The Hyderabad bench of the Income Tax Appellate Tribunal (ITAT), while deleting an addition made by the income tax authorities based on the data retrieved from the pen-drive and the admission by the vendors held that such evidence has no substantial evidentiary value to make addition under section 69B of the Income Tax Act, 1961.
The Tribunal bench comprising Judicial Member Laxmi Prasad Sahu and Accountant Member S.S. Godara was considering three appeals where the appellants challenged the departmental search action which led to addition under Section 69B un-explained investment addition(s) in the nature of on-money payments involving varying sums of money, stated to be based on the alleged incriminating material found/seized.
The Tribunal relied on an earlier decision in the assessee’s group concern’s appeal wherein it was observed that “we cannot conclusively agree on the finding of the Ld. Revenue Authorities that the assessee has paid on-money of Rs. 14,09,25,00/- to the sellers of the property because the two pieces of evidence relied on the Ld. Revenue Authorities viz., the data retrieved from the Pen-drive and the admission by the vendors of the property though may have a persuasive value but will not have much substantive evidentiary value in order to make additions in the hands of the assessee. Therefore, in the interest of justice, we hereby direct the Ld. AO to delete the addition made forRs. 14,09,25,000/- in the hands of the assessee towards on-money paid for the purchase of the residential property”.
Relying on the above order, the Tribunal held that “we adopt the foregoing discussion as well as reasoning contained therein; mutatis mutandis to delete all the impugned Section 69B identical un-explained investment(s)/additions involving varying sums in these three instant appeals. The corresponding grounds to this effect stand accepted, therefore.”
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