DEPUTY COMMISSIONER OF INCOME TAX, CHENNAI vs. GOPU RAJAGOPAL, CHENNAI

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

ीएबीटी. वक
, ाियक सद एवं
एवं
एवं
एवं

ीअिमताभशुा, लेखासद केसम

BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER

आयकरअपीलसं./ITA No.1811/Chny/2024
&
Cross-Objection No.69/Chny/2024
िनधारणवष/Assessment Year: 2017-18

The DCIT,
Central Circle-2(4),
Chennai.

v.
Gopu Rajagopal,
1211, 12th Floor, Phoenix
Apartments,
Velacherry-600 042. [PAN: BBLPR 8282 G]
(अपीलाथ/Appellant)

(यथ/Respondent/Cross-
Objector)

Department by :
Mr.Nathala Ravi Babu, CIT
Assessee by :
Mr.Vijay Mehta, CA
सुनवाईक तारीख/Date of Hearing
:
05.12.2024
घोषणाक तारीख /Date of Pronouncement
:
28.02.2025

आदेश / O R D E R
PER ABY T. VARKEY, JM:

This is an appeal preferred by the Revenue& Cross-Objection preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), (hereinafter in short ‘the Ld.CIT(A)’), Chennai-
19, dated 30.04.2024 for the Assessment Year (hereinafter in short ‘AY’)
2017-18. 2. At the outset, the is a delay of ‘65’ days prevented by sufficient condonation of delay, objection and hence, w adjudicate the Cross-Ob
3. The Revenue has 1. The order of the learned of the case and in law.
2. The Ld.CIT(A) erred in income u/s.69A in respect partners of M/s.S.R.S.Min seized during the course of 2.1 The Ld.CIT(A) erred in any cogent or corroborativ was made on the basis
M/s.S.R.S.Mining and the recorded u/s.132(4) durin assessee. The seized mate
2.2 The CIT(A) failed to a that the amount received admitted Rs.3.30 Crore as AY 2017-18 in his sworn st
17 under PMGKY Scheme.
the assessee gives valida failed to appreciate this.
2.3 The Ld.CIT(A) failed to Thiru A.J. Rajesh kumar V voluntarily by the assessee the view that according t should demonstrate with material evidence at the should not be a mere asse

e Ld.Counsel for the assessee subm in filing of Cross-Objection. Since cause, the Ld.Counsel for the asses for which, the Ld.DR didn’t rais we condone the delay of ‘65’ days a bjection on merits.
raised the following legal grounds:
d Commissioner of Income Tax (Appeals) is erroneous deleting the addition of 11,50,00,000/- made as un t of cash received by the assessee outside the books ing in the property transaction as evidenced by the f search In the case of M/s.S.R.S.Mining.
n observing that the addition has been made without ve evidence on record, without appreciating that the of diary seized during the course of search in the admission made by the assessee in his sworn s ng the course of search in the residential premise erial and sworn statement u/s.132(4) corroborates eac appreciate that the assessee had not substantiated d as advance had been returned. Further the asse undisclosed income for AY 2016- 17 and 11.50 Crore tatement. The assessee offered Rs 3.30 Crore for the The admission of part of the entries in the seized m tion to the entries in the seized material and the o appreciate that the Hon'ble Madras High court in th s Dy.CIT(2022) 441 ITR 495 observed that a statem e could form the basis of assessment and if the depo to him, such statement recorded on oath, is not c h sufficient credible corroborative and cogent, c earliest point of time in terms of retraction, such rtion..
appreciate that the assessee retracted his stateme ment proceedings but his retraction is not based e failed to discharge his onus to substantiate the th reference to contents of seized documents afte

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Gopu Rajagopal itted that there e assessee was ssee prayed for se any serious and proceed to s on facts ndisclosed from the e material t bringing e addition e case of statement es of the ch other.
his claim essee had es for the AY 2016- aterial by Ld.CIT(A) he case of ent made nent is of correct he convincing retraction ent given d on any alternate er search

n relying on the decision of Apex Court in the case of been rendered in the context of criminal proceedin dard of burden of proof as compared to the Inc require only preponderance of probability.
n observing that the seized material used against the e information to facilitate drawing of Inference ag iating that the assessee himself admitted the rece ty transaction for the AYs 2016-17 & 2017-18 in t said income pertaining to the undisclosed income a er PMGKY Scheme.
n observing that the material relied upon by the AO i ee did not acknowledge the receipt of any such pay
/initial against the entries. The Ld.CIT(A) ought ing clear, unambiguous and formal records of trans done for obvious reasons.
y other ground including amendment of grounds tha of the appeal proceedings, the order of learned CIT of the Assessing Officer be restored.
s raised the following legal grou s-objection are without prejudice to each other and a s appeal:
circumstances of the case and in law, the Id. CIT(A ent order passed by the AO as bad in law and is null a circumstances of the case and in law, the Id. CIT(A ssions filed by the assessee that no incriminating mat search for the captioned assessment year.
was time barred and hence, is void ab initio.
leave to add to, amend, alter or delete the foregoing case are that, initially a search u/s ne SRS Mining Group on 08.12.20
iary was found from the possessi dy, wherein certain pencil scribblings
ANN/KGAR/MPKSSR/B&D/S-2 relatin e during FY 2016-17. In the post se

