DCIT, KOLKATA vs. SUJIT ARYA, KOLKATA

Per Rajesh Kumar, AM: This is an appeal preferred by the Revenue against the order of the Commissioner of Income Tax, Kolkata 20(hereinafter referred to as the “Ld. CIT(A)”] dated 22.05.2024 for the AY 2014-15. 2. At the outset, we observe from the appeal folder that there is a delay of 190 days in filing the appeal by the department in support of which a condonation petition was filed. It was stated in the condonation petition that the delay has occurred due to obtaining the administrative approvals from the competent authorities, which took quite a long time and accordingly, the delay may be condoned being for genuine and bonafide reasons. The ld. AR, on the other hand, did not oppose the condonation of delay. Considering the reasons cited before us, we are inclined to condone the delay and admit the appeal for hearing. Sujit Arya; A.Y. 2014-15

addition of Rs. 4,41,61,742/- as undisclosed income, the AO in the Assessment Order has stated that a survey u/s 133A of the Act was conducted on the business premise of the appellant on 08.11.2013. During the course of survey various documents/papers were found and impounded from the business premise of the assessee that includes a printout depicting certain date wise transaction, allegedly taken out from the computer system of the appellant and impounded as page no. 33 in the bunch of paper marked as SA-5. Thereafter, the appellant was confronted with noting on the page no. 33 of the SA-5 in the survey and in response to the Question no. 9 of his sworn in statement, he stated that the noting on the page no. 33 of SA-5 is actually a weekly summary of net cash received for transportation of the goods from all over India and these transactions are not included in the regular books of accounts. So, he offered the amount of Rs. 4,41,61,742/- as additional income from his business. This statement was recorded on 09.11.2013. सरम However, the appellant assessee immediately after 2
days of survey i.e. on 11.11.2013 filed an affidavit before the AO, wherein he retracted from his declaration of additional income stating that the statement was taken under pressure and while making the statement he was not in the right frame of mind. In his sworn in affidavit, he expressed his total ignorance about the page 33 of SA-5. The appellant thereafter in every submission maintained the same position of retraction from the statement and in assessment proceeding he stated that the entire bunch of SA-5 belongs to the Arya Builder Pvt. Ltd. and each and all papers of SA-5 are explained in the books of Surya Mansion Pvt. Ltd. However, the AO did not accept the retraction of the appellant and made the addition of Rs. 4,41,61,742/- in the total income. a Here in appeal also, the appellant has stated that the decision of the AO in making the addition of Rs. 4,41,61,742/- as undisclosed income solely on the basis of retracted statement is not only erroneous and arbitrary but untenable in the eyes of law. The survey team has not found any other piece of evidence regarding any unaccounted transaction except that dumb sheet of paper allegedly taken out from the computer system of the appellant. This has been the stand of the appellant right from 2nd day after the survey till the passing of assessment order. The appellant hasemphasized reference to that any the said piece of paper does not mention any name, details, or stand person. This paper is in no way related to his business. It is the belong of to the him. appellant since very beginning that said page 33 of SA-5 does not which Rather as per him, the said paper is a kind of fabricated document, pressure is used for taking out the disclosure of additional income and that too under retraction and to the coercion. AO The appellant has stated that he has submitted his letter of on the very next day of survey and maintained the same stand in several subsequent communications has not come up with any and till the finalization of assessment. But AO other piece of evidence to substantiate appellant has cited its claim.Here the Karve v/s ITO the judgement of Hon'ble ITAT Pune in the case of Ajit Chintan (2009) 311 ITR
(AT)66(Pune), similar facts of the case where the Hon'ble ITAT, Pune in the was held as under - the "Assistant exercise Commissioner of Income Tax The following facts further established that made at of surrender by the Revenue Authority was under duress. No effort was papers. The the time search and seizure to verify the genuineness of these rough assessee for surrender. revenue authorities just got hold of these papers and pressed the agree with the authorities The assessee at that stage of search had no option but to the surrender was so as to escape further harassment.
In the normal course if genuine the revenue authorities should have and would have crossed should have checked verified the details and facts of amount mentioned in these pages. They at least a few entries of the accounted amount mentioned in the Sujit Arya; A.Y. 2014-15

