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Facts
The assessee filed an income tax return, and during assessment under Section 143(3), an addition of Rs. 5,00,000/- was made under Section 69C. This addition was based on a photo image of a ledger account from a third party's mobile phone, purporting to show a payment made by the assessee to a marble/granite supplier.
Held
The Tribunal held that the addition made under Section 69C could not be sustained. It was noted that no statements were recorded from the third party (Sh. Ravinder Singh) or the alleged marble supplier to corroborate the photo image or the alleged transaction. The Tribunal concluded that an addition based merely on a photo image from a third person's phone, without cogent corroborative material, cannot be upheld.
Key Issues
Whether an addition under Section 69C can be sustained solely based on a photo image of a ledger account found in a third party's mobile phone, without corroborating evidence or statements from the relevant parties.
Sections Cited
69C, 143(3)
AI-generated summary — verify with the full judgment below
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.