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Gopu Rajagopal
Common ngs which come tax assessee gainst the eipt of on the sworn agreed for s a dumb yment by to have saction of at may be T(Appeals) unds in Cross- assessee's
) erred in and void.
) erred in terial was g grounds
132 of the Act
016 and in the on of one key s were found in ng to payments earch enquiries, it was gathered that e
Group had booked an was being developed b had made payments consequential search ac one of the authorized s his statement was also the assessee in his Ans
Rs.14.80 crores from Sh monies towards the apa which Rs.3.30 crores w crores was received in offered to tax by way of 6. Subsequently, the income declaring total he didn’t offer any addit confronted the assess statement recorded u/s of income. The assessee informed the AO that he obtained under duress.
examined the assessee
ITA No.1811/Chny/2
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ach of the three (3) partners of t apartment in project ‘One Crest’, C y M/s Kara Property Ventures LLP aggregating to Rs.11.50 crores.
ction was conducted upon the asse signatories of M/s Kara Property Ve recorded u/s 132(4) of the Act. It swer to Q No. 17 had admitted to hri Sekar Reddy on behalf of the LLP artments booked by the three (3) p was received in earlier FY 2015-16
relevant FY 2016-17, which he is f additional income.
e assessee is noted to have filed income of Rs.68,96,750/- on 23.11
tional income. The AO is accordingly see, as to why, the disclosure s 132(4) of the Act was not admitte e vide his letter dated 28.11.2018 is e had retracted from his statement
The AO, thereafter, is noted to h e after summoning him u/s 131

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Gopu Rajagopal the SRS Mining
Chennai, which for which they
Accordingly, a essee who was entures LLP and t is noted that, o have received
P by way of on- partners, out of 6 and Rs.11.50
noted to have d his return of 1.2018 wherein y noted to have offered in his ed in the return s noted to have because it was have personally of the Act on 26.12.2018 and his sw have observed that, th had not received any m also showed that he w
Property Ventures LLP thereafter, is noted to Property Ventures LLP a that the apartments bo cancelled and that the p
It was also submitted from the monies receive
7. In light of the ab assessee’s retraction wa initially (his original sta later in collusion with p statement without any the original statement premises of M/s SRS monies of Rs.11.50 cror the Ld. CIT(A) was plea order of the Ld. CIT(A assessee is noted to ha
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worn statement was recorded. The e assessee has affirmed in his stat monies from M/s SRS Mining and it was not the authorized signatory o to receive monies on behalf of the have made enquiry u/s 133(6) and the said LLP is noted to have in oked by the partners of M/s SRS M payments received from them had that, the LLP had not received any ed through banking channel.
bove, the AO is noted to have obse as an after-thought and that when atement), it was given without any partners of M/s SRS Mining, he had valid reason. The AO, therefore, o of the assessee and the material s
Mining held that the assessee wa res which he added u/s 69A of the A ased to delete the said addition. Ag
A), the Revenue is now in appeal ave filed cross objections supportin

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Gopu Rajagopal
AO is noted to tement that he ts partners and f the M/s Kara e firm. The AO, from M/s Kara nformed the AO
Mining had been been refunded.
y monies apart erved that, the it was recorded y influence, but d retracted the on the basis of seized from the s in receipt of Act. On appeal, ggrieved by the before us. The ng the action of the Ld.CIT(A) on certa supra.
8. Assailing the actio seized material ANN/KG has been paid to the booking flats in projec
Property Ventures LLP the veracity of the said contended that, the con the assessee’s stateme admitted receiving Rs.1
the assessee had paid t and that the remaining have been received, wa of income. Supporting had rightly added the im
9. Per contra, the Ld no incriminating mater
21.12.2016 at assess assessee had received our notice that, the ass
ITA No.1811/Chny/2
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in legal grounds, which have alrea on of Ld. CIT(A), the Ld. DR has arg
GAR/MPKSSR/B&D/S-2 revealed tha assessee by the partners of M/s.S t “one Crest”, a real estate proje of which assessee was the author seized material could not be doub ntents of the seized material stood c ent recorded u/s.132(4) of the Ac
14.80 crores. He also brought to o taxes on Rs.3.30 crores under the P g sum of Rs.11.50 crores, althoug as wrongly retracted and not offere the order of AO, he thus contende mpugned sum in the hands of the as d. AR for the assessee submitted t rial found in the course of search see’s premises which would sug such huge sum of Rs.11.50 crores.
sessee was continuously interrogate

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Gopu Rajagopal ady been noted gued that, since t Rs.11.50 Crs.
SRS Mining for ct of M/s Kara rized signatory, bted. He further corroborated by ct wherein had our notice that,
PMGKY Scheme gh admitted to ed in the return ed that, the AO ssessee.
that, there was h conducted on gest that the . He brought to ed for 40 hours and at the fag-end, scribblings found in lo
Mining, which was not e being in the correct fra
Officer wanted him to showed us that, this f assessee’s answer whe
Rs.2 crore in relation to was Rs.3.3 crores, whic notice that, later on, wi his statement by filing stood by his retraction during cross examinatio that the original state reliable piece of evidenc
10. The Ld. AR furthe paper seized from M/s was contended that, the assessee on that page actually received the mo figures by the third p assessee or his signat
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he was questioned regarding th ose papers seized at the premise even actually shown to him and, th ame of mind, accepted whatever th admit, to relieve himself from t fact was evident from the questio erein the assessee was confronted o FY 2015-16 and that his admissio ch had no basis whatsoever. It was thin twelve days, the assessee had an affidavit. He submitted that, the in the original assessment proceed on by the AO on 26.12.2018. He t ement having been validly retract ce to make the impugned addition.
er showed us that, the noting’s fo
SRS Mining was stray noting’s ma ere was no acknowledgment, signa e, which would suggest that the onies. According to him, therefore s party, without any noting in hand ture etc., cannot be straightaway

