the Act. The assessee acco inference should be dr statement of the MD w when it was not backed noting’s in the pocket-b
5. The AO however r to be an after-thought statement given by Sh noting’s in the pocket- reliable as the dates purchase of property a contents of the seized
Sabapathy that, he had of M/s. Swarna Shilipi a assessee as on-money these observations, the way of on-monies rece assessed the same to aggrieved by the orde before the Ld. CIT(A) w as under: -
ITA N
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rdingly submitted before the AO, t rawn against him on the basis of which was recorded on mistaken fa d by any corroborative evidence in a ook was dumb in nature.
rejected the submissions of the asse to avoid taxes. According to the A hri R. Sabapathy explaining the c
-diary seized during the search pr mentioned therein correlated wit at Madurai and therefore accordin material supported the original ver availed cash loan of Rs.25 crores fr and out of which he had paid Rs.2
y for the purchase of immovable e AO added the impugned sum of R ived by the assessee on sale of hi tax by way of long-term capita er of the AO, the assessee prefer who was pleased to delete the sam

No.3015 /Chny/2024
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(AY 2021-22) athevar Palanichamy hat no adverse such retracted act, particularly as much as the essee holding it AO, the original contents of the roceedings was th the date of ng to him, the rsion of Shri R.
rom Mr. Rakesh
0 crores to the property. With Rs.20 crores by s property and al gains. Being rred an appeal me by observing

“5. Decision:
I have perused the ass of the appellant, eviden proceedings and the ca from the assessment or as per prevalent guidel was found during the co
01.12.2021. Now comin diary seized and marke for the sake of ready re

essment order, grounds of appeal, written sub nces filed before the Assessing Officer & during ase laws relied upon. In the first place, as ev rder, the case of the appellant was taken up for ines since certain information relating to the a ourse of search in Saravana Stores Tex Group c ng to the said information, which are contents o ed as ANN/SK/SSSLLP/B&D/S-2, are copied he ference.
ntents, it can be seen that there is reference t months (not years) and there is no mention the appellant. However, the contents of the sa y as cash loans by the person (Sri R. Sabapa ries were made. Therefore, precisely no seized ence to the appellant was found in the course of ing the contents, Sri R. Sabapathy, MD of the s statement recorded u/s 132(4) on 04.12.2021 e total amount of Rs.25 crores as loan from Sri

No.3015 /Chny/2024
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(AY 2021-22) athevar Palanichamy missions g appeal videnced scrutiny assessee cases on of pocket ereunder to some.
n of any aid page thy), on material f search.
searched explained i Rakesh

Kumar and paid Rs.20
consideration of Madu
Saravanan towards purc
5.2 Now, the moot for c by Sri R.Sabapathy on 0
that he had given Rs.20
considered as seized m substantive addition ca venturing into this discu statement given under making statements whi other third persons in Sabapathy u/s 132(4), also the transactions importance can be att search and seizure oper to note that there is no the appellant, but the initially admitting that h the contents of a state without any further corroborative evidence.
5.3 At this stage, it is im on the decision of the Co. Ltd. v. State of Ker
AO in the assessment a the Apex Court held tha evidence, it cannot be was incorrect In this re contents of admission o sale details. In the stat that the properties from crores, out of which Rs statement recorded from Q.56
Please give cash loan o persons to of Rs.25 Cr
A As already
Perambur a 2020 and J for my sis
Crores out was met o paid by m
Hotels grou a considera was paid by 5.4 Going by the con assessment proceeding
ITA N
Mr.Pinna
::7 ::

0 crores in cash to the appellant towards p rai lands and balance Rs.5 crores to Sri R chase of Perambur property.
consideration is whether the statement given u/
04.12.2021 making a direct reference to the ap
0 crores in cash in respect of purchase of land material and evidentiary value can be attached, an be made in the hands of a third party ussion, it is pertinent to make a distinction betw r oath by a person about his own transacti ch will have a bearing on the income determin the case on hand, the statement made by corffains some disclosure about his income det he made with the appellant. Though cons tached to the statement recorded u/s 132(4
rations by Sri R. Sabapathy, it is also equally im seized material having direct or even tacit refe searched person had given a statement u/s he had paid cash to the appellant. It is settled ement, though given INCOME TAX DEPARTME under oath u/s 132(4), cannot be consid mportant to refer to the reliance placed by the a Apex Court in the case of Pullangode Rubber rala [1973] 91 ITR 18, which was brushed asid as not applicable to the facts of the case. In th at though admission is an extremely important said to be conclusive and the maker can show egard, the appellant had done his part in pro of Sri R. Sabapathy as not correct, by providin tement given u/s 132(4), Sri R. Sabapathy me m the appellant were purchased for an amount s.20 crores was paid in cash. Relevant portio m Sri R. Sabapathy on 04.12.2021 is as under:
e the deals of the immovable properties for wh of Rs.25 Crs. was paid by you. Please also fur whom the payments were made by you out of rores stated by me in my sworn statement, prope and Madurai were purchased by me during De anuary 2021. The property at Perambur was pu ster Smt. Selvalkumari for a consideration o of which Rs. 16 Crowes was the Registered Valu ut of my father's Rental Income and Rs.5 Cro e is cash to Shri R. Saravanan of Saravana up Similarly, the property at Madurai was purch ation of Rs.50 Crores (appear) of which Rs.30
y me in cash.
ntents of the above version, during the co s, the Assessing Officer also questioned the a No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy purchase
Rajagopal s 132(4) ppellant -
- can be , so that . Before ween the ons and nation of y Sri R.
tails and siderable
) during mportant erence to 132(4), law that EN Such ered as appellant
Produce e by the his case, piece of w that it ving the ng actual entioned of Rs.50
n of the hich this rnish the this love erties at ecember urchased of Rs.21
ue which ores was bhavan hased for 0 Crores ourse of appellant vide notice u/s 142(1
consideration at Rs.30
evidenced by the sale d the appellant, along w amount was received th
Sri R. Sabapathy made suffers with certain inf credence. However, on verification was done
Sabapathy, and basing the appellant. Even afte
Sabapathy, the same w also was brushed aside,

Now coming to from his statem dated 21.03.20
the amounts m same are parki any amount in any credence to treat the amou hands of the ap

"5. From the fac notebook was obtained by Shr entries. Based o that Shri R.Saba of Swarna Shilp payment to as property by his span of 3 month his statement c of Shri R.Sabap therefore, the s reliance could b the absence of a 5.6 As could be seen contents of the seized brought on record by t diary regarding paymen test of appeal, no differ of Rs.20 crores, purport

