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Facts
A search under section 133A of the Income Tax Act led to the discovery of a loose paper, which was a ledger account of the assessee, showing cash received totaling Rs. 1.27 Cr. The AO also found two unsecured loans amounting to Rs. 30 lacs and Rs. 90 lacs. These additions were made under section 153A.
Held
The Tribunal held that since the document was not found at the assessee's premises and the identity of the AOP was not established, the addition under section 68 was not justified. The Tribunal also noted that the assessment was unabated and no incriminating material was found.
Key Issues
Whether additions made under section 153A based on documents not found at the assessee's premises and without establishing the identity of the creditor are justified.
Sections Cited
250, 153A, 133A, 68, 143(3), 148
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Income Tax Appellate Tribunal, JAIPUR BENCH “B”, JAIPUR
Before: SHRI GAGAN GOYAL & SHRI NARINDER KUMAR
This appeal by the revenue is directed against the order of CIT(A), Jaipur -04 dated 28.10.2024 passed u/s. 250 of the Income Tax Act, 1961 (in short ‘the Act’). The revenue has raised the following grounds of appeal:
1. I) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) is justified in granting relief to the assessee without considering the fact that addition was made on the basis of incriminating documents and the ratio of Hon. Supreme court decision in the case of Pr.CIT Central-3, Jaipur Vs Abhisar Buildwell Pvt Ltd.
-JP-2024 ACIT vs. Nawal Singh Ratnawat
(2023)149/taxman.com399(SC)/2023/293 Taxman 141(SC)/(2023)454 ITR 212(SC) is not applicable in present case? ii) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) is justified in granting relief to the assessee without considering the judgment of Hon'ble supreme court in the case of CIT(Chennai) Vs. S. Ajit Kumar civil appeal no. 10164/2010 ? iii) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) is justified in granting relief to the assessee without deciding the issue on merits specifically when the assessee was not able to satisfactorily discharge his onus u/s. 68 with regard to unexplained cash credits of Rs. 1,27,50,000/- in respect of unsecured loan? iv) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) is justified in granting relief to the assessee without deciding the issue on merits specifically when the assessee was not able to satisfactorily discharge his onus u/s. 68 with regard to unexplained cash credits of Rs. 30,00,000/- in respect of unsecured loan? v) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) is justified in granting relief to the assessee without deciding the issue on merits specifically when the assessee was not able to satisfactorily discharge his onus u/s. 68 with regard to unexplained cash credits of Rs. 90,00,000/- in respect of unsecured loan? vi) The appellant craves leave or reserves right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.
2. the appellant craves leave to add, amend or withdraw any of the ground of appeal during the course of appeal proceeding.
The brief facts of the case are that the assessee Individual was subjected to a search u/s. 133A of the Act w.r.t Kiran Fine Jewellers Group on 02.08.2017, of which the assessee is one of the members. A notice u/s. 153A of the Act was issued vide dated 11.01.2019 issued and in response to the same the assessee filed a return of income of Rs. 2,94,00,690/- on 21.01.2019. It is pertinent to mention that same return was filed by the assessee u/s. 139(1) of the Act on 27.09.2012 and same was assessed as return income u/s. 143(3) of the Act vide -JP-2024 ACIT vs. Nawal Singh Ratnawat order dated 20.03.2015. The assessee primarily derives income from salary, business and other sources.