said course paper. of assessment No such exercise was done neither during the search nor during the anything against." proceedings and the post search enquiries do not reveal INCONETSARTME an isolated There piece is merit of paper/document in the cases cited by the appellant, where it has been held that unless & does not represent the true affairs of a business of until they are supported by some corroborative evidences. The Judgement ITD Hon'ble 177 (Delhi)can ITATDelhi in the case of Bansal
Strips (p) Ltd. v. Asst. CIT (2006) 99 33 of bunch SA-5 and be aa guiding case to decide the evidentiary value of the page no. of unaccounted to examine the merit in the decision of AO in making addition Tribunal, while income solely relying on the said piece of paper. The Hon'ble making addition in elaborating assessment upon the evidentiary value of a dumb document for has held as under: - made "The on their impugned basis in seized the papers are dumb documents and no addition can be absence of corroborative materials. No circumstantial evidence in the form of unaccounted cash, jewelry or investment outside the books was nexus found in the search, (ii) the assessee from the very inception denied having any nexus with the seized papers (iii) the impugned papers did not constitute books of account, (iv) the said papers are unsigned and therefore, not sufficient to fasten the liability on the assessee, (v) the assessing officer did not carry out any enquiry by summoning the persons named in the seized papers although the assessee has furnished their addresses, (vi) some of the documents did not specify the year."
Here in the instant case also,
1. No evidence of unaccounted cash, or cash receipt, cash payment, investment outside the books etc. was found from the business premises of the appellant.
2. The assessee has denied having any nexus with the impounded paper since very beginning.
3. The impugned papers did not constitute the books of accounts.
4. The said paper is unsigned and does not mention any name, detail or any reference to any other person, forget about assessee.
5. The assessing officer did not carry out any enquiry to examine the veracity of the paper that collect any other corroborative evidence despite the fact the genuineness of the said paper was questioned some 3 years before the finalization of Assessment.
Considering the similarity of the facts and the criteria mentioned by the Hon'ble tribunal in the case (Supra), one can safely say that impugned page-33 of SA-5 is nothing but a dumb document and any addition made on the basis of a dumb document cannot sustain in the eyes of law.
Further, the Hon'ble ITAT Jabalpur in the case of ACIT v. Satyapal Wassan 295 ITR
352, while elaborating upon the evidentiary value of a dumb document in making addition of income has held as under:
"It is the duty of the assessing officer to carry out necessary investigations by correlating the impugned document with other documents seized, with regular books of account, with record kept by outside agencies, such as banks or financial institution or debtors/creditors and finally by recording the statements of concerned parties so as to Sujit Arya; A.Y. 2014-15

fill up the gaps in confirming the inference arising from the documents for a proper charge of tax. Such correlation is necessary unless the document is capable of speaking giving full details so as to enable any intelligent person to find out the nature of transaction, the year of transaction, the ownership of the transaction and quantum thereof." "The tribunal also found that the assessing officer has failed to properly decode the figures mentioned in the document as to whether they are in thousands or in ten thousand or in lakhs and what is the unit of these transactions." The tribunal held that the presumption that these figures are in lakhs is simply bald, wild and baseless. "The document should speak either out of itself or in the company of other material found on investigation and/or in the search.
The speaking from the document should be loud, clear and unambiguous in respect of all the four components as described above. If it is not so, then the document is only a dumb document."
A charge can be levied on the basis of document only when the document is a speaking one. The document should speak either out of itself or in the company of other material found on investigation and/or in the search. The document should be clear and unambiguous in respect of all the four components of the charge of tax. If it is not so, the document is only a dumb document. No charge can be levied on the basis of a dumb document.
A document found during the course of a search must be a speaking one and without any second interpretation, must reflect all the details about the transaction of the assessee in the relevant assessment year. Any gap in the various components for the charge of tax must be filled up by the Assessing Officer through investigations and correlations with other material found either during the course of the search or on investigations".
As regards to the evidentiary value of the statement recorded in survey proceedings u/s 133A of the Act, the Hon'ble Supreme Court of India in the case of Commissioner of Income Tax, Salem v. S Khader Khan 352 ITR 480 (SC) has held that statement recorded u/s 133A of the Act has no evidentiary value and any admission made during such statement cannot be made basis of addition unless and until supported by some other corroborative evidence.
There is also merit in the submission of the appellant that the survey party has not found a single piece of evidence except that disputed computer printout, on the basis of which it could be said that the appellant was indulged in doing unaccounted business at such a large scale to earn a profit of Rs. 4,41,61,742/-. It is needless to emphasize that the appellant in his books of accounts, has declared a net-profit of Rs. 84,38,656/- as against the turnover of Rs. 27.11 crore. Further, the survey team and the AO, both did not find out any defect in the books of accounts of the appellant at any stage.
There is a merit un the submission of the appellant when he states that the department has been constantly accepting his ROI in the last several years', where net profit from his business are regularly declared in the range of 1.9% to 3.1%. The details of net profit in last few years are under –
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There is also merit in the submission of the appellant when he says that if the additions of AO is accepted as correct, then in that case considering the ratio of profit generated from his business, he could have done the unaccounted business of additional turnover of Rs. 142 crores, which is beyond imagination of anybody who has a little sense of doing business in transportation line and logistics sector. For achieving the business turnover of Rs. 142 crores, one requires 5 to 6 times more working capital, fixed assets, office premises, manpower, support system, vendors, etc. But not a single piece of evidence which can be termed as unaccounted was found in the survey except that impugned dumb document, which does not speak for itself. The appellant states that in the course of survey not a scintilla of paper or document was found showing additional transportation or turnover not to speak of the huge additional turnover of Rs. 142 crores. There is also merit in the submission of appellant, when he states that to achieve a turnover of Rs. 142 crore, truck load of papers, huge freight and lorry challans, number of details and registers for dispatch and receipt of goods, number of cash vouchers for payment of advance to the truck drivers, and other huge papers including copies of the blue books of the trucks operating for transportation of such goods, the R/R numbers for transportation, the DO in the name of customers and insurance of goods during transit is required. If any goods is transported the transporter is bailed in respect of such goods and has to maintain sizeable records. Not a single paper or document was found which was not recorded in the regular books of accounts. Therefore, the very assumption of receipts of income from transportation of goods that too weekly and from all over India isfigment of mind. No such addition can be made on the basis of a paper which had no corroborative evidence. The CBDT
Circular referred to above specifically says that the AO should rely on credible evidence. The piece of paper found cannot be treated as credible evidence particularly when the same was not corroborated by any other paper or entry or books of account or document.
Sujit Arya; A.Y. 2014-15

