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Facts
The assessee filed appeals against an addition of Rs. 5,00,000 made by the Assessing Officer under Section 143(3) for an alleged cash payment to a marble/granite supplier. This addition was based on a photo image of a ledger account found in a third party's mobile phone.
Held
The Tribunal ruled that the addition was not sustainable as there was no cogent material to support it. Neither the third party nor the alleged supplier's statements were recorded to verify the photo image or the purported payment, making the addition based solely on this unverified evidence invalid.
Key Issues
Can an addition be sustained based solely on an unverified photo image of a ledger account found in a third party's mobile phone without further corroborative evidence?
Sections Cited
143(3), 69C
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Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: Dr. B. R. R. Kumar, Sh. Anubhav Sharma
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeals have been filed by the assessee against the orders of ld. CIT(A)-23, New Delhi dated 22.03.2023 and 27.03.2023. 2. Since, the issue involved in both the appeals are similar and they were heard together and being adjudicated by a common order. In is taken as the lead case. Following grounds have been raised by the assessee: “1. That the order passed by Ld. CIT(A) partly allowing the appeal is bad in law.
2. That the Ld. CIT(A) has erred in sustaining the addition made by Ld. AO of Rs. 9,90,000/- u/s 69C.
3. The above grounds are without prejudice to each other.
4. That the appellant crave leave to adduce additional evidence u/r 46A, thought appropriate and necessary.”
2 & 1605/Del/2023 Kushal Singh 3. The assessee filed return of income declaring total income of Rs.1,80,33,690/- and addition of Rs.5,00,000/- has been made on account of cash payment made of Rs.5,00,000/- during the assessment completed u/s 143(3) of the Income Tax Act, 1961.
Heard the arguments of both the parties and perused the material available on record.
We find that the addition of Rs.5,00,000/- has been made based on the photo image in the mobile of one Sh. Ravinder Singh. The photo image was of the ledger account of a marble/granite supplier in the name of the assessee found in the phone of a third party Sh. Ravinder Singh. Neither the statement of Sh. Ravinder Singh has been recorded to prove as to what the ledger is all about, why it was available in his phone nor any statement of the alleged marble supplier was recorded to prove that the assessee has paid the amount of Rs.5,00,000/- to the marble supplier. In the absence of any cogent material, addition made merely based on the photo image of phone of a third person cannot be sustained.
In the result, the appeals of the assessee are allowed. Order Pronounced in the Open Court on 21/06/2024.