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Gopu Rajagopal he contents of es of M/s SRS he assessee not he Investigation the ordeal. He on no. 17 and with noting of n in his answer brought to our retracted from e assessee had dings, and also thus contended ted was not a ound in a loose de in pencil. It ture etc. of the assessee had stray noting’s of dwriting of the y inferred that monies had exchanged fact that the project wa
LLP and that the apartm monies, if any, could b assessee. The Ld. AR c income is to be brough when the Revenue was the on-monies could no contended that, in spite
Revenue didn’t bother
Ventures LLP for almost fag end of assessment apartments never actua
AR therefore, when the on-monies didn’t arise.
deleted the impugned a 11. On the assessee’
showed that, the dec impugned issue and t declaration related to factually erroneous. Th several decisions render
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hands. He further argued that, it w as being developed by M/s Kara Pro ments were to be sold by them and be inferred only in the hands of LL contended that, it is well settled in ht to tax, in the hands of right pe aware that the appellant had not s ot have been legally added in his ha e of these facts being known to the to make any enquiries from M/s t two years and that enquiry was m t, from which it came to light th ally fructified but was rescinded. A flats were not sold, the question of . He thus urged that the Ld. CIT( ddition.
’s declaration under PMGKY Schem claration was not made with ref herefore the Ld. DR’s contention receipt of purported on-monies in he Ld. AR particularly invited ou red by this Tribunal, placed at Page

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Gopu Rajagopal was an admitted operty Ventures d therefore on-
LP and not the n law that right erson, and that sold these flats, nds. He further e Revenue, the Kara Property ade only at the hat the sale of ccording to Ld.
bringing to tax
(A) had rightly me, the Ld. AR ference to the that the said n question was ur attention to s 185 to 235 of Paper Book, in the con search in the matters of Tribunal holding these urged that the order of 12. Heard both the p receipt of on-monies of a project ‘One Crest Che real estate project, ‘One
Ventures LLP. It is note booked apartments wit inter alia made through
LLP. Accordingly, the u was being sold by M/s certain scribblings in pe the partners, Mr. Seka during the relevant yea related to payment of observed that, upon en u/s 133(6) of the Act, these three (3) partner was cancelled and the m apartments ever fructif
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ntext of noting’s found in loose pap fM/s. SRS Mining Group which were noting’s to be dumb in nature.
Ld. CIT(A) did not warrant any inter parties. The issue in dispute relates
Rs.11.50 crores in relation to sale o ennai’. The undisputed facts of the c e Crest’ was being developed by M/s ed that three (3) partners of M/s S th the said Developer for which p h banking channel to M/s Kara Pro ndisputed fact is that, the apartme s Kara Property Ventures LLP. It encil were found in a dairy mainta ar Reddy, regarding payment of R r, which according to the Investiga on-monies for the apartment in nquiry made from M/s Kara Propert the said LLP is noted to have ackn s had booked flat with them, but th monies had been refunded. Accordin ied. This fact, we note, has not be 2024 (AY 2017-18)&
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Gopu Rajagopal pers during the deleted by this He accordingly rference.
s to addition of of apartment at case are that, a s Kara Property
SRS Mining had payments were operty Ventures ent in question is noted that, ined by one of Rs.11.50 crores ting authorities question. It is ty Ventures LLP nowledged that he said booking ngly, no sale of een disputed by the AO as well. Having that the Ld. CIT(A) had on-monies lacked found ultimately sold and ther phantom transaction. W
CIT(A) on this score itse
“6.7
… In the is evident that eve advance for purcha and the advance a AO has brought on purchased by them sum of Rs.11.50 cr the undisclosed inc bring on record t materialized, the ‘phantom transactio
13. It is also noted developed by M/s Kar booking of flats were al
Property Ventures LLP.
payment was also rece banking channel. On th that, legally, any additi only been inferred in th not the assessee, wh signatories in the said
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g regard to these contemporaneous d rightly held that, the presumption dation for the reason that, no such refore one cannot infer taxation of o
We thus concur with the following elf: - e statement recorded from the partners of M/s en though the partners have admitted about th ase of flats at One Crest, the transaction was amount was returned. Neither the Authorised O n record whether the property in consideration m. However the AO in the assessment order h rores as on-money paid to the appellant and bro come of the appellant u/s 69A of the Act. It is hat when the ultimate purchase of the prop presumption of the AO that on-money pa on’ lacks foundation of making the addition.
that, the apartments in questio ra Property Ventures LLP and tha so between these three (3) partner
It is also a contemporaneous fact eived by M/s Kara Property Venture hese facts, we find merit in the Ld.
on on account of purported on-mon he hands of M/s Kara Property Ve ho was only one of the erstwh
LLP. It is noted that, the assess

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Gopu Rajagopal s facts, we find n of payment of apartment was on-monies on a findings of Ld.
SRS Mining, it he payment of not completed
Officer nor the n was actually as treated the ought to tax as s significant to perty was not id upon such on were being at the original rs and M/s Kara that the initial es LLP through
AR’s argument nies could have ntures LLP and hile authorized see also, in his original statement (alth had stated that the mo
Ventures LLP. Accordin the addition made on assessee was unjustifie observations made by t
Ch. Atchiah (218 ITR
“Under the 1961
had under the 19
the right person liable to be taxed
14. We also gainfully in the case of JCIT Vs
377). In the decided ca and several incriminati purchases & unexplain assessee who was the admitted to the afor statement, the AO adde the Ld. CIT(A) deleted brought to tax in hands have been taxed in the ITA No.1811/Chny/2
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ough retracted later on), if taken at nies were received on behalf of M/s gly, we are in agreement with the account of the on-monies in the ed. For this, we gainfully refer to the Hon’ble Supreme Court in the c
239) wherein it was held as under:
Act, the Assessing Officer has no option lik
922 Act. He can, and he must, tax the righ alone. By 'right person' is meant the pe
, according to law, with respect to a particu refer to the decision of this Tribuna s Narayana Reddy Vakati (128
ase also, search was conducted u/s ng documents were found which r ned expenditure of a company, M
Managing Director of the said com resaid undisclosed payments. R ed the same in hands of the asses the addition inter alia on the grou s of ‘wrong person’ i.e. the assessee hands of ‘right person’ i.e. M/s VN

