Addition u/s 69 on the basis of unsigned receipts found during search deleted by ITAT

Addition u/s 69 on the basis of unsigned receipts found during search deleted. Such unsigned receipts could not have been treated incriminating documents

ABCAUS Case Law Citation:
ABCAUS 3251 (2020) (02) ITAT

In the instant case, the appellant assessee had challenged the order of the CIT(A) in confirming the addition of Rs 50 lacs being undisclosed investments u/s 69 of the Income Tax Act, 1961 (the Act) on account of alleged cash loan given.

A search and seizure operation u/s 132 was conducted at the premises of a Company and the assessee.

During the search at corporate office of the company three loose pages were found and seized. These loose paper was confronted to the Chairman of the Company during his statement recorded u/s 132(4). He stated that these were receipts given by an different persons for cash loan given to them .

The Assessing Officer (AO) made an addition u/s 69 of the Act on the basis of said lose papers seized and statement recorded of the assessee during the course of search.

On appeal by the assessee, the CIT (A) confirmed the addition.

The Tribunal observed that within two days of the statement recorded, the assessee had filed a letter before the Addl. DIT(Inv.) retracting the statement given during the search operations.

In the said letter the assessee had alleged that after two days of interrogation and mental torture and threats the Income Tax officers the assessee was compelled to sign on sheets of questions and answers and various other papers along with reply framed by the officials. The assessee completely denied, withdrew and retracted from all the confessions which he was allegedly compelled to sign.

Further, the Tribunal noted that the perusal of the receipts revealed that the said receipts had been undated and unsigned. There was no signature of either the recipients or the payer. During the remand proceedings, the statement of the persons whose name were mentioned on the receipts  had been recorded wherein they denied on receiving any cash loan from the assessee. These persons have also filed an affidavit before the Assessing Officer reaffirming their statements.

Unsigned receipts found during search not incriminating documents

The Tribunal noted that above facts were available before the CIT (A). However, he did not accept the evidences filed by the assessee during the remand report and held that the statements and affidavits were nothing but an afterthought and only to help the assessee.  The CIT (A) had also confirmed that the three unsigned receipts were incriminating documents found in the search and seizure action u/s 132, which showed actual transactions had been taken place.

The Tribunal expressed disagreement with the observation of the CIT(A) who had confirmed the addition and at the same time accepted the fact that the receipts were unsigned and yet treated them as incriminating documents.

The Tribunal held that no addition was called for based on unsigned receipts and hence, the addition made by the Assessing Officer on this account was directed to be deleted.

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