Therefore, considering the facts and circumstances of the case vis-a-vis position of law on this issue, as pronounce by the various courts, the addition made by the AO of additional income of Rs. 4,41,61,742/- to the total income is not found correct. The reason being as under:
1. The computer Print-out impounded as page no. 33 of SA-5 is dumb document as it does not mention any details of the person to whom it belongs or details of persons with whom the transactions have been made. The law being very much clear on this subject, that the dumb documents found and impounded/seized during survey/search proceedings cannot be used as evidence for making addition in income unless or until it is supported by some other corroborative evidence. Courts have held time and again that a charge can be levied on the basis of a document only when the document is speaking one. The document should speak either out of itself or in the company of other material found on investigation and/or in search. The documents should be clear and unambiguous. If it is not so, the document is only a dumb document.
No charge can be levied on the basis of a dumb document.
2. Although in the statement recorded in the survey proceeding on 09.11.2013, while replying to question no. 9, the appellant has stated that print out represented his unaccounted weekly cash collection from his business from all over India and the same is not part of his regular books of accounts. But immediately within 2 days of survey he filed an affidavit to the AO on 11.11.2013, retracting from his statement recorded on 09.11.2013, stating that the same was taken under pressure and coercion.
3. Further, after submission of the affidavit dated 11.11.2013, the appellant has consistently maintained it stand of denying the legality & fairness of statement recorded on 09.11.2013 and denied genuineness of the transaction recorded on the page no. 33 of SA-5 in each and every communication made with the AO till the time of passing of Assessment Order.
4. Despite the fact that the appellant assessee has retracted the statement given on 09.11.2013 and denied the transaction recorded on page no. 33 of SA-
5 within 2 days of survey. The AO did not act to bring out further facts in the matter. So that the retraction of the appellant can be challenged. The AO appears to have sitting idle on the appellant on the letter of retraction from the period 11.11.2013 to 26.12.2016 (till the date of passing the assessment order) and finally made addition of Rs. 4,41,61,742/- only on the basis of a computer print-out denied more than 3 years ago.
5. There is no evidence found in the survey which suggests, the appellant is indulged in unaccounted transaction/business on a massive scale and earning
5-6 times more income than the income shown in the regular books of accounts.
6. The AO has made addition on the basis of dumb documents, which does not mention name or any details of any person. Even it does not state that it is a weekly cash collection. No name, no details, no signature, only dates and amounts are mentioned.
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instructions revenue officers that during the course of search/survey operations no attempt should be made to obtain confession as to disclose income and the ld. AO should rely upon the evidences/
material gathered during the course of survey and search operations.
Considering these facts and the ratio laid down in the above decision as relied upon by the ld. CIT (A), we are upholding the order of ld.
CIT (A) on this issue by dismissing the ground no.1 and 2 of Revenue’s appeal.
4. The issue raised in ground no.3, is against the deletion of addition of ₹13,89,500/- as made by the ld. AO u/s 40A(3)of the Act.
4.1. The facts in brief are that during the course of survey some documents were impounded which were relating to the assessee’s partnership firms namely; heritage transport organization and M/s heritage infrastructure and some business-related documents of the assessee. The ld. AO found that the assessee has made some cash payments in violation of provisions e of section 40A(3) of the Act as the payments were above 20,000/- each in case of M/s Heritage
Infrastructure and ₹35,000/- in case of M/s Heritage transport organization. Finally, the ld. AO disallowed the said amount and added the same to the income of the assessee.
4.2. In the appellate proceedings, the ld. CIT (A) deleted the addition to the tune of ₹21,48,856/- and partly sustained the addition to the extent of ₹13,89,500/- by observing and holding as under:-
“The appellant has raised ground no. 6 of his appeal against the disallowance of expenditure under the provision of section 40A (3) of this act of Rs. 35,38,356. The AO in its assessment order has stated that during the course of survey, it was found from the debit vouchers impounded in SA-5, HTO(CITRD)03, and HTO(CITRD)04, that appellant has made payment exceeding Rs. 35,00,000/- on several occasions to different parties. These payments were made for the two partnership concerns 'of the appellant namely Heritage Infrastructure (SA-5) of Rs. 2,81,156/- and heritage
Sujit Arya; A.Y. 2014-15