), dated 10.11.2022 on paying the total ac crores and on-money of Rs.20 crores/Howe deeds furnished, the total sale consideration rec with his relatives, is Rs.49,70,04,000/- and t hrough DDs. Therefore, it is clear that the depo e u/s 132(4) on 04.12.2021 is not totally cor firmities, and therefore the same cannot be g n the part of the Assessing Officer, no inde to ascertain the veracity of the contents o on such deposition alone, the AO proceeded to er obtaining the facts contrary to the version o were not considered and the retraction of Sri Sa
, quoting obvious reasons:
the facts of the case, Sn R. Sabapathy had r ment recorded on 04.12.2021 vide his retractio
22, i.e., after a period of two months; and sta mentioned in the seized material are not loans ng of funds with Sri Rakesh Kumar, he. has cash to the appellant. However, the AO had n o the retraction of Sri R. Sabapathy and proce nt of Rs.20 crores as undisclosed capital gain pellant.
ssion on the present assessment aside for t refer to the balance amount of Rs.5 crores, pur
Saravanan by Sri R. Sabapathy towards acqui ontents of the said seized diary were put to scr n the case of Rajagopal Saravanan, for the As 119/CHNY/2024 dt.10.07.2024. The observati are as under:
ct, it emerges that pursuant to search action u/
found which, inter-alia, contained notings o ri R.Sabapathy. No dates were mentioned again on the statement of Shri R.Sabapathy, Ld. AO apathy received loan of Rs.25 Crores from Shr pi out of which an amount of Rs.5 Crores was ut ssessee as on-money against purchase of im sister. However, this statement was retracted hs....... Shri R.Sabapathy has taken contrary st could not be held to be credible one...... the st pathy was modified within a short span of t ame could not be accepted as credible one. No be placed on the same to make impugned ad any other evidence on record....".
from the above, the Tribunal had not conside diary as such, in the absence of any other e the Assessing Officer. When the contents of th nt of Rs.5 crores to Sri Rajagopal could not st ent view can be taken in respect of the balance ted to have been given to the appellant.
e first place, there is no seized material hav e of the appellant or the transactions made arched party. Secondly, the case was taken

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy ccounted ever, as eived by the total osition of rect and given full ependent f Sri R.
question of Sri R.
abapathy retracted on letter ated that but the not paid not given eeded to ns in the the time rportedly isition of rutiny by sst. Year ons and /s 132, a of loans nst these
O alleged i Rakesh tilized as mpugned within a tand and tatement ime and concrete dition in ered the evidence e seized tand the e amount ving any e by the n up for scrutiny referring to the and no independent en contents mentioned the crores (precisely Rs.4
statement that out of when the appellant had actual facts of sale cons issues. Furthermore, wh form of Notarised Swor to be dealt with either
132(4) are correct or footing. However, no su simply brushed aside m towards undisclosed c factually, technically or be deleted.

e statement given by Sri R. Sabapathy u/s 132( quiry was done by the AO to verify the veracit erein, inasmuch as the total sale consideration
49.70 crores) was paid through DDs, aga
Rs.50 crores, Rs.20 crores was paid in cash.
furnished the copies of sale deeds and brought sideration, the AO had not discussed anything o hen the retraction statement of Sri R.Sabapath rn Affidavit was produced before the AO, the sa by proving the contents of earlier statement g by proving that the retraction statement is o uch exercise was done by the Assessing Officer metaphorically. Therefore, the addition of Rs.2
apital gains made by the AO cannot be s legally. Accordingly, the addition so made is dir is allowed.”
e above order of Ld. CIT(A), the nal on the following grounds:
learned Commissioner of Income Tax (App he case and in law.
d in deleting the addition made of Rs.20,00,0
nating material seized during the course of me transaction was admitted by Mr. R.Sabapath ring the course of search action.
ed in deleting the addition without conside aterial wherein the date of property purchased oans which was brought out in the assessment in not considering that documents seized in the was found during the course of search which wa ewellery are corroborating evidence, which prov ns received by Shri. R.Sabapathy during the ne of Rs.25,00,00,000 out of which 20 crores w red in not considering that the addition ma ble Supreme Court's decision in the case of Pu d Vs State of Kerala which states that the st e assessee could form the basis of assessment.
nd any other ground including amendment of ring the course of the appeal proceedings, the may be set aside and that of the Assessing O

No.3015 /Chny/2024
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(AY 2021-22) athevar Palanichamy
(4) alone ty of the of Rs.50
inst the Further, t out the on these y, in the ame had given u/s n wrong but was 0 crores ustained rected to Revenue is in peals) is 00,000/- f search hy in his ring the matched order by e form of as seized vided the financial were paid ade was llangode tatement grounds order of fficer be 7. Assailing the acti through the statement
M/s.Saravana Stores (J book was found. He sh that the said dairy wa
Director of M/s.Sarav transactions with M/s statement of Shri R. S with the contents of po
Sabapathy had also adm crores obtained by him have utilized to pay Rs
Madurai and Rs. 5 cror
Perambur. The Ld. DR had indeed acquired lan that, the dates of acq mentioned in the pocke though there was no m pocket book, but due original statement of S human probabilities, th of Rs.20 crores had be ITA N
Mr.Pinna
::10 ::

ion of the Ld. CIT(A), the Ld. DR of Mr. Antony Francis Julian, Purcha
Jewelers) from whose possession th howed us that, he had admitted in s given to him by Shri R. Sabapa vana Stores (Textiles) for record
.Swarna Shilipi. Then, taking us
Sabapathy, he pointed out that, w ocket book and statement of Shri mitted that the notings denoted the from M/s.Swarna Shilipi, which he
.20 crores to the assessee for purc res to Shri R. Sabapathy for purch argued that, it was a fact that Shr nds from these persons including th quisition of land were co-relatable et book. It was therefore the Ld. D ention of any name or nature of tra to the co-relation of dates, read
Shri R. Sabapathy, and by applyi e AO had rightly inferred that the een received by the assessee over

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy
R first took us ase Manager of he said pocket- n his statement athy, Managing ding the loan s through the hen confronted
Julian, Shri R.
e loan of Rs.25
e had stated to hase of land at hase of land at ri R. Sabapathy e assessee and e to the dates
DR’s case that, ansaction in the along with the ng the test of impugned sum and above the sale consideration of Rs hence, which had bee assessee by way of capi
8. Per contra, the Ld
Ld. CIT(A). He first inv seized pocket ID marke the impugned addition notings starts with figur may be denoting (2nd F
24, and thereafter, a and thereafter, on 10/
figure of -22 and there
Ld. AR submitted that, that no prudent person this Page. According to the contents therein did rightly discarded by t purported correlation b was not only far-fetch pointed out that, the sa but not the year and tha
ITA N
Mr.Pinna
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s.50 crores mentioned in the sale en rightly assessed to tax in the ital gains.
d. AR for the assessee supported th vited our attention to relevant Page d Annexure ANN/SK/SSSLLP/B&D/S was made by the AO. He pointed re of 25.00 and underneath it, is wr
February) and a noting of +1 and t noting of 16/3 [may be 16th Marc
/4 [may be 10th April] a noting o eafter, a noting of 22/6 [may be 2
these notings were clearly dumb could have inferred any meaning w him, this page was a dumb docum dn’t have evidentiary value and hen the Ld. CIT(A). He further expla eing stressed upon the AO as well hed but also not discernible from id notings at the most only shows d at the AO had imported the year wh

