|CORAM:||Rajesh Kumar (AM), Saktijit Dey (JM)|
|CATCH WORDS:||cash credit, Undisclosed Income|
|COUNSEL:||Dr. K. Shivram|
|DATE:||October 11, 2017 (Date of pronouncement)|
|DATE:||November 4, 2017 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 68: In the absence of any direct evidence demonstrating that the assessee received cash payment, no addition can be made merely on presumption and surmises and on estimate basis. For making the addition on account of cash component, it is the duty of the AO to bring on record corroborative evidence to establish the fact that the entries made in the seized document were correct|
Undisputedly, on the basis of evaluation sheet found from the computer of Ms. Sandhya Ramchandra, the Assessing Officer has estimated income on cash component supposed to have been received by the assessee from Matrix. However, on a perusal of the evaluation sheet, a copy of which is at Page–110 to 114 of the paper book, though, it appears, amounts have been mentioned in cash and cheque beneath assessee’s name, however, there is no evidence that cash was actually paid to the assessee. It is a fact that the assessee has acknowledged cheque payment of Rs 2.07 crore. However, that does not mean cash amount of Rs 58 lakh was also paid to the assessee. In any case of the matter, the Assessing Officer has not brought on record any clinching evidence on the basis of any enquiry made by him to demonstrate that the assessee has actually received any cash as per the evaluation sheet from Matrix. On the contrary, an affidavit has been filed on behalf of Matrix, stating that no cash was paid to the assessee. Therefore, in the absence of any direct evidence demonstrating that the assessee had received cash payment from Matrix, as shown in the evaluation sheet, no addition can be made merely on presumption and surmises and on estimate basis. For making the addition on account of cash component, it was the duty of the Assessing Officer to bring on record corroborative evidence to establish the fact that the entries made in the evaluation sheet were correct. Therefore, in the absence of any evidence brought on record, the addition was rightly deleted by the learned Commissioner (Appeals). The decisions relied upon by the learned Authorised Representative also support the aforesaid view. Therefore, we uphold the order of the learned Commissioner (Appeals) on this issue by dismissing the ground raised by the Revenue.
i) Common Cause v/s Union Of India, 77 taxmann.com 245 (SC);
ii) CIT v/s Jayaben Ratilal Sarothiya, 222 taxman 64 (Guj.);
iii) Uday C. Thmhankan v/s DCIT, 174 TTJ 151 (Mum.); and
iv) Dr. M.K.E. Menon, 248 ITR 310 (Bom.).
There was a chance for the AO to call for the payin slip to at least find out who had deposited the cash which would have clinched the issue of proper follow up was carried out