A survey u/s. 133A of the IT. Act was carried out at the official premises of M/s. Nawal Bana Entertainment LLP, Plot No. 48, 1st Floor, Manokamna, Golimar Garden, Sahkar Marg, Jaipur on dated 02.08.2017 wherein a loose paper was found and impounded as page no. 116, Exhibit-4, Annexure-A. The page so found and impounded is ledger account in the books of the assessee Shri Nawal Singh Ratnawat issued for confirmation from M/s. Balvinder Singh Hari Singh AOP. The page reveals that the assessee has received cash on various dates totaling to Rs. 1.27 Cr. during the year under consideration. The scaned copy of the same is as under:-
-JP-2024 ACIT vs. Nawal Singh Ratnawat 4. The document reproduced (supra) was found during the survey operation u/s. 133A of the Act at the premises of M/s. Naval Bana Entertainment LLP and not on the premises of the assessee. In addition to the above information the AO found two unsecured loans from Sh. V.N. Aiyer and Sh. Vijay Singh amounting to Rs. 30 lacs and 90 lacs respectively. After detailed deliberations, the AO finalized the assessment u/s. 153A of the Act and added the figure of Rs. 1.27 Cr., 30 lacs and 90 lacs to the income of the assessee. The assessee being aggrieved by this order of the AO preferred an appeal before the ld. CIT (A), who in turn allowed the appeal of the assessee. Now, the revenue being aggrieved with the order of the ld. CIT (A) preferred the present appeal before us.
We have gone through the order of the AO, the order of the ld. CIT (A) and grounds taken by the revenue. It is observed that the Ground Nos. 4 & 5 raised by the revenue pertain to the additions made u/s. 68 of the Act i.e. unsecured loans received from Sh. V.N. Aiyer and Sh. Vijay Singh amounting to Rs. 30 lacs and 90 lacs respectively. The fact, that the matter under consideration before us pertain to an unabated assessment, hence, any transaction which is fully recorded in the books of accounts of the assessee and there being no incriminating material found during the search, no addition can be made u/s. 153A r.w.s 143(3) of the Act. We agree with the view of the ld. CIT (A) while deciding the issue relying on [2023] 149 taxmann.com 399 (SC) PCIT, Central-3 vs. Abhisar Buildwell (P.) Ltd.
In view of above substantive Ground Nos. 4 & 5 raised by the revenue are dismissed and the order of the ld. CIT (A) is confirmed. Now, we are taking up the -JP-2024 ACIT vs. Nawal Singh Ratnawat substantive Ground No. 3 i.e. addition of Rs. 1.27 Cr. It is observed that this addition was made based on a document found (in the name of M/s. Balvinder Singh Hari Singh, AOP) at the premises of M/s. Nawal Bana Entertainment LLP, PAN AALFN 7559A. On this issue, we have gone through the report of the AO vide dated 23.09.2025, wherein the assessment order of M/s. Nawal Bana Entertainment LLP has been furnished before us and there is not even a whisper about the document found at their premises as reproduced (supra) and considered for the purposes of addition of Rs. 1.27 Cr. in the case of assessee. Moreover, we are reproducing the relevant extract of the AO’s report as under:-
-JP-2024 ACIT vs. Nawal Singh Ratnawat -JP-2024 ACIT vs. Nawal Singh Ratnawat 7. We have gone through the piece of document along with the report of the AO (both reproduced (supra)). One fact is unchallenged in this case that the document used against the assessee was not found at the premises of the assessee and vide para 2 of the AO’s report (reproduced (supra)) also failed to establish identity of M/s. Balvinder Singh Hari Singh, AOP. Now, as addition has been made u/s. 68 of the Act, being a deeming fiction, largely the onus is on the revenue to establish the evidence against the assessee.
In this case neither the document was found at the premises of the assessee nor did the revenue discuss the piece of document in the assessment of M/s. Nawal Bana Entertainment LLP nor is able to identify M/s. Balvinder Singh Hari Singh, AOP. In the light of these facts no negative inference can be drawn against the assessee, especially when the assessment order is being passed u/s. 153A of the Act. The revenue was fully empowered to take up the issue under the appropriate section i.e. section 148 of the Act. Here, we do not find any perversity in the order of the ld. CIT (A) hence, the same is confirmed and grounds raised by the revenue are dismissed.
In the result, the appeal of the revenue is dismissed.
The Order is pronounced in the open court on the 25th of September 2025.
Sd/- Sd/- (NARINDER KUMAR) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Jaipur, िदनांक/Dated: 25/09/2025 -JP-2024 ACIT vs. Nawal Singh Ratnawat Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. आयकर आयु� CIT 3. 4. िवभागीय �ितिनिध, आय.अपी.अिध., Sr.DR., ITAT, 5. गाड� फाइल/Guard file.