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy agreement and hands of the he order of the e No. 61 of the S-2, basis which d out that, the ritten 2/2 which then figure of - ch] +1 and -23
of +1 and then
22nd June]. The scribblings and whatsoever from ment and thus, nce, it had been ined that, the as the Ld. DR this Page. He ates & months, hile interpreting this page. He also show this Page but only few and therefore the Ld. A these dumb notings and numbers like 25 +1, submitted that, this pi relevance qua the asses
9. The Ld. AR furthe singularly based on the which he had stated t noting of Rs.20 crores p he had bought for a to statement of Shri R S statement was contrary unreliable. He showed purchased by Shri R. S crores approx.), as men was paid to the assesse not cash and that the e crores approx.) had be our notice that, the sai
ITA N
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::12 ::

wed us that, there was no mention of numbers, leave alone the name o
AR wondered as to how was the A d link it to the assessee by merely
24+1, etc. mentioned therein. Th ece of paper on a stand-alone ba ssee.
er pointed out that, the case of the e statement of R. Sabapathy dated that, these rough scribblings inte paid to the assessee for purchase of otal value of Rs.50 crores. Controv abapathy, the Ld. AR firstly subm y to the contemporaneous facts and us that, the property at Madur
Sabapathy for a value of Rs.49.70
ntioned in the later part of his answe ee and other co-owners through dem entire sale consideration of Rs.49.70
en offered to tax by them. He furt d sale consideration of Rs.49.70 cr

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy f any names on of the assessee
AO able to use relying on few he Ld. AR thus asis was of no e Revenue was 04.12.2021 in r alia included property which verting the said mitted that this d therefore was rai was indeed
0 crores (Rs.50
er, but this sum mand drafts and 0 crores (Rs.50
ther brought to rores was more than 2.28 times of the g of understatement of sa statement given by Shr crores, he had paid Rs the entire sale conside further submitted that statement on 21.03.20
affidavit dated 05.12.20
able to disprove his ret action of relying on Sh since been retracted, wa
10. The Ld.AR furthe question no.56 of his or stated that, out of the had advanced Rs.5 cro
Madurai. He submitted of Rs.5 Cr. was made in property at Perambur o
Sabapathy. The Ld. AR travelled to this Tribun the case of Shri Rajago
ITA N
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::13 ::

guideline value and therefore it was ale consideration. According to him i R. Sabapathy that, out of the total
.20 crores in cash stood negated b eration was actually paid in dema t R. Sabapathy had also later on 22 and thereafter he had also furn
022. The Ld. AR contended that, t traction and therefore according to hri R. Sabapathy’s original stateme as unjustified.
er pointed out that, in his answe riginal statement, Shri R. Sabapath sum of Rs.25 crores obtained by w ores to Shri R Saravanan for purch that, like in the case of assessee, s n the hands of Shri Rajagopal Sarav on the strength of the statement g brought to our notice that, this iden al and that, the Tribunal in their o opal Saravanan in ITA No. 119/Chn

No.3015 /Chny/2024
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(AY 2021-22) athevar Palanichamy also not a case m therefore, the l value of Rs.50
by the fact that and drafts. He n retracted his nished a sworn he AO was not o him, the AO’s ent, which had r to the same y had inter alia way of loan, he hase of land at similar addition vanan who sold iven by Shri R.
ntical issue had order passed in y/2024 deleted the impugned addition book as well as the sta
Ld. AR accordingly subm would apply with equal
Ld. CIT(A) had rightly
Rajagopal Saravanan’s
Therefore, the Ld. AR d
Ld.CIT(A).
11. We have heard bo record before us. We n conducted upon M/s S search, a pocket diary
Mr.Mr. Antony Francis J entity. When enquired a to have stated that, this Shri R. Sabapathy to re
Thereafter, the contents was confronted to Sh
04.12.2021 is noted to “Q.56
Please this cash loan of ITA N
Mr.Pinna
::14 ::

of Rs.5 Crs by holding the content atement of Shri R Sabapathy to be mitted that, the ratio laid down in th force to the assessee’s case as we relied on the said decision of the T case (supra) to delete the impu doesn’t want us to interfere with th oth the parties and perused the mat otice that, a search action u/s 132
Sarvana Stores (Textiles) and in y was found and seized from the Julian who was the Purchases Mana about the contents of the pocket dia s diary was given to him by the Man ecord his loan transactions with M/s s of the said diary, more particularl hri R. Sabapathy, who in his sta have stated as under: - give the deals of the immovable propert f Rs.25 Crs. was paid by you. Please also No.3015 /Chny/2024
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(AY 2021-22) athevar Palanichamy s of the pocket unreliable. The he said decision ell and that the Tribunal in Shri ugned addition.
he action of the terial placed on of the Act was the course of possession of ager of the said ary, he is noted naging Director,
Swarna Shilpi.
ly Page No. 61, atement dated ies for which o furnish the persons to whom
Rs.25 Crores
A As already st
Perambur and M and January 202
sister Smt. Selva
Rs. 16 Crowes w father's Rental In R. Saravanan of S
Madurai was purc which Rs.30 Crore
12. It is observed tha noting of Rs.25 crores from M/s Swarna Shilp used by him to pay con assessee for Rs.50 cro noted to have confront sum of Rs.20 crores in categorically denied th subsequent retraction fi his original statement accordingly drew infere had link with the asses capital gains of the asse
13. Now the question material found during t
ITA N
Mr.Pinna
::15 ::

m the payments were made by you out of tated by me in my sworn statement, p adurai were purchased by me during Dec
21. The property at Perambur was purch lkumari for a consideration of Rs.21 Crores was the Registered Value which was me ncome and Rs.5 Crores was paid by me is Saravanabhavan Hotels group Similarly, th chased for a consideration of Rs.50 Crores es was paid by me in cash.”
t, Shri R. Sabapathy had originally s on this Page denoted loan which h i out of which sum of Rs.20 crores sideration for the land which he acq ores. In light of the above statem ted the assessee as to whether he n cash, to which, the assessee is he same. Though the assessee iled by Shri R Sabapathy, the AO h t to be the important piece of ence that the notings on the page see and thus added the impugned essee.
n that arise for our consideration i the course of search at third party

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy f this love of properties at cember 2020
hased for my s out of which et out of my s cash to Shri e property at s (appear) of stated that, the e had obtained s was inter alia quired from the ent, the AO is e received such noted to have furnished the owever treated evidence and of pocket diary sum by way of s, whether the y premises viz.,

Page No. 61 of the pock the statement given by assessee and whether i the notings therein repr
14. In order to answe to examine the conten pocket diary ID mar premises of the third p alone basis can serve as has received Rs.20 Crs
Madurai. For examinin contents of the said p reference:
ITA N
Mr.Pinna
::16 ::

ket diary ID marked ANN/SK/SSSLL
Shri R Sabapathy could establish an it supported the case of the Assess resent on-monies of the assessee.
er the above question, we first cons nts of the notings found on Page ked ANN/SK/SSSLLP/B&D/S-2 sei arty and ascertain whether the sam s a link to the assessee and infer tha s in cash as on-money for sale of g the same, we have to first take paper, which is being extracted be No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy
LP/B&D/S-2 and ny link with the ing Officer that sider it prudent
No. 61 of the ized from the me on a stand- at the assessee his property at a look into the elow for ready

s noted to contain only rough scribb een added & subtracted with dates nst some numbers. The said page b wel) Super LLP and that there is a e top left-hand corner and that tain numbers. The page starts wit
18 with plus & minus [+ & -] alon the side, [but not identified whose re is no mention of name of the as re is no mention of any land tran