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Gopu Rajagopal t its face value, s Kara Property e assessee that e hands of the o the following case of ITO Vs
:- ke the one he ht person and erson who is ular income.”
al at Hyderabad taxmann.com
132 of the Act revealed bogus
M/s VNRIL. The mpany and had elying on his see. On appeal nd that, it was e, and ought to NRIL. Upholding the order of the Ld. CI follows:-
“5. The Revenue v
CIT(A) ought to ha hands as per the A even an indication to the assessee h
Hon'ble apex cour
Taxman 630/218 IT he must, tax the ri meant the person particular income.
who is liable to be And that the expre expression 'right p
Director' of M/s. VN the fact is engage separately through
Saloman and Co. L company is very a 6. We conclude in t twin additions in undisclosed and u
Infrastructure Limi clear while holding the company's ass reverse the CIT(A)
15. For the above re impugned addition ma unsustainable.
16. Now we come to loose paper in third pa recorded u/s 132(4) of sheet to be pertaining
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IT(A), this Tribunal is noted to hav vehemently contended during the course of he ave affirmed both the impugned additions in Assessing Officer's stand. We make it clear tha in the Revenue's grounds that the impugned ad himself than his company M/s. VNR Infrastru rt's landmark decision in ITO v. C H Atchai
TR 239 (SC) held long back that the Assessing O ight person and the right person alone. By 'rig who is liable to be taxed according to law wit
By the connotation of 'right person', it is mea taxed, according to law, with respect to a part ssion 'wrong person' is obviously used as an an erson' only. We observe that this assessee is NR Infrastructure Limited. And that it is this latte ed in all the business activity(ies) and has b hout. There is yet another landmark decisio
Ltd. [1897] AC 22 hold long back in corporate p body corporate and a distinct entity apart from these circumstances that the CIT(A) has rightly n the assessee/individual's hands since unaccounted income pertains to its compa ted carrying out the business in its own name so that the Revenue has not even indicated t essment qua the very income(s). We thus see detailed findings for these precise reasons.”
easons therefore, we accordingly ade in the hands of the assesse
Revenue’s reliance on the scribblin arty premises and the statement o f the Act affirming the noting’s on to him. Before adverting to the c

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Gopu Rajagopal ve observed as earing that the the assessee's at there is not dditions pertain ucture Limited.
ah [1996] 84
Officer can and ht person' it is th respect to a ant the person ticular income.
ntithesis of the the 'Managing er entity which been assessed n Saloman v.
parlance that a its Director.
y deleted these corresponding any M/s. VNR e. We make it the fact above e no reason to hold that, the ee was legally ngs found on a of the assessee the said loose contents of the noting’s, which forms b keep in mind that the p contents of seized mate any other third party, w being that, if any noti premises is presumed t any person for that m paper/diary at their sw other person for no fau diary or notebook by a fasten tax liability on absence of corroborative of the Hon’ble Suprem
[1998] 3 SCC 410 an Union of India (394 I now advert to the notin of M/s SRS Mining. It is the AO that, he was on Mr. Sekar Reddy wher name against certain ca on that sheet against therefore, such stray
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basis of the impugned addition, it presumption u/s 132(4A) of the Ac erial is only against the searched pe which is the assessee in the presen ng’s found in the seized material to pertain to the assessee, at its fa matter can mention anyone’s name weet will and that can be used to ult of the latter. Accordingly, an en third person with scant details can the person whose name appears e evidence. Our view finds support me Court in the case of C.B.I. v nd Common Cause (A Registere
TR 220). Having regard to this pos g’s found in the material seized from s observed that, the assessee had ex nly shown a diary found from the p rein there were certain pencil ent ash payments, but there was no ac the amounts by the assessee. Ac notings could not be treated as 2024 (AY 2017-18)&
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“6.8 The next issue the AO seized fro
Appellant in the sub the relevant porti assessment order is "I remember
17 was put
Sekar Reddy cash payme document to 6.9It may be obse the above submiss notebook wherein c
Further in the seize that the-Appellant same submission, t
" It is on rec forty hours b at my resid indicating tha
6.10 The AO in the submission. The AO u/s 132(4) of the that the Appellant h of M/s. SRS Minin
Nungambakkam, C
6.11
In the i upon by AO was se search conducted i material was neithe found to be in the not constitute ade
Appellant, in the a ITA No.1811/Chny/2
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closed income in the hands of the knowledged this objection of the ass erted the same but rejected it as an CIT(A) had examined the said notin umb in nature, by holding as under:
e arising out of the addition is that the evidence om the third party premise lacks evidentia bmission before the AO has made a submission on of the submission as brought out by th s reproduced as under :- r that the documents with reference to which th to me was a diary found at the business pre
. It would appear that there were certain pencil nt against my name. There is no indicatio show that I had acknowledged the receipt of th erved that the AO has not made any adverse f ion of the Appellant, It is only the pencil entrie certain cash payments have been noted against ed material relied upon by the AO, there exist had acknowledged the receipt of this amount.
the Appellant had claimed the following :- cord that my residential house was searched ov by the search team. In the course of such a ma dence, absolutely no incriminating materials at I had received the amount of Rs. 11.50 Crore assessment order has not made any findings u
O in the assessment order has treated the state
Act as a sacrosanct and conclusively arrived a has received an amount of Rs. 11.50 Crores fro g for the purchase of Flat from the project "
hennai.
instant case at hand the aforesaid seized mat eized from the premises of a third-party during n the case of the said third-party (M/s SRS Mi er seized from the premises ofthe Appellant nor handwriting of the Appellant and therefore th quate evidence to draw any adverse inferenc bsence of any other corroborative evidence. T