transport organization HTO(CIT RD)03, of Rs. 12,25,300/- and HTO (CIT RD)-04 of Rs.
20,31,900/-. The AO in the assessment found assessee's explanation unsatisfactory and hence disallowed the amount of Rs. 35,38,356/- u/s 40A (3) of theact. (The details of this addition are in para 4 on page 4 to 7of assessment order).
Submission of the Appellant on this ground.
"Ground No.6 related to the disallowance u/s 40A(3)."
The AO has disallowed the payment in respect of Heritage infrastructures of Rs.
2,81,156/- and Rs. 20,31,900/- and Rs. 12,25,300/- in respect of Heritage transport organization .it is submitted that the A.O. has made the addition simply looking into the papers impounded in the course of survey and has ignored the bills and vouchers and the books of accounts wherein the entries were recorded with full details. In the course of survey, the assessee was asked to file the explanation. The assessee submitted that the majority of the payments were made by account payee cheques, copy of bank statement is attached which shows the payments made to parties through banking channels, and only few payments made by cash because the assessee had to pay advance in cash to lorry drivers who carries goods since they require cash money on the way for purchase of fuel, repairing and other emergencies. Such advance paid to lorry drivers is maintained in the lorry challan itself. It was also explained that each of such payments was less than Rs.35,000/- the details of such payments made to heritage transport organization in respect of Rs. 20,31,900/- is enclosed herewith. It is apparent that out of the aforesaid sum Rs. 15,96,500/- was paid by account payee's cheques and only 4,35,400/- was paid bycash. Out of the said
4,35,400/- only a sum of Rs. 64,500/-. Rs. 55,000/- and Rs. 45,000/- was paid in cash which exceeded Rs. 35,000/- allowed in the case of lorry payments. Therefore, even out of Rs. 4,35,400/- only Rs. 1,64,500/- falls in the disallowable clause of 43A. As stated above such payment was also made for business necessity and cannot be disallowed u/s. 40A(3). A copy of tax audit report is also furnished herewith.
As regards the payment of Rs. 2,81,156/- is concerned Rs. 30,000/- and Rs.
50,000/- was never claimed as expenses and therefore the provisions of section 40A(3) were not applicable. The remaining sum of Rs.34,042/- was below Rs. 35,000/-
. As such the provisions of section 40A(3) is not applicable. As regards Rs. 12,25,000/- it is submitted that we hire tankers the freight of which run into 2 to 3 lakhs per trip.
When the tankers leave with goods, the drivers require advance for expense during journey. We have to pay such advance which is business necessity and is compulsion.
The final payment is made by account payee cheque. Therefore, the gene unity of payment cannot be disputed. The tankers numbers have been given. The owners do not have more than one tanker. In view of the above the addition may be deleted"
4.3. We have perused the material on record as well as the appellate order and found that the ld. CIT (A) has recorded a very detailed finding on this issue by analyzing the expenses and recording a finding that some of the expenses were paid by an account payee cheque. Therefore, we do not find any infirmity in the order of ld. CIT
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(A) and accordingly the same is upheld by dismissing the ground no.
3 of the revenue appeal.
5. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 31.12.2025. (PRADIP KUMAR CHOUBEY)
(RAJESH KUMAR)
(JUDICIAL MEMBER)
(ACCOUNTANT MEMBER)

Kolkata, Dated:31.12.2025
Sudip Sarkar, Sr.PS
Copy of the Order forwarded to:

BY ORDER,//

Sr. Private Secretary/ Asst.