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy blings of certain s in day/month bears the stamp an abbreviation alphabet ‘R’ is th figure 25.00
ngside with the e initials]. It is ssessee on this nsaction or the locations viz Madurai o even the mention of wo contended that, the not and incomprehensible drawing adverse view.
will discuss in detail (in can infer any logical me authored/scribbled it, i transaction recorded th lack any evidentiary val be kept in mind that, t of Shri R. Sabapathy
Section 292C is that, t person. Hence, for the notings to pertain or re record some tangible notings on this Page miserably failed to do.
expected to prove a n notings found in a p particularly when there transaction on the said
ITA N
Mr.Pinna
::18 ::

or Perambur or the agreed sale co ord ‘cash’ on this Page. The assesse tings on this page at 3rd party prem and therefore, can’t be used ag
After considering the facts of this nfra), we are of the view that no eaning out of these notings unless t s able to assert with corroborative erein. Hence, the contents of this ue, particularly qua the assessee be his Page was found and seized from and therefore ordinarily the pres the contents of the Page belong to e AO to rebut this presumption a elate to the assessee, it is necessa material or corroborative evidenc with the assessee, which we fin
In absence of the same, the asses egative viz., explain the contents page from the premises of third is no mention of his name or any Page.

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy onsideration or e has therefore mises are dumb gainst him for case, which we prudent person the person who e material, the Page appear to ecause it has to m the premises umption under o the searched and infer these ary to bring on ce to link the d the AO has ssee cannot be of such dumb d party, more of his business

he AO has attempted to justify the ting the dates mentioned in the Pag s sold by the assessee. According ed and lacked any cogent ration essee, the first date shown in the p ebruary, however there is no year is 9/10 i.e. 9th October and the y elevant facts to be co-related with at Madurai was sold by the ass in January, 2021, and even the lan opl Saravanan to Shri R. Sabapathy s no co-relation found with the sale
According to us, in absence of a he contents of this Page with the s being made by the Revenue to suit
, was irrational, whimsical and unju efer to the decision of the Hon'ble S s & General Stores (P.) Ltd. ( t "it is, therefore, obvious that it is n to deduce the nature of the docu y going behind the document or t

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy e notings found e with the date to us, such an ale. As rightly page is 2/2 i.e., stated therein.
year also is not the dates, it is sessee to Shri nd at Perambur y in December,
-dates with the any tangible or assessee, the t their purpose, ustified. In this Supreme Court,
(66 ITR 692) not open to the ument from the to consider the substance of the matte rewrite the document, m
17. We observe that, original statement date contents of the above P retracted vide letter/af adverting to the veracit his original statement a first question to be a Sabapathy, irrespective value in the matters o that, a statement record in the proceedings agai from Section 132(4A) from the searched prem to be belonging to or p contents of material s presumed to be within and therefore any state the Act explaining the c on determination of his
ITA N
Mr.Pinna
::20 ::

r or to accept it in part and reject merely to suite purpose of revenue”.
, the entire case of the Revenue ed 04.12.2021 of Shri R. Sabapat
Page to the assessee, which he ha ffidavit dated 21.03.2022 & 05.12
ty of the averments made by Shri R and the tenability of his subsequent nswered is whether such stateme of his subsequent retraction, had a of the assessee or not. Ordinarily, ded u/s 132(4) of the Act can be us inst the searched person. This ratio of the Act which states that any mises and the contents therein sha ertaining to the searched person. A seized from the premises of searc the exclusive knowledge of the se ement given by a searched person contents of the seized material which total income, can be used against

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy it in part or to .
hinges on the thy to link the d subsequently
2.2022. Before
R. Sabapathy in t retraction, the ent of Shri R.
any evidentiary the law states sed as evidence onale emanates material found ll be presumed
Accordingly, the ched person is earched person n u/s 132(4) of h has a bearing him provided it being given voluntarily if in the statement reco accuses a third party principle can’t be applie substantiate his averm corroborative material.
make addition or draw based on the statemen
Act. Reason being, if statement to substant tangible material/evide person can unscrupulou will, for no fault of the statement given by a s undergoing cross-exam such third party unless or corroborative evidenc
18. In light of the statement of Shri R. Sa above. It is noted by explained in his stat
ITA N
Mr.Pinna
::21 ::

and not vitiated by duress, coercion orded u/s 132(4) of the Act, the se of any wrong doing, then the ed, unless the maker of the statem ment against the third party with In absence of the same, it would w adverse inference against a thir t given by the searched person u/s the requirement placed upon the tiate his statement against a th nce is dispensed away with, then usly, incriminate any third party at e latter. According to us therefore, searched person against any third mination should not be used as ev such statement is backed by any ta ce found in the course of search.
above, we now advert back to abapathy, which has already been e us that, Shri R. Sabapathy had tement, the several numbers,

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy n etc. However, earched person aforesaid legal ment is able to h tangible and d be unsafe to rd party solely s 132(4) of the maker of the ird party with n any searched his own sweet any un-tested party, without vidence against angible material examining the xtracted earlier not specifically additions and subtractions found note
25.00 ended with figure explanation that, the n had obtained from Mr. R averred that Rs.20 cror agreed cost price of Rs.
balance Rs. 5 crores w price of Rs.21 crores fo given by Shri R. Sabap rise to a suspicion agai statement is required t seized in the course transaction/sale-deed a money allegation, whic analysis of the contents
ANN/SK/SSSLLP/B&D/S material contained ther or tacit linkage with th bald statement given b used as reliable eviden the assessee.
ITA N
Mr.Pinna
::22 ::

ed on this Page and as to how di e 18. Rather, he is noted to have giv noting of Rs.25 crores represented
Rakesh of M/s Swarna Shilpi and the res was paid in cash to the assess
.50 crores for purchase of land at M as paid to Shri R Saravanan towar or purchase of land at Perambur.
pathy directly incriminating the asse nst the assessee, but as noted by to be supported by some corrobor e of search, which ought to at Madurai, contents of which disp ch will discuss infra. Having regard s of the Page No. 61 of the pocket d
S-2 we find that, there was no cog ein which would in any manner sug he assessee. Hence, in our conside by Shri R. Sabapathy dated 04.12.2
ce to draw any adverse inference i