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Gopu Rajagopal assessee. The sessee, but had n after-thought.
ng’s and rightly
- relied upon by ry value. The in this regard, he AO in the he question No.
emises of Shri.
l entries noting n in the said hose amount."
finding against s in the seized t the Appellant.
s no indication
Further in the ver a period of arathon search s were found es.”
upon the above ement recorded at a conclusion m the partners
"One Crest" at terial as relied g the course of ning) The said r was the same he same would ce against the The proposition laid down by Ho
(118,Taxmann.com ofa thirdparty alleg various parties incl said entries sinceth was it in handwritin material to link th squarely applicable any cogent materia a third-party, whic party with the Appe
6.12At this juncture
Tribunal in the (Jabalpur)-0] and t case of Riveria Pro was held that the A that the money wa was no other evide loose sheets found third-party. Also, t
UOl held as under:-
We are constrained investigation again person in the abse material on the b constitute evidence whether it would b investigation can b on the basis of unscrupulous perso account but on ran relevant and admis reliable and that to the particular third in fact involved in t may have co-relati these, the process achieve ulterior goa are lightly set in m basis of fictitious record, lest liberty decision of Hon’ble for bringing on rec entries found in loo important constitut unscrupulous pers important that the support of the ent third-party.
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n'ble Delhi High Court in the case of CIT m 432) is that when a diary is seized in search o gedly 23 containing entries ofhundi transaction uding the assessee, no addition could be made he diary was neither found from the premises o ng of assessee and revenue tallied toproduce an he assessee to the diary. The ratio of the sa e to the case of the Appellant since the AO had al to corroborate the entries made in the mater h were purportedly the transactions made by ellant.
e, it is pertinent to rely upon the decision of Jab case of ACIT vs Satyapal Wassan [TS-51
the decision rendered by the Hon'ble Mumbai T perties Pvt. Ltd. Vs ITO (ITA No,250/Mum/201
AO was required to bring further evidence on r s actually exchanged between the pailies in cas ence on record to prove that on-money was p d in the premise of third-party and admission he Hon’ble Supreme Court in the case of Comm
- d to observe that the Court has to be on guard nst any important constitutional functionary, o ence of some cogent legally cognizable mater asis of which investigation is sought is itself e and not admissible in evidence, we have be safe to even initiate investigation. In case be ordered as against any person whosoever hi irrelevant or inadmissible entry falsely m on or business house that too not kept in reg dom papers at any given point of time. There h ssible evidence and some cogent reason, which oo, supported by some other circumstances po person against whom the allegations have bee the matter or he has done some act during that ions with the random entries. In case we do no of law can be abused against all and sundry als and then no democracy can survive in case motion against important constitutional functio entries, in absence of cogent and admissibl of an individual be compromised unnecessarily.
Supreme Court stresses the need for exercisin ord relevant, reliable and cogent evidence to c ose and notebooks regarding the payments alle tional functionaries so that the process of law is sons in order to achieve ulterior goals. Th e corroborative evidence should be available tries made in the seized material found in th

2024 (AY 2017-18)&
y/2024 (AY 2017-18)
Gopu Rajagopal
Tvs. Sant Lal of the premises ns on behalf of e based on the of assessee nor ny other cogent aid decision is not referred to rial seized from the said third- balpur Bench of 104-ITAT-2007
Appellant and that could also not be payments were ma third person with Appellant, in the a to Appellant. Such which would not h therein, unless cor reliable basis for Another fact was t payment by way of If a third party payments to a pe inferred to have b evidence to establi was no reference to 6.14 When the as cannot be expected down by Hon'ble S
597) holding that t fulfilled would be o to cast an almost
Therefore, the AO any evidence to th
Mining. The burden of payments as not discharged his burd amount of Rs. 11.5
could be made un foundin the materia
17. We particularly fin of his above findings o the case of CIT v. Sant the Department relied u the premises of third p of hundi transactions on ITA No.1811/Chny/2
CO No.69/Chny
:: 16 ::

on record that the said seized material as use contain complete information to facilitate draw as absolutely no mention in the seized materia transactions of cash payments, the purpose of s entity of the recipient. In the absence of such , it could not be Inferred that the payments wer the said amounts represent the income of th e inferred with a reasonable degree of certa ade to Appellant. An entry made in a diary or scant details cannot be used to fasten tax l bsence of any corroborative evidence to attribu seized materials liable to be treated as as ‘dum have any evidentiary value in respect of the roborative evidence is available which can prov deciphering the nature and character of the that the Appellant did not acknowledge receip f appending his signature / initial against the s unilaterally makes entries in a diary/note erson to suit his convenience, the payments been made to the said person unless there is sh the actual making of payments to the said o such corroborative evidence in the assessmen ssessee denied having any transaction with d to discharge a reverse burden as per the legal
Supreme Court in the case of K.P. Varghese vs the onus of establishing that the conditions of n revenue and throwing this burden on the asse t impossible burden upon him to establish was not correct in stating that the assessee fa hat he did not have any financial transactions n was on revenue to establish that the assessee/
ted in the seized material. The AO in the presen den in proving that the Appellant was actually in 50Crores. Further, as per settled legal preceden nless there is corroborative evidence to valida al seized from a third-party.”
nd the reliance placed by the Ld. CI n the decision of the Hon’ble Delh t Lal (423 ITR 1) to be of relevanc upon the noting’s of hundi in the dia arty. The said noting’s allegedly co n behalf of parties including assesse

