Loading judgment…
Facts
A search and seizure operation was conducted, leading to proceedings under Section 153C based on cloned images from a mobile phone. The Assessing Officer (AO) determined the purchase consideration of a plot based on these images, leading to additions.
Held
The tribunal held that additions based solely on extrapolated 'mobile data' or 'WhatsApp' messages without corroborating evidence are unsustainable. Statements from sellers and co-owners confirming no 'on money' payment and registered sale deeds were considered relevant.
Key Issues
Whether additions based on extrapolated digital data and 'WhatsApp' messages without corroborating evidence are valid, and whether statements from sellers and co-owners confirming no 'on money' are relevant.
Sections Cited
132, 153C, 115BBE
AI-generated summary — verify with the full judgment below
Order PER KRINWANT SAHAY, A.M.: Both the above appeals are filed by the Assessee against the respective orders of the Ld. CIT(A)-5, Ludhiana each dt 18/10/2023 pertaining to Assessment Years 2017-18 & 2018-19 respectively.
Since the issues involved in both the above appeals are identical and, as such, for the sake of brevity, they are taken together.
3. In for the A.Y. 2017-18, the assessee has raised following grounds:
"1. That the Ld. CIT (A) has erred in confirming the part addition of Rs.78,12,500/-on account of alleged undisclosed investment in the plot jointly purchased by her with her father, Sh. Manjeet Singh.
2. That the confirmation of part addition by the Ld.CIT(A) on the basis of 'What Sapp' Messages, is against the factual facts and circumstances of the case as laid down in various judgments of different Benches of the ITAT/High Courts that no addition could be made on the basis of 'What Sapp' messages only as the same has no evidencery value.
2 3. Notwithstanding the above said ground of appeal
, the Ld.CIT(A) has failed to appreciate that the statement of the sellers of the land had been recorded during the benami proceedings, initiated against the assessee and the sellers have confirmed that the plot was sold by them as per amount mentioned in the title deed executed and, as such, that documentary evidence have wrongly been ignored by the Ld. CIT(A). That the Ld. CIT(A) has failed to appreciate the fact that the What
4. Sapp message is not incriminating material found during the course of search and, as such, on the basis of judgment of Hon'ble 'Apex Court' in the case of Abhisar Buildwell Pvt. Ltd., no addition is called in the absence of any incriminating evidence. 5. a). That the Ld. CIT(A) has erred in giving the benefit of Rs. 30 lacs of the income as declared in the return of income as per para 5.2.11 of the order, against the declared income of Rs. 40,10,000/- available with the assesse. b).That the said benefit of Rs. 10 lacs has been denied on surmises and conjectures.
6. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off."
4. In for the A.Y. 2018-19, the assessee has raised following grounds:
"1. That the Ld. CIT (A) has erred in confirming the part addition of Rs. 25,16,034/-on account of alleged undisclosed investment in the plot jointly purchased with her father, Sh. Manjeet Singh That the confirmation of part addition by the Ld.CIT(A) on the 2. basis of 'What Sapp' Messages, is against the factual facts and circumstances of the case and against the principles as laid down in various judgments of different Benches of the ITAT/High Courts that no addition could be made on the basis of 'What Sapp' messages only, as the same has no evidencery value.
Notwithstanding, the above said ground of appeal
, the Ld.CIT(A) has failed to appreciate that the statement of the sellers of the land had been recorded during the benami proceedings, initiated against the assessee and the sellers have confirmed that the plot was sold by them as per amount mentioned in the tile deed executed and, as such, that documentary evidence have wrongly been ignored by the Ld. CIT(A). That the Ld. CIT(A) has erred in restricting the addition of cash 4. found during the course of search to the tune of Rs.3 lacs against the addition of cash of Rs. 4,10,000/- found during the course of search and has failed to appreciate that the said amount was negligible, by taking into consideration the size of family and the amount found during the course of search.
5. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off."
5. Briefly the facts of the case are that A search and seizure operation under Section 132 was conducted at the residential premises of Sh. Surinder Singh Bindra in B.R.S. Nagar, Ludhiana, on 01.11.2017, and the proceedings under Section 153C were initiated against the assessee for two years based on certain cloned images found in a mobile phone. These images were reproduced on pages 3, 4, and 5 of the assessment order. During the post-search investigation, a statement from Sh. Surinder Singh Bindra was recorded on 11.12.2017, in which, the said images were confronted to Sh. Surinder Singh Bindra to which, he replied that the said Mobile belongs to his wife, Smt. Harvinder Kaur. He further stated that the said Mobile was gifted to her by her parents on the occasion of their marriage anniversary in 2017 5.1 Further, as it is seen from the assessment order that though Sh. Surinder Singh Bindra filed written submissions that these are rough jottings and the hand writing does not appear to his or his family members still then the AO determined the purchase consideration of the land in question on the basis of cloned images, which was in the name of assessee and her father, Sh. Manjeet Singh. By extrapolating the figures noted in the images of Mobile, purchase consideration to the tune of Rs. 2,28,57,080/- was determined by the AO and after excluding the disclosed consideration of Rs. 11 lacs each by the assessee and her father,. Sh. Manjeet Singh, totaling to Rs. 22 lacs the undisclosed consideration to the tune of Rs. 2,06,57,068/- towards the purchase of plot by the assessee and Sh. Manjeet Singh. It was further stated by the AO that since the payments were made partly in financial year 2016-17 and partly in Asstt. Year 2017-18. He made the addition of Rs. 1,56,25,000/- as undisclosed investment in purchase of plot in the hands of assessee while making such addition, the entire 'on money' paid for the purchase of land was made in the hands of 4 assessee in two assessment years, though, the ½ share was of Sh. Manjeet Singh, as per registered title deed. The AO held it to be as undisclosed investment for purchase of land in Village Aayali.
The assessee filed appeals before the Ld. CIT(A). In the order of Ld. CIT(A), from pages 2 to 20, the assessment order has been reproduced and submissions of the assessee in detail have been reproduced. The Ld. CIT(A) has given his decision after considering the submissions of the assessee, the Ld. CIT(A) deleted the addition to the extent of Rs. 78,12,500/- in financial year 2016-17 and Rs. 25,16,034/- in financial year 2017-18 and held that, since 50% share of the land was purchased by Sh. Manjeet Singh, therefore, the undisclosed investment in the purchase of land by the assessee to the extent of 50% of Rs. 78,12,500/- and Rs. 25,16,500/- was confirmed.
Against the order of the Ld. CIT(A) the assessee is in appeal before us.
During the course of hearing, the Ld. Counsel for the Assessee argued that that there was search in the case of assessee and the proceedings were initiated u/s 153C on the basis of Whatsapp chat of her Mobile. It was stated at the very outset that, no statement of the assessee was recorded either during search or during post search investigation or during the course of assessment proceedings, regarding the 'images' as is evident from the Assessment order.
8.1 It was further submitted that the land was purchased through registered title deed and the payment was made before the Sub