Vijay Kumar Manchanda vs ACIT

PER ANUBHAV SHARMA, JM:

This appeal preferred by the assessee against the order dated 11.02.2025 of Ld. National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in DIN & Order No : ITBA/NFAC/S/250/2024-25/1073146375(1) arising out of the assessment order dated 01.03.2024 u/s 147 r.w.s 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by NaFAC, Delhi, for AY: 2016-17.

The assesse is an individual engaged in the business of manufacturing and trading of chemicals, during the year under consideration, in the name and style of M/s Shyne Industries Ltd. The assesse filed return declaring income of Rs.9,42,490/- and the same was processed u/s 143(1) but subsequently the case was reopened on the basis of search on Omaxe Group. During the assessment ld. AO has raised query on account of reasons that assesse has made payments in cash of Rs.75,22,620/- to Omaxe Group for acquisition of immovable property which is mentioned in the agreement and the same was said to be unexplained income. It was however, submitted that there has been no transaction with Omaxe Group and relevant evidences were filed but assessing officer was not satisfied and had made the addition which has been sustained by ld. CIT(A) and both the sides have relied their respective cases as coming up from the impugned orders.

We have given a thoughtful consideration to the material on record and we find that what assessing officer has relied is excel sheet extract which allegedly showed Omaxe Group receiving certain amount in the cash for project Chandigarh plotted Colony-II. We find that this excel sheet mainly mentions certain figures which has been allegedly suppressed by factor of Hundreds. However, on examination of the impugned orders we find that there was no categorical evidence or details of what property was actually purchased by the assesse and apart from what is alleged to be cash payment, what payments were made by any other mode for acquiring that property. Some unit No. CPC/61 is mentioned but how and when assesse actually acquired this, at any point, is not reflecting from alleged excel sheet or any of the impugned orders.

Assessee had filed an affidavit stating that he had entered into no property transaction with Omaxe Group. The same however, has been left out of consideration by the assessing officer observing that it is not evidence in the eyes of law within the meaning of Section 3 of the Evidence Act 1972. However, we are of the considered view that strictly speaking provisions of Evidence Act, are not applicable to the assessment proceedings, however, the fundamental principles of admitting best available evidences can be relied to draw inference or presumptions. When assesse furnishes an affidavit, deposing anything oath and making liable to perjury, same cannot be left out of consideration for the reason that Section 3 of the Evidence Act does not provide that provisions of Evidence Act are not applicable to facts. The quasi judicial authorities are supposed to take into account affidavits of the parties and at the most call upon the parties or witnesses for cross examination to test the veracity of the fact deposed in the affidavit. However, to brush aside affidavit altogether without any material in substantive evidence to counter facts deposed is not justified.

In the case of assessee, alleged electronic evidence itself was not the complete document but for which certain inferences ought to be drawn by the assessing officer by assuming the figures to be suppressed by the factor of 100 and at the same time the transaction as reflected has not been corroborated by any oral or documentary evidences to show acquisition of any property by the assesse. Thus, the affidavit of assessee, stands unrebutted. We are of the considered view that the addition made deserves to be deleted. Accordingly, we sustain the ground No. 1. The appeal is allowed and the impugned addition is deleted.