2024 (AY 2017-18)&
y/2024 (AY 2017-18)
Gopu Rajagopal ed against the ing of such an l regarding the such payments h essential and re made to the e Appellant. It ainty that the notebook by a iability on the ute the entries mb document’, entries found vide necessary e said entries.
pt of any such said payments.
book showing could not be s corroborative person. There t order.
the group, he l principles laid s. ITO (131 TR f taxability are essee would be the negative.
ailed to furnish with M/s SRS
/was in receipt nt case has not n receipt of the nts, no addition ate the entries
T(A) in support i High Court in ce. In this case, ary seized from ontained entries e whose names were written in abbrev relying on its earlier d
Gupta in ITA No. 814
held that no addition c basis of any diary seiz third party, since such and that the departme gather any corroborativ assessee. The Court o written anyone’s name such noting on stand-a searched person cann assessee.
18. We also gainfully
Tribunal, Ahmedabad in v. ITO (128 TTJ 36) seized material and sta evidence on record. T portion of the order of T
"Held that no evide in fact the assess containing signatu corroborate the abo course of the searc
ITA No.1811/Chny/2
CO No.69/Chny
:: 17 ::

viated/code words. The Hon'ble De decision in the case of CIT v. Ma
4 of 2015 dated 20-10-2015 is can be made in the hands of an a ed during the course of search pr diary was neither found at the asse ent had failed to provide any coge ve evidence to substantiate that it p observed that the searched perso on his own sweet will in his diary lone basis along with the biased st not be used as reliable evidenc refer to the decision of coordinate n the case of Jawaharbhai Atmara
. In this case, addition was made atement of third party without brin
The Tribunal deleted the addition
Tribunal is as under :- ence could be brought on record by the Revenu see had paid 'on money' to the developers.
ure of the assessee or handwriting of the ove making of payment by the assessee was fo ch. Merely recording made by a third party or s

2024 (AY 2017-18)&
y/2024 (AY 2017-18)
Gopu Rajagopal elhi High Court ahabir Prasad noted to have ssessee on the roceedings of a essee’s premise ent material or pertained to the on could have y and therefore tatement of the ce against the e bench of this am Hathiwala e by relying on nging any other
. The relevant e to show that No document e assessee to und during the statement of a third party could n material against th on account of 'on-m
19. According to us t third party premises c hands of the assessee, the veracity of the sam material on record to failed to do so, in the p inferred to relate to on- dispute that, the sale o receipt of on-monies w assessee recorded u/s upon by the Ld. DR, is has rightly shown that does not appear to in without any influence income of Rs.3.3 crore
Further, we also note t also withstood cross-ex the Act on 26.12.201
statement of the asses evidence, in the prese
ITA No.1811/Chny/2
CO No.69/Chny
:: 18 ::

not be treated as so sacrosanct so as to read he assessee. Therefore, addition in the hands o money' was not justified"
herefore, the stray noting’s found cannot be unilaterally used to ma and that the onus is on the Reven me with corroborative evidence by b back the same, which we find the present case. As noted above, thes
-money payments for purchase of fl of flats did not fructify and therefor was not tenable. Further, the sta
132(4) of the Act, which has been found to have been retracted by h the question put to the assessee a nspire confidence that the statem or pressure. No prudent person w s, when shown document/noting o hat, the assessee had stood by his xamination by the AO when summo
18. We therefore also note that see, having been validly retracted, ent matter. It is also noted that,

2024 (AY 2017-18)&
y/2024 (AY 2017-18)
Gopu Rajagopal d as a positive of the assessee in papers from ake addition in nue to establish bringing cogent e Revenue has se notings were lats. It is not in re, inference of atement of the n heavily relied im. The Ld. AR and his answer ent was taken would admit to of Rs. 2 crores.
s retraction and oned u/s 131 of t, the original
, is not reliable there was no incriminating material would in any manner c basis of noting’s found are in agreement with t material seized from p
‘dumb document’ and t proving that the assess undisclosed monies.
20. As far as the Re
PMGKY Scheme, we fin iota of evidence to show relation to the impugned
21. We, instead, find decision in the case of 582/Chny/2023 date facts of the present ca additions based on noti
M/s SRS Mining, which appellate order was uph
“14. So far as the CIT(A) have been e
CIT(A), upon perus that the name of th
ITA No.1811/Chny/2
CO No.69/Chny
:: 19 ::

found from the premises of the a corroborate the inference drawn by in the third party premises. Overall the Ld. CIT(A) that the stray noting remises of M/s SRS Mining was in that the AO was unable to dischar ee had indeed received Rs.11.50 cr venue’s reliance on assessee’s de nd the same to be of no relevance w that the declaration made by the a d issue.
d the reliance placed by the as DCIT Vs O Pannerselvam in IT ed 05.04.2024 to be squarely ap ase. In the decided case also, the ing’s found in papers seized from t h was deleted by Ld. CIT(A) and held by this Tribunal, by holding as u merits of quantum addition is concerned, the enumerated by us in detail in preceding parag sal of the relevant entries in the seized mate he assessee did not appear in any of the entries

2024 (AY 2017-18)&
y/2024 (AY 2017-18)
Gopu Rajagopal assessee which the AO on the l, therefore, we g’s found in the n the nature of rge his onus of rores by way of claration under as there is no assessee was in sessee on the TA Nos. 581 &
pplicable to the AO had made the premises of d the aforesaid under:- findings of Ld.
raphs. The Ld.
rial, concurred s so considered by Ld. AO to be pe merely contain an statement of Shri K the said name of 'O
Shri K. Srinivasulu the seized material popularly referred t
AO drew inference
'OPS Ramesh' rep rightly noted by Ld
Shri K. Srinivasulu shown against the anywhere in his s material to denote evidence to draw t
Ramesh' actually r was to be held that abbreviation 'OPS'
presumption was b media to refer to t having any indepen the seized materia whose name may absence of any oth
AO, it could be sai could not be accep such inference.
15. Proceeding furt been made in the found in the mater seized from the pre in the case of the s premises of the ass assessee. Therefor would not constitut the assessee as he
[2020] 118 Taxman no addition could b said decision was s has not referred to material seized fro by the said third- decision of Jabalpu
[TS-5104-ITAT-200
Mumbai Tribunal
No.250/Mum/2013) record to show tha case where there w paid except the loo made by the third-
ITA No.1811/Chny/2
CO No.69/Chny
:: 20 ::