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy d the figure of ven a sweeping loan which he en straightaway ee towards the Madurai and the rds agreed cost
This statement essee may give us above, such rating evidence be the sale proves the on- d to our above diary ID marked gent or reliable ggest any direct ered view, such 2021 cannot be in the hands of 19. Be that as it may, the original statement o relate with the notings him, if the sums of Rs.2
then both these figures and that the page shou were only small numbe with number ‘18’ and t the purported number represented loan taken purchase of land. It wa mention of alphabet ‘R
Shri R. Sabapathy in h assessee or Shri R Sarv noted on the top part co submitted by the Ld. AR
Shri R Sarvanan. Having by the Ld. AR in the notings found on ANN/SK/SSSLLP/B&D/S statement of Shri R. Sa reliable in as much as it ITA N
Mr.Pinna
::23 ::

, the Ld. AR has also rightly pointed of Shri R. Sabapathy doesn’t even found on the above extracted Pag
20 crores and Rs. 5 crores had bee ought to have been subtracted from uld have ended with figure of NIL o ers added or subtracted and that t hus, he argued that, it clearly didn of ‘25’, which according to Shri n, had been used up for making s further pointed out to us that, th
’ which may denote Mr. Rakesh as his statement, but there is no abbr vanan mentioned on this Page and orresponding to the noting of ‘25’, w
R, does not suggest any linkage to t g taken note of these apparent defe statement of Shri R. Sabapathy,
Page
No.
61
of document
S-2, we find merit in his plea th abapathy dated 04.12.2021 was oth t didn’t reflect the true and correct f

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy out to us that, prime facie co- e. According to en paid by him, m Rs. 25 crores or ‘0’, but there he page ended n’t suggest that R. Sabapathy payments for ough there is a s mentioned by reviation of the rather ‘SLP’ is which as rightly the assessee or ects pointed out in light of the ID marked at the original erwise also not acts.

ss his case, the Ld. AR also brough oborative contemporaneous fact to hri R Sabapathy. He particularly stre in his answer to Q No. 59 wh otal cost price of the land purcha essee was Rs.50 crores, towards rores in cash. Taking us through t been executed between Shri R. Sab ther co-owners), it was pointed out on agreed was Rs.49.70 crores, whi p duty & registration charges wen his sale consideration found mentio with the figure of Rs.50 crores menti
. We note that, the agreed sale c paid by Shri R Sabapathy through ntire sale consideration was also ac o-owners and also offered to tax. Mo reed sale consideration was more t ained by the stamp duty authorities t in the assessee’s case that, one d consideration of Rs.50 crores was e facts, if the statement of Shri R

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy ht to our notice o disprove the essed on Shri R.
herein he had sed by him at which he had the actual sale apathy and the to us, that the ich after taking nt up to Rs.55
ned in the sale ioned in Shri R.
consideration of demand drafts ccounted for by ore importantly, han 2.28 times s and therefore could not even s under-stated.
R. Sabapathy is considered at its face v either the selective port of land acquired at Mad had erroneously averre to the extent of Rs.20 c discussed in the forego human probabilities, acc
Shri R. Sabapathy ha consideration of Rs.20
Rs.50 crores (particular been found to be conte be discharged by way o
21. Moreover, we a subsequently retracted that, the noting of Rs.2
Crs from Mr.Rakesh of proceeds of undisclose
Mr.Rakesh of M/s.Swarn was out of other und
Sabapathy had also fi
ITA N
Mr.Pinna
::25 ::

alue, then there are only two possi tion wherein he stated the figure of durai was Rs.50 crores, is incorrect d a mistaken fact that, he had pai crores in cash. Overall, having rega oing, and applying the test of huma cording to us, the more plausible in d factually erred in stating that, crores in cash out of the agreed c rly since the total cost price of Rs emporaneously correct, entire of wh f demand drafts).
also note that, Shri R. Sabapa his statement on 21.03.2022 wher
25 crores actually did not represen f M/s.Swarna Shilipi, but instead d sales of Rs.25 crores which wa na Shilipi to the tune of Rs.17 Crs.
disclosed sales. We further fin iled an Affidavit dated 05.12.202

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy bilities viz., (a) total cost price t or (b) that he d consideration ard to the facts an conduct and ference is that,
, he had paid consideration of s.50 crores has hich is found to athy had also rein he clarified t loan of Rs.25
it represented as parked with ; and Rs.8 Crs.
d that,Shri R.
22 categorically retracting his statement the contents of his affid
I, R. SABAPATHY, So Lakshmanan Street, T N under:
I am the Manag having its regist
-600044. On 22-01-2021, land measuring
Uthangudi Villag
P R Palanicham
Kumar, residing
Madural through

S.No Doc. No.
Purc
1
382/2021
Rare
Prop
India
2
381/2021
Rare
Prop
India
3
379/2021
Rare
Prop
India
4
380/2031
Rosh
Rath
TO iii. Besides the above, w
Rs.5,46,78,440/- The 55,16,82,440/- iv. The entire sale cons paid any consideration sale deeds.

v. During the search p
12-2021, I was under mind. Later I came to k have paid an amount property, which were no ITA N
Mr.Pinna
::26 ::

t that he had paid Rs.20 Crs. to the avit are noted to be as under:

Affidavit n of Thiru.B. Rajarathinam, residing at No Nagar, Chennai -600017, hereby declare and a ging Director of M/s Rare 98 Properties India tered office at No. 133, G.S.T.Road, Chrompet,
, the said company and my son have purchased g 243 cents and 6 cents, respectively, situ ge, Madurai East Taluk, Madurai from K.Muruge my and his two sons, P Senthil Kumar and P g at No.379, Sarveshwarar Temple Street, Anna h 4 documents, as tabulated below:
chaser
Survey No.
Extent in cents
Co
(R e
SS erties a P. Ltd
Old No: 170/24
New
No.
170/242 (Part)
50
e
SS erties a P. Ltd
Old No: 170/2A
New
No.
170/342 (Part)
50
e
SS erties a P. Ltd
170/3 (Part)
28.5
28.5
28.5
57.5
han
Sree nam
170/3(Part)
6
TAL
249
we have incurred stamp duty and registration ch above purchases were made at a total cost sideration was paid through Demand Drafts. I h over and above what is mentioned in the re roceedings & while recording my statement on tremendous pressure and was not in a right f know that in the statement recorded I had state of Rs.20 crores in cash towards purchase of ot factually correct.

