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2024 (4) TMI 311 - AT - Income TaxValidity of proceedings u/s 153C - statement recorded u/s 132(4) and the material seized at third party premises - Addition of undisclosed amount - CIT(A) deleted addition - HELD THAT:- The seized material was in the nature of dumb document which did not contain complete and unambiguous information to arrive at a conclusion that the assessee was in receipt of the payments found noted therein against the name ‘HM’. There was no corroborative evidence to support and supplement the details in the seized material to conclusively establish that the name ‘HM’ found in the seized material refers to the assessee only. There was no corroborative evidence to prove that the payments noted in the seized material have actually materialized and transfer of money had actually taken place between the concerned parties. In view of all these reasons, the addition of alleged receipts by the assessee from M/s SRS Mining has rightly been deleted by Ld. CIT(A). We endorse the view of Ld. CIT(A), in this regard. Addition of alleged receipts from assessee to SRS Mining and distribution thereof to various constituencies - As observed that the impugned addition has been made based on the entries found in the loose sheets seized from the office premises of M/s SRS Mining coupled with statement of Shri K. Srinivasulu u/s 132(4) (from whose possession the material was seized) with regard to the contents of the said seized material, entries found in the loose sheets seized from the residential premises of accountant of M/s. SRS Mining and the statement of Shri. T. Shanmugasundaram u/s 132(4) dated 09.12.2016 with regard to the contents of the said seized material. Name of the assessee did not appear in any of the relevant loose sheets taken into consideration by the AO while drawing such an inference. It was also noted that the acronym ‘HM’ appears as scribbling at the top of the loose sheets only whereas the said acronym ‘HM’ was not found noted in any of the remaining loose sheets as referred to by Ld. AO. Though the name of the assessee was not found noted in any of the relevant seized loose sheets and the acronym ‘HM’ was found noted only on top of two sheets, Ld. AO held that entire entries in the said seized loose sheets reflected the transactions of the assessee merely by relying on the statement of Shri K. Srinivasulu. Statement of Shri. K. Srinivasulu (from whose possession the material was seized) recorded u/s 132(4) is concerned, he merely stated that ‘HM’ found in the seized notebook denotes ‘Housing Minister’. However, Shri K. Srinivasulu did not explain or elaborate in the said statement regarding what the acronym ‘HM’ stands for. Further, this statement was a retracted statement. Considering the observation of Shri P. Rama Mohan Rao [2018 (12) TMI 1990 - MADRAS HIGH COURT] his statement, on standalone basis, would have no evidentiary value. The Hon’ble Court held that if Ld. AO was to rely on this statement, he was to let in other reliable evidence to corroborate the same. Similar were the directions of Hon’ble Court in the case of M/s SRS mining [2022 (8) TMI 968 - MADRAS HIGH COURT] Therefore, the statement of Shri K. Srinivasulu could not be used against the assessee unless some other evidence to corroborate the same was made available on record. Another fact is that the material has been seized from a third-party and the presumption of Sec.132(4A) r.w.s. 292C would arise qua the searched person or qua the person who was found in the possession or control of such documents. Such a presumption was not applicable to a person other than the searched persons as held in the case of MISS LATA MANGESHKAR. [1973 (6) TMI 13 - BOMBAY HIGH COURT] and various other decisions including the decision of Gaurangbhai Pramodchandra Upadhyay [2020 (3) TMI 882 - GUJARAT HIGH COURT] as well as the decision of Vinit Ranawat [2015 (6) TMI 608 - ITAT PUNE] In a recent decision titled as CIT vs. Sunil Kumar Sharma [2024 (2) TMI 116 - KARNATAKA HIGH COURT] held that a sheet of paper containing typed entries and in loose form, not shown to form part of the books of accounts regularly maintained by the assessee or his business entities, do not constitute material evidence. Supreme Court in the case of CBI vs. V.C. Shukla [1998 (3) TMI 675 - SUPREME COURT] held that it is that independent corroborative evidence is required in respect of entries in regular books of accounts and the same would apply in the present case. The adjudication of Ld. CIT(A), on legal grounds as well as on merits, would not require any interference on our part. Appeals of the revenue as well as the cross-objections of the assessee, for all the three years, stands dismissed.
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