ertaining to the assessee. All the entries so con abbreviation viz. 'OPS Ramesh'. The Ld. AO
K. Srinivasulu u/s 132(4) dated 10.12.2016 to OPS Ramesh', in the seized material, refers to explained in his statement that the name 'O l was used to denote 'PA to OPS' and since the to in the media / press and by the general publi that the payments noted in the seized material resent the payments made to the assessee.
. CIT(A), there was no mention anywhere in th that the assessee was the actual recipient of said name of 'OPS Ramesh'. Shri K.Srinivasulu statement that the acronym 'OPS' was used the assessee. Further, the seized material did n the inference that the payments noted with t represented amounts received by the assessee t the conclusion of Ld. AO was on mere presum found in the seized material refers to the ass based on the short name popularly used in the assessee. However, drawing such a presum ndent corroborative evidence that the acronym al refers only to the assessee and not to any have the same acronym, could not be sust her corroborative evidence supporting the infere id that the conclusion of Ld. AO was mere co ted to fasten huge tax liability on the assessee ther, it could also be seen that the impugned hands of the assessee merely on the basis of rial seized from a third-party premise. The said emises of a third-party during the course of sea said third-party. The said material was neither s sessee nor was the same found to be in the han re, such material, unless backed by corrobora te adequate evidence to draw any adverse infe ld by Hon'ble Delhi High Court in the case of C nn.com 432 (Del). The Hon'ble Court, in similar be made merely on the basis of such entries. T squarely applicable to the case of the assessee o any cogent material to corroborate the entrie m a third-party which are purportedly the tran party with the assessee. The other decisions ur Bench of Tribunal in the case of ACIT vs. Sa
07 (Jabalpur)-O] further supports this proposit in the case of Riveria Properties Pvt. Ltd.
) held that AO was required to bring furthe at the money was actually exchanged between was no other evidence on record to prove that ose sheets found in the premise of third-party
-party. Also, Hon'ble Supreme Court in the cas

2024 (AY 2017-18)&
y/2024 (AY 2017-18)
Gopu Rajagopal nsidered by AO relied on the o conclude that the assessee.
PS Ramesh' in e assessee was ic as 'OPS', Ld.
with the name
. However, as e statement of the payments u did not state in the seized not contain any he name 'OPS e. Therefore, it mption that the essee and this the press and mption without m 'OPS' used in y other person tained. In the ence drawn by njecture which e on account of additions have f vague entries d material was arch conducted seized from the dwriting of the ative evidence, erence against
Vs ITO (ITA er evidence on the parties in on-money was and admission se of Common
03-2017 and 23-03
K. Srinivasulu throu the retraction lette
ITA No.1811/Chny/2
CO No.69/Chny
:: 21 ::

pra) stressed the need for exercising caution an reliable and cogent evidence to corroborate the nd note books regarding the payments alleg tional functionaries so that the process of law is ons in order to achieve ulterior goals. The corroborative evidence was available on record e seized material found in the premises o se facts as well as the ratio of these judicial p ndings of Ld. CIT(A) that the seized material d on to facilitate drawing of such an adverse infe information was a vague information. In such red with a reasonable degree of certainty that erson whose name (or code name) appears th epresent the income of the said person. As righ made in a diary or notebook by a third pers be used to fasten tax liability on the person n the absence of corroborative evidence. If entries in a diary / note book showing paymen ence, the payments could not be inferred to ha unless there is corroborative evidence to estab ts to the said person.
statement of Shri K. Srinivasulu is concerned, same would not serve as corroborative evidenc ed material. That person gave a general state ncidental expenses paid to various persons. Wh nd entries in the seized material, such a gene confidence for drawing any conclusion in resp herein allegedly with the abbreviated name of t entries represent payment made to the assess he statement even to remotely suggest tha e abbreviated name actually represent paymen ement merely stated that the entries were mai partners of M/s SRS mining. It was very clea o first-hand knowledge of the payments noted merely noted whatever was told to him by th the statement would serve a very limite entity of the person who made the entries and were made on the instructions of the partn e required to explain the exact identity of the ts, the purpose of payments and the identity yments etc. However, there is no material on any of the partners was examined with rega ed material. There was no reference to any suc he assessment order. Therefore, the stateme barely be considered as corroborative evidenc ard to the entries in the seized material. Th t that the said statement was retracted vide let
3-2017 addressed to DDIT (Inv.) which was sub ugh the Jail Superintendent when he was lodged rs, it was claimed that the earlier statement wa

2024 (AY 2017-18)&
y/2024 (AY 2017-18)
Gopu Rajagopal nd for bringing e entries found gedly made to not abused by refore, it was d in support of of third-party.
precedents, we did not contain erence against a situation, it the payments herein and that htly held by Ld.
son with scant n whose name a third-party nts to a person ave been made blish the actual as rightly held ce in respect of ement that the hen there were eral statement pect of specific the assessee to ee only. There at the entries nt made to the ntained on the ar that Shri K.
d in the seized he partners. In ed purpose of nothing more.
ners, it is the recipients, the of the person n record which rd to relevant h statement of ent of Shri K.
ce against the is was further tters dated 21- bmitted by Shri d in the Jail. In as given under coercion and dures exhaustion at the continuously for mo sleep or to take re typed statement a never paid any mo
ITA No.1811/Chny/2
CO No.69/Chny
:: 22 ::