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy e assessee, and o. 10/15
affirm as Pvt. Ltd,
Chennai d vacant uated at esan, Mr.
P Suresh a Nagar, onsideration
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
harges of t of Rs.
have not egistered n 03/04- frame of ed that I
Madurai

d. DR for the Revenue has objected hed by Shri R. Sabapathy. Accordi e on two fronts. The first being th hown to be given on mistaken fac was not a bald one. Rather, the . Sabapathy had explained the c ng to his undisclosed sales and al at his original statement was given ght frame of mind. It is well settle s an extremely important piece of e conclusive where the maker can sh incorrect facts. For this, we gainfu ble Supreme Court rendered in Produce Co. Ltd. v. State of Kera t case, since the original statement ncorrect facts and the correct & tru
R Sabapathy in his retraction, the s erve that, it was the Revenue which of Shri R. Sabapathy to draw adv

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy d to the validity ing to us, such at, the original ct and also the maker of the ontents of the so justified his under pressure ed in law that, evidence, but it how that it was ully rely on the the case of ala [1973] 91
t was shown to ue version was same cannot be h was relying on verse inference against the assessee subsequently retracted the Revenue to cross-ex
We find that, though th brought on record in th little to disprove the summoning him. Rath retractions surmising it approach of the AO w countenance this argum retraction furnished by S
24. Further, as note document ID marked A as such the contents of explained by the writer be expected to expla instructions these notin statement, incriminated
Page inter alia suggest assessee, although ther assessee on this Page
ITA N
Mr.Pinna
::28 ::

and therefore if the Revenue’s from his original statement, then th xamine him and bring the correct f he subsequent retraction of Shri R.
he course of assessment, but the A same or cross examine Shri R.
her he is found to have simply t to be an after-thought. Accordin was unjustified and therefore we ment of the Revenue objecting to the Shri R Sabapathy.
ed above, the contents of the P
ANN/SK/SSSLLP/B&D/S-2 was dumb these loose notings could have only r of these notings. The assessee cl ain the same. Shri R. Sabapat ngs were purportedly made, had d the assessee by stating that, the ted that he had paid sum of Rs.20
re was no mention of the figure ‘20’
e. Later on however, in his retra

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy s witness had he onus was on facts on record.
Sabapathy was AO did precious
Sabapathy by y brushed the ng to us, such are unable to e validity of the Page No.61 of b in nature and y been possibly early could not thy, at whose in his original notings on this 0 crores to the or name of the action, Shri R.

Sabapathy stated that, pressure and wasn’t in t related to his undisclos
Swarna Shilpi. Accordin these bald notings could thus when he himself h admitted the notings a cannot be expected to already noted above, w hence was rebuttable.
25. In addition to the explanation given by somewhat corroborated the possession of the Pu maintaining records o transactions involving l the notings could have the stamp of Saravana according to him, sugg business transactions o
Shri R. Sabapathy and t
ITA N
Mr.Pinna
::29 ::

the original statement was given the his right frame of mind, and tha ed sales which proceeds, he had p ng to us, on the given facts, the d have only been known to Shri R.
had later on retracted his original as his own undisclosed sales, then further disprove his original statem was also found to be based on mis e above, the Ld. AR pointed out t the assessee in his retracted by the fact that, this pocket diary w urchases Manager who ordinarily w of business transactions and not and deal of the Managing Director related to undisclosed sales. He a a Stores (Jewel) Super LLP on th gested that, these notings may be f the said entity and not to the land the assessee.

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy by him under at these notings arked with M/s true nature of Sabapathy and statement and n the assessee ment, which as staken fact and to us that, the statement, is was found from ould have been t the personal r and therefore also referred to is Page, which relating to the d deal between

ove retracted statement of Shri R.
mities pointed out by the assessee he view that, Shri R. Sabapathy wa statement cannot be relied upon an deleted the impugned addition ma e statement.
e gainfully refer to the decision he case of CIT v. P.V. Kalyanasu ded case, search operations were c as found that the assessee had pu or Rs. 4.10 lakhs. The AO recorded e admitted that he had received c of Rs.4.10 lacs. The seller later on ain subsequently filed an affidavit
Rs. 34.85 lakhs out of which Rs.
aft and the balance in cash. The sel d offered the entire sale considerat ing Officer by relying upon the stat sclosed sale consideration of Rs.30. of the purchaser i.e. the assessee.
order of the CIT(A) deleting th

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy
Sabapathy and e in his original as an unreliable nd therefore the ade by the AO of the Hon’ble undaram (282
conducted upon rchased a land d the statement consideration of retracted from admitting that 4.10 lakhs was ler also revised ion of Rs.34.85
tement of seller
75 lacs by way
On appeal this e addition, by observing that, the sel action of admitting sale obvious effort to save h
The Tribunal noted tha did not conduct any in proving that the actu
Rs.34.85 lacs. It was fu on record which would purchase consideration.
have concurred with the “5. We heard cou about the sale
Revenue on 11-1
4.10 lakhs receiv held by him in ca cash invoking sec not done. Had th have been conc submission, the s lakhs out of the s for construction advanced to part for family expe respectively. It w seller wherein he with him in cash.
had sold the pro seller filed his in admit the cash
Subsequently he sale consideratio utilised for const claiming exempti
ITA N
Mr.Pinna
::31 ::

ler had given conflicting statement e consideration and paying tax was imself from further harassment from t, apart from the statement of the ndependent inquiry nor discharged al consideration received by the rther observed that there was no m suggest that the assessee had un
. On Revenue’s appeal, the High Co e findings of the Tribunal by observi unsel. The seller had initially given conflicti consideration he received. When confro
12-1998, the seller admitted that he had d ved through draft in the bank and the rest ash. The Revenue authorities could well hav ction 132 of the Act, but for obvious reas he cash been seized from the seller, the m cluded in favour of the Revenue. In a seller claimed on 20-11-2000 that he had sale proceeds to settle old family debts, R of house in Pullkasi Village and the ies for keeping Rs. 2 lakhs and Rs. 3 lakhs enses and educational expenses of h was also noted that the revised return was had shown approximately Rs. 2.5 lakhs be . Even after giving the retraction and adm operty for a sale consideration of Rs. 4.1
ncome-tax return on 28-1-2000, wherein on money consideration for the sale revised the income-tax return wherein he on and showing Rs. 4.80 lakhs out of t ruction of residential house property and on under section 54, the seller filed the co

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy ts and that his nothing but an m the Revenue.
e seller, the AO the burden of assessee was material brought nder-stated the ourt is noted to ng as under :- ng statement onted by the deposited Rs.
t amount was ve seized the sons this was matter would a subsequent d paid Rs. 15
Rs. 4.80 lakhs balance was s in the house is daughter, s filed by the eing available itting that he
10 lakhs, the n he did not transaction.
admitted the he above as consequently omputation of income paying R conflicting statem returns filed by h paying tax was harassment from undisclosed incom the Act, which in burden of provin the Revenue…
6. We also foun independent enqu merely relied on taken independe
Officer, the contr matter was a fata
7. In view of the the Income-tax A no substantial qu
Accordingly, the a 28. The above finding appellate authorities a Supreme Court in their
29. We find that the a case of the assessee.
originally admitted that the assessee for purcha the contents of P
ANN/SK/SSSLLP/B&D/S notings pertained to the ITA N
Mr.Pinna
::32 ::

Rs. 1,83,576 as tax, which was quite evid ments given by the seller and the conflictin him that his action of admitting sale cons nothing but an obvious effort to save the Revenue and escape from the exigibi me of the cash consideration under secti magnitude would far exceed the tax paid g actual consideration in such transaction nd that the Assessing Officer did not uiry relating to the value of the property p the statement given by the seller. If he nt enquiry by referring the matter with t roversy could have been avoided. Failing al one.
foregoing conclusions, we find no error in Appellate Tribunal and requires no interfe uestions of law arises for consideration o above tax case is dismissed. No costs.”
gs of the Hon’ble High Court as we re noted to have been affirmed b order reported in 294 ITR 49. above decision is applicable with eq
Like in the decided case, Shri R.
he had paid on-monies of Rs.20 cr ase of land, which he later on retr
Page
No.
61
of document
S-2 on stand-alone basis does not e assessee and/or that it denoted p

