The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the addition made under section 69A of Income Tax Act 1961 towards the purchase of windmills based on dump unsigned documents .
The assessee Array Land Developers Pvt. filed the appeal against the addition made by the assessing officer under section 69A of Income Tax Act based on dumb unsigned documents towards purchase of windmill.
The facts leading to arising the appeal was when a search action was conducted in the residential premises of D. Shakila w/o Rajarajan, a laptop used by Smt. V.K. Sasikala was seized. Smt. V.K. Sasikala confirmed that the laptop belonged to her and it was used by her.
On examination of the laptop the department found details of parties from whom windmill was purchased and which was related to assessee. Finally, it was assumed that the documents are assessee and the assessee entity paid unaccounted cash towards purchase of windmills.
Hence, the AO proceeded to add the differential amount allegedly paid in cash for acquisition of windmills from these parties as unexplained money under Section 69A Income Tax Act for different assessment years.
Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals)[CIT(A)] who dismissed the appeal. Against the CIT(A) order, the assessee filed appeal before the tribunal.
Before the bench R. Venkata Raman, counsel for the assessee argued that AO erred in making addition on the basis of assumptions and placing reliance on excel sheet and alleged unsigned receipts not belonging to the assessee.
Further, the counsel contended that the laptop was the personal laptop of a major shareholder and on the basis of this sheet alone, the additions could not be sustained in law.
M.Rajan , department representative, supported the decision of the lower authorities.
The tribunal after reviewing the facts pointed out that the addition made by the lower authority based on the dumb documents and in the absence of any signatures of any of the parties, the same would not carry any evidentiary value.
Further, it was also contended that upon perusal of loose sheets as extracted in the assessment order, these papers did not bear signature of any of the parties and the same are merely in the shape of dumb documents only. These documents, on a standalone basis, could not establish the factum of alleged cash payment. Hence, a bench consisting of two members, Manoj Kumar Aggarwal (Accountant Member) and V. Durga Rao (Judicial Member) reviewed the arguments presented by both parties observed that addition, has been made on mere presumptions and assumptions of cash payment by the assessee which is not backed up by any evidence on record.
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