ss and in a state of mental shock, depression relevant point of time due to continuance of ore than 3 days without a break and he not be est. He further stated that he was not allowe nd his signature was obtained by force. He s ney to various persons as recorded in the type at he signed the statement to end the prolon sment and mental torture. Shri K. Srinivasulu ourse of statement u/s 131 as recorded by Ld.
ourse of assessment proceedings. This being the traction was rejected by Ld. AO without any vali r be noted that similar additions were made by milarly placed assessee by the name Shri P. Ram ght cross-examination of Shri K. Srinivasulu dur roceedings. However, Shri K. Srinivasulu ostile during the course of preliminary examinat
AO on 19.12.2018. Since the witness turned oss-examination would not serve any useful
Writ Petition before Hon'ble High Court of Mad s to the AO to permit the assessee to cross d upon by Ld. AO. The writ petition was dismis
The Hon'ble Court held that there was no in fusing the request for cross-examination sinc
Hon'ble Court further observed that if AO was K. Srinivasulu which is in favor of the revenue, e evidence to corroborate the same. Similarly f M/s SRS mining Vs UOI (141 Taxmann.com 2
statement of Shri K Srinivasulu could not be rel giving specific retraction statement and there w to cross-examine him in view of the said reaso
, it was to be held that the statement of Shri ed against the assessee unless some other me was made available on record. In the presen ny other corroborative evidences except for r
K. Srinivasulu since in the sworn statements on 08-12-2016, no questions were posed t zed material allegedly containing the details rious persons. It was thus evident that no other lable in record in respect of notings in the se ugned addition could not be sustained merely nclusions of Ld. CIT(A), in this regard, find our c ssessee could not be expected to discharge a r ples laid down by Hon'ble Supreme Court in th
(131 ITR 597) holding that onus of establis bility are fulfilled would be on revenue and essee would be to cast an almost impossible bu egative. Therefore, it was onus of Ld.AO to est ceipt of payments as noted in the seized materia d by revenue in the present case. Further, as pe

2024 (AY 2017-18)&
y/2024 (AY 2017-18)
Gopu Rajagopal n and physical search action eing allowed to ed to read the stated that he ed assessment.
nged ordeal of reiterated his
AO on 30-03- e case, it could d reasons.
revenue in the mamohan Rao.
ring the course became non- tion of the said hostile, it was purpose. That ras praying for s-examine the ssed vide order nfirmity in the ce the witness to rely on the the AO has to y, the Hon'ble
72), at para 9, ied upon as he was no need to on. Considering
K. Srinivasulu r evidence to nt case, Ld. AO relying on the of three other to them at all s of incidental r corroborative eized material.
relying on this concurrence.
reverse burden he case of K.P.
shing that the throwing this rden upon him ablish that the al. This burden er settled legal precedents, no add validate the entries
Supreme Court in t transaction as rec corroborated and p transactions. The le independent corrob books of accounts a Bangalore Tribuna
No.14/Bang/2019 d addition made in th
State of Karnataka payments found re the course of sea sustainable in the seized material. Th facts of the present
19. Considering al material was in the and unambiguous was in receipt of Ramesh'. There wa details in the seiz
Ramesh' found in t corroborative evide have actually mat between the conce alleged receipts by by Ld. CIT(A). We e
22. In view of our ab of the considered view seized material was in contain complete and conclusion that the ass was no corroborative notings, particularly w notings never materiali validly retracted his or ITA No.1811/Chny/2
CO No.69/Chny
:: 23 ::

dition could be made unless there is corroborati s found in the material seized from a third part the case of CBI vs. V.C. Shukla (AIR SC 410) h corded in the regular books needs to be proved when some liability is to be fastened in r egal principle as laid down by Hon'ble Supreme borative evidence is required in respect of ent and the same would apply in the present case. T al in the case of ACIT vs. Sri B.S.Yedi dated 07.04.2022) is on similar fact. The bench he hands of the said person who was the Chief a during the relevant period, based on the e ecorded with the initials "BSY'' in the material arch conducted in the case of a third part absence of any evidence to corroborate the he said decision, in our opinion, is squarely ap t case and favors the case of the assessee.
l these facts, the apt conclusion would be th e nature of dumb document which did not con information to arrive at such a conclusion that the payments found noted therein against th as no corroborative evidence to support and s zed material to conclusively establish that th the seized material refers to the assessee only.
ence to prove that the payments noted in the s terialized and transfer of money has actually erned parties. In view of all these reasons, t y the assessee from M/s SRS Mining has rightly endorse the view of Ld. CIT(A), in this regard.”
ove discussions, specific facts of th w that, the Ld. CIT(A) had rightly n the nature of dumb document unambiguous information to arr sessee was in receipt of on-monies evidence to support and supplem hen the purported transaction co ized. Also, as held above, the ass riginal statement and therefore the 2024 (AY 2017-18)&
y/2024 (AY 2017-18)
Gopu Rajagopal ve evidence to ty. The Hon'ble held that every independently respect of such e Court is that tries in regular
The decision of iyurappa (ITA h held that the Minister of the entries of cash seized during ty, would not notings in the pplicable to the hat the seized ntain complete t the assessee he name 'OPS upplement the he name 'OPS
. There was no seized material y taken place the addition of y been deleted is case, we are y held that the which did not rive at such a s and thatthere ment the stray ncerning these essee had also e AO’s reliance thereupon to justify the view of all these reason
Ld. CIT(A). Accordingly dismissed.
23. In view of our a assessee in the cross o infructuous, but left ope
24. In the result, bot of the assessee are dism

Order pronounced (अिमताभशुा)
(AMITABH SHUK
लेखासदय/ACCOUNTANT
चेई/Chennai,
दनांक/Dated: 28th Februar
TLN, Sr.PS
आदेशक ितिलिपअेिषत/Copy

ITA No.1811/Chny/2
CO No.69/Chny
:: 24 ::

e impugned addition is found to be ns, we see no reason to interfere w y, all the grounds raised by the R above findings, the legal grounds objections have become academic a en.
h the appeal of the Revenue and c missed.
d on the 28th day of February, 2025
KLA)
MEMBER (एबीटी.
(ABY T. VA
याियकसदय/JUDICIA ry, 2025. to:
nai / Madurai / Salem / Coimbatore.

2024 (AY 2017-18)&
y/2024 (AY 2017-18)
Gopu Rajagopal e unjustified. In ith the order of Revenue stands raised by the and is therefore cross objections
5, in Chennai.
/-
वक
)
ARKEY)
AL MEMBER