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy ent from the g income-tax ideration and from further lity of tax on on 158BD of d by him. The n was that of conduct any urchased. He e would have the Valuation to refer the n the order of rence. Hence of this Court.
ell as the lower by the Hon’ble ual force to the Sabapathy had rores in cash to racted. Further,
‘KM’ and ‘KMR’ firm o purchase of 95 acres of was reflected. The A consideration of land a against Rs. 2,40,40,000
therefore added the d assessee. On appeal statement of ‘KM’ recor the Assessing Officer documents. It was held cannot be considered a also held that, the wor and it only gives an ‘op
ITA N
Mr.Pinna
::33 ::

us therefore, the above judgmen e Ld. CIT(A).
ly refer to the decision of the this Tribunal at Chennai in the Dy CIT (17 SOT 5). In the decide at business premises of assesse usiness associate, ‘KM’. From the pr een the assessee and five others on n the other, was found wherein f land for a total consideration of Rs
AO however found that the ac s disclosed by the assessee was R
0/- admitted by ‘KM’ vide the uns differential sum as undisclosed i this Tribunal noted that, althou rded under section 132(4) is piece o has to establish the link with that, the statement recorded from as the conclusive evidence. Furthe rds ‘may be presumed’ appear in s ption’ to the authorities concerned t

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy t supports the e juri ictional case of M.M.
ed case, search ee and also at remises of ‘KM’, n one hand and transaction for . 2,40,40,000/- ctual purchase
Rs. 91 lakhs as igned MoU and income of the ugh the sworn of evidence but h other seized the third party er, the Tribunal section 132(4A) to presume the things. The said option authority and that the producing evidence in s each case depends on cannot automatically p are contrary to the fact that, the AO had blindly and presumed the sei addition. The Tribunal retracted his statement dispute between the as pointed out various disc were contrary to the c accordingly held that, evidence or material in as to why the origina addition made by the AO
“17. Regarding the section 132(4) is so the link with other conclusive evidence of the Act. Since th it gives option to rebuttable and it d assessee has every its claim. The enti
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however is rebuttable and it does n assessee has every right to rebu support of its claim & contentions. I the rule of evidence and the Reve resume things especially when the ts and circumstances of case. The y relied upon the original statemen zed material to be fully true whi however observed that ‘KM’ had and it was also known that there w ssessee and ‘KM’. Further, the ass crepancies in the seized material rel contemporaneous facts of the case since the AO did not bring any support of the original statement o l statement alone should prevail,
O was deleted, by holding as under e sworn statement, the sworn statement re ome piece of evidence. The Assessing Officer h r books of accounts seized. It cannot be cons e. The words "may be presumed" appear in se he words "may be presumed" are incorporated the authorities concerned to presume the thi oes not give definite authority and not a conclu y right to rebut the same by producing evidence re case depends on the rule of evidence. The No.3015 /Chny/2024
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(AY 2021-22) athevar Palanichamy not give definite t the same by t was held that nue authorities e actual things
Tribunal noted t made by ‘KM’
ile making the d subsequently was an existing essee had also lied upon which e. The Tribunal y corroborative of ‘KM’ to prove the impugned
:- ecorded under as to establish sidered as the ection 132(4A) in the section, ngs. But, it is usive one. The e in support of e assessee has every right to sh automatically pres circumstances of e truth of contents of discretion of the presumption should
(4A) is "may be pr the Evidence Act an seized, the author factor which may authorities concern facts and circumsta
18. In the present the cross-examinat among the assesse question No. 8 rec order,…
…
19. While determin
Assessing Officer sh on the basis of sus cannot take place o
Assessing Officer s should come to jud as a reasonable pe on inadequate mat the learned Depart
(supra) and Surjit
(supra) to support that it should be i these case law are cases relied on b statement and the present case, both made by a third pa
K. Madhava Reddy corroborative evide prevail.
….
22. In our opinion,
1.49 lakhs towards basis and stateme
Shilpa Homes (P.)
286/2/2003/IT(Inv from recording con
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hift the burden of proof. The revenue auth sume things. The actual things depend up each case. The presumption under section 132
f books or documents seized was rebuttable an authorities depending upon the facts, to d d be drawn or not. The expression used in th resumed" which is also the expression used in nd it was not a mandate that whenever books o rities concerned shall so presume irrespective dissuade the authorities from doing so. T ned should draw the conclusion judicially, depen ances of the case. There is no conclusive presum case, K. Madhava Reddy retracted his stateme tion. It is already a matter of fact’ that ther ee and K. Madhava Reddy as is evident from corded on 26-5-1999, appearing on p. 8 of th ning the undisclosed income in the block as hall be specific in his statement. He cannot draw picion, conjectures or surmises. Suspicion, how of matenal in support of findings of the Assessin hould act in a judicial manner proceed with jud dicial conclusion. The Assessing Officer is requir erson and not arbitrarily or capriciously. An ass terial cannot stand on its own leg. The case la tmental Representative in the case of V. Kunh
Singh Chhabra (supra) and Kutty alias Lakshm the retraction of the statement by Shri K. M gnored and original statement to be relied. I e not applicable to the facts of the case on h by the learned Departmental Representative e retracted statement were by the assessee h h the original statement and the retracted st arty i.e. K. Madhava Reddy. Further, on cross- y denied his statement and the revenue is n ence in support of the original statement to say there is no valid seized material representing s undisclosed purchase consideration. It is on nt recorded from third party, K. Madhava Re
Ltd. This cannot be acted upon. The Circul
.), dated 10-3-2003 clearly refrains the Ass nfessional statement during the course of searc

