TMI Blog2023 (2) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... om the material facts of the case there is no merit for the addition made by the AO. Considering the above facts and circumstances and judicial pronouncements the addition is not sustainable and hence deleted - CIT(A) has rightly considered the facts and adjudicated the grounds on merits - Decided against revenue. Addition of interest payment in cash - AY: 2015-16 - HELD THAT:- We find that in the impugned assessment year 2015-16, the Ld. CIT (A) has consistently allowed the appeal of the assessee on the protective additions made by the Ld. AO with respect to the receipt of cash by the assessee in the absence of any corroborative evidence found against the assessee during the search operations in the assessee s premises - CIT(A) has directed the Ld. AO to delete the addition of interest payment in cash based on the relief allowed in deleting the addition of cash for Rs. 2.50 Crs. We are of the considered view that the Ld. CIT(A) has rightly deleted the additions in the impugned assessment year also and we do not find any reason to interfere in the decision of the Ld. CIT(A) - Dismiss the appeal of the Revenue. - I.T.A. No. 185 & 186/Viz/2022, C.O. No. 18 & 19/Viz/2022 I.T.A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed the return of income as admitted in the original return on 20/12/2021. Subsequently, a notice U/s. 142(1) was issued on 20/01/2022 requesting the assessee to furnish the information as detailed in questionnaire. Considering the part submissions made by the assessee another notice U/s. 142(1) was issued on 3/3/2022 requesting the assessee to furnish documentary evidences and sources in respect of the cash transactions made with M/s. Polisetty Somasundaram. During the course of the assessment proceedings in the case of M/s. Polisetty Somasundaram, Sri Polisetty Shyam Sunder, Managing Partner of M/s. Polisetty Somasundaram stated that the cash transactions pertain to unaccounted cash advances received and admitted the same as an unexplained income of M/s. Polisetty Somasundaram. Later, Mr. Polisetty Shyam Sunder retracted and stated that the above transaction pertain to security deposit of Rs. 2.50 Crs given by Sri Bolisetty Kameswara Rao (the assessee) against the loan given on 14/2/2014 to M/s. Durga Corporation in which Sri Bolisetty Kameswara Rao is one of the partners. When the assessee was confronted with the statement, the assessee vide its letter dated 14/3/2022 denied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the assessee s premises was searched during July, 2019 and no incriminating material was found with respect to this cash transaction in the premises of the assessee. The Ld. AR further submitted that merely based on the notings in the pen drive seized from the premises of M/s. Polisetty Somasundaram cannot be a basis, as corresponding corroborative evidence could not be traced in the assessee s premises. The Ld. AR therefore submitted that the order of the Ld. CIT(A) be upheld. 6. We have heard both the sides and perused the material available on record. It is an admitted fact that no corroborative evidence was traced from the premises of the assessee during the search operations in the assessee s own premises. The Ld. AR s submission that the loan was taken by way of RTGS and repaid by way of RTGS was evidenced from the paper book submitted before us. Further, there is also merit in the argument of the Ld. AR that when the cash balance of Rs. 2.50 Crs was available with the assessee, why a loan was taken from M/s. Polisetty Somasundaram by M/s. Durga Marketing Corporation where the assessee is a partner deserves consideration. Further, it was also alleged that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investigation that the contents therein pertain to the said person. The Hon ble High Court of Delhi in the case of Commissioner of Income Tax vs. Sant Lal reported in [2020] 118 taxmann.com 482 (Delhi) held where in search of premises of third party, diary was seized alleged containing entries of hundi transactions on behalf of parties, including assessee whose names were written in abbreviated/code words, since diary was neither found from premises of assessee nor was it in hand writing of assessee and Revenue failed toproduce cogent material to link assessee to dairy, no addition could be made. The Hon ble Court affirmed the findings of the CIT (A) and ITAT that the assessing officer did not make any further enquiry / investigation in support of the addition made. Similar view was affirmed by the Hon ble Supreme Court in the case of Pr. CIT vs. Admine Construction (P) Ltd., reported in 99 Taxmann.com 45 (SC). There was no positive evidence such as loose papers, vouchers or agreement between the appellant and M/s. Polisetty Somasundaram found at the premises of the appellant that would confirm the action of the AO in making addition in the hands of the appellant. The loan transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the statement given by third parties. In the instant case, both the parties, search party as well as the assessee have denied having exchanged the on-money for sale of land. Even after the assessee s case is covered under search operations u/s. 132, the department did not unearth any evidence regarding exchange of cash in sale transaction. Therefore, since the facts are identical and department could not place any other material to controvert the finding given by the Ld. CIT(A) and on other decision of any High Court or Apex Court was brought on record to controvert the decisions relied upon by the assessee, we do not find any reason to interfere with the order of the Ld. CIT(A) and the same is upheld. 5.3. It was further held in the assessment that as per the information contained in the pen drive the appellant paid interest of Rs. 6,16,438/- to M/s. Polisetty Somasundaram. Had the appellant given cash of Rs. 2,50,00,000 as has been alleged he would have received interest from the above party and not paid interest. Moreover, from the statement of Polisetty Somasundaram conflicting versions are noticed wherein initially it was said that the transactions in the pen drive re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting to Rs. 6,16,438/- based on the relief allowed in deleting the addition of cash for Rs. 2.50 Crs. We are of the considered view that the Ld. CIT(A) has rightly deleted the additions in the impugned assessment year also and we do not find any reason to interfere in the decision of the Ld. CIT(A) in the absence of any corroborative material evidence against the assessee during the search operations carried on in the assessee s premises. We are therefore inclined to dismiss the appeal of the Revenue. 12. In the result, appeal of the Revenue is dismissed. C.O. No. 18 19/Viz/2022 I.T.A. No. 185 186/Viz/2022 Assessment Year :2014-15 2015-16) (By Assessee) 13. These two Cross Objections are filed by the assessee for the AY 2014-15 2015-16. 14. In the Cross Objections, the assessee has raised legal ground regarding the validity of the notice U/s. 153C of the Act along with other grounds which are supportive in nature. 15. The Ld. AR relied on the decision of the CIT vs. Kabul Chawla [2016] 380 ITR 573 (Delhi) with respect to Ground No.1 in both the Cross Objections. We are of the considered view that since the appeal of the Revenue has been dism ..... X X X X Extracts X X X X X X X X Extracts X X X X
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