No.3015 /Chny/2024
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(AY 2021-22) athevar Palanichamy horities cannot pon facts and (4A) as to the nd it was in the ecide whether his sub-section section 114 of of accounts are e of any other
Therefore, the nding upon the mption.
nt even during re is a dispute the answer to he assessment sessment, the w his reference wsoever strong, ng Officer. The dicial spirit and ed to act fairly essment made w relied on by hambu & Sons mi Narasimhan
Madhava Ready n our opinion, hand. In these e, the original himself. In the tatement were objection also, et having any y that it should addition of Rs.
nly on surmise eddy, and M/s.
lar No. F. No.
sessing Officer ch and seizure and survey operati obtain any confessi contrary shall be should rely upon search. Here in the the purchase consid the sale considerat and unsigned agree
…
24. …Further, the lo of K. Madhava Rea can be made on corroborative mate in the form of any 6,73,610 in cash explain the loose p there is no eviden other than entered the payment of mo
K.M.R. Estates & Bu failed to establish t the acquisition of Hence, we have n maintained by the Rs. 91 lakhs and assessee.
25. The sale consid agreement dated 2
assessee is not a p the assessee is a p the books of accoun sale consideration the difference of R the assessee, in ou
1997 cannot be s material. The ass
1,15,52,148 and R we have already he there is no questio of sale considerati taken by the assess
31. We also refer to t the case of Addl. CIT v
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ions and also warns the Assessing Officer not ional statement as to the undisclosed income, a viewed adversely. It also states that the Ass the evidence and material gathered during e present case, the evidence is only agreement deration at Rs. 2.40 crores and the recorded sta ion of 22 acres at Rs. 3,62,18.000. The third pa ement cannot be acted upon.
oose papers found during the course of search a ady are a dumb form having no evidential valu the basis of noting on loose sheets in th erial. The revenue has not found any circumsta investments in cash, jewellery or others. They at the assessee’s place. The assessee is no papers found at the premises of K. Madhava R ce for the payment of money to the assessee in the books of accounts. Similarly, there is n oney towards purchase consideration by the as uilders (P.) Ltd. other than Rs. 91 lakhs. The As the payment of Rs. 2.40 crores as purchase co
22 acres of land and he has failed to prove no other alternative but to rely on the book assessee according to which the purchase con this has properly tallied with the sworn sta deration of Rs. 3.62 crores for the sale of 22 acr
25-3-1997 (Annex. ‘D’ to assessment order) party and there is a valid agreement dated 1-1- party and the payment in this agreement prope nts maintained by the assessee. Therefore, in o of Rs. 1,12,37,332 is properly disclosed by the Rs. 3,14,812 is interest for the delayed paymen ur opinion, is having merit. The valid agreeme aid that it is an afterthough since it is the essee is justified in offering the difference
Rs. 91,00,000 as undisclosed income at Rs. 24
eld that there is no purchase consideration of R on of computing the short-term capital gain on ion of Rs. 3,62,18,000. Accordingly, we allow see.”
the decision of the Hon'ble Bombay v. Miss Lata Mangeshkar [1974

No.3015 /Chny/2024
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(AY 2021-22) athevar Palanichamy to attempt to and any action sessing Officer the course of t which reflects atement shows arty statement at the premises ue. No addition he absence of antial evidence found only Rs.
ot expected to Reddy. Further, e by any party no evidence for ssessee to M/s.
ssessing Officer nsideration for the payment.
ks of accounts nsideration was tement of the res of land vide for which the -1997 to which erly tallies with ur opinion, the e assessee and nt. This plea of ent dated 1-1- part of seized between Rs.
,52,148. Since
Rs. 2,40,40,000
the difference w the grounds y High Court in ] 97 ITR 696. In the said case, the ITO firm known as Vasu Film been seized by the Inco said firm. In the diary amount was written as statement recorded fro
Films and from Mr. C.S entries were explained b the letter "B" would me cross-examine these pe the entries recorded in assessee has concealed the Tribunal, it was c evidences on which low that the assessee migh take place of proof. Th came to the conclusion even a single evidenc received money in black the Tribunal deleted th
High Court has upheld decision supports the ca
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O came across a sort of a ledger ma ms of Madras containing certain ent ome Tax authority from the premise y, some amount was written as s "B" against the name of the as m Mr. VasudevMenon, Managing p
. Kumar, Firm's Bombay manager, by them as the letter "W" would me ean "Black". The assessee given an ersons. Thereafter, the Assessing O n the diary and came to the conc d income. Accordingly, he made ad ontended on behalf of the assess wer authorities had relied, merely cre ht have accepted payments in black he Tribunal, after appreciating piec n that the evidences were not suff ce, where the assessee could be k for which she did not pass a receip e addition made by the AO. The H the view taken by the Tribunal. In ase of the assessee also.

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy aintained by the tries, which had es of the above
"W" and some ssessee. In the partner of Vasu the above said ean "white" and opportunity to Officer accepted lusion that the dditions. Before see that entire eated suspicion k but it did not ce of evidence, ficient to prove said to have pt. Accordingly,
Hon'ble Bombay n our view, this 32. In the present ca stand-alone basis are fo the assessee and there
Shri R Sabapathy’s or stating that these noti monies of Rs.20 crores for aggregate cost of Rs therefore was unreliab retracted as well. As Sabapathy was found always denied the ori countenance the finding maker against himself i when it comes to a sta requirement of corrobo present case, there w contemporaneous facts question had been trans in the original statem received in demand dra times the guideline valu of Shri R Sabapathy tha
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ase, also the entries in the seized ound to be dumb in nature, having efore it could not have been relied riginal statement incriminating the ngs inter alia denoted the cash p paid towards purchase of land from s.50 crores is found to based on mis ble; and the said statement had noted above, the retraction ma to be justifiable. Further, the asse ginal statement of Shri R Sabap g of the Ld.CIT(A) that, the admissio s an important piece of evidence ag atement against another person (3
oration is a must; and in the give as no such corroborative evidenc disproved the theory of the AO as sferred at the value of Rs.50 crores ment, but the entire consideration afts and that the sale price was m ue. On these facts therefore, the orig at he had taken loan from M/s.Swarn

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy d document on no linkage with upon. Further, e assessee by payment of on- m the assessee staken fact and later on been ade by Shri R essee had also pathy. We also on if made by a gainst him; but 3rd person), the en facts of the ce. Rather, the the property in s, as mentioned n was actually more than 2.28
ginal statement na Shilpi to pay

Rs.20 crores in cash by unbelievable and per-s
CIT(A) had rightly delet the AO.
33. Overall therefore, reason to interfere with grounds taken by the Re
34. Coming to the cro were raised in support o of our above findings d objection of the assesse is therefore dismissed.
35. In the result, app by the assessee are dism

Order pronounced (अिमताभ शुा)
(AMITABH SHUK
लेखासदय/ACCOUNTANT
चेई/Chennai,
दनांक/Dated: 29th April, 20
TLN
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y way of on-monies to the assessee se wrong. Consequently, we hold ted the impugned addition of Rs.20 c
, and for the reasons set out abo h the order of the Ld. CIT(A). Acco evenue are dismissed.
oss-objections of the assessee, it is of the order of Ld.CIT(A) and therefo dismissing the appeal of the Reven ee is found to have been rendered i eal filed by the Revenue and Cross missed.
d on the 29th day of April, 2025, in C
KLA)
MEMBER (एबी टी.
(ABY T. VA
याियकसदय/JUDICIA
025. No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy e is found to be that, the Ld.
crores made by ove, we see no ordingly, all the noted that they ore, in the light nue, the cross- infructuous and -Objection filed
Chennai.
/-
वक
)
ARKEY)
AL MEMBER

आदेश क ितिलिप अेिषत/Cop
1. अपीलाथ /Appellant
2. थ /Respondent
3. आयकरआयु/CIT, Chenn
4. िवभागीयितिनिध/DR
5. गाड फाईल/GF

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py to:
nai / Madurai / Salem / Coimbatore.

No.3015 /Chny/2024
CO No.4/Chny/2025
(AY 2021-22) athevar Palanichamy