Uncorroborated Loose Sheet Addition Invalid Without Inquiry and Misapplied to Wrong Assessment Year

ORDER

Mahavir Singh, Vice President. – This appeal of assessee for Assessment Year 2019-20 is arising from the order of the Ld. Commissioner of Income Tax (Appeals-30), New Delhi dated 14.11.2024 in appeal No. 30/10569/2018-19. Assessment was framed by the DCIT, Circle-32, New Delhi u/s. 153A of the Income Tax Act, 1961 (in short “the Act”) vide his order dated 30.09.2021.

2. At the threshold, Ld. AR for the assessee submitted that there is delay of 18 days in filing the appeal before the Tribunal for which the assessee has filed an application for condoning the said delay by submitting that the appellant was preoccupied in the political work and thus was unable to pursue the matter within the stipulated time and thus filed the belated appeal. Thus he requested to kindly condone the delay. Ld. DR could not controvert the aforesaid proposition of the Ld. AR. After hearing both the side and perusing the contents of the petition for condonation, we are of the considered view that reasonable cause has been attributed to the assessee to file this belated appeal, hence, the delay in dispute is condoned and appeal is admitted for adjudication.

3. The only issue on merits is as regards the order of the CIT(A) confirming the action of the AO in making addition of Rs. 1,12,75,000/- as unexplained money u/s. 69A of the Act being amount received totaling to Rs. 1,62,75,000/- during Lok Sabha Election.

4. The brief facts of the case are that a search action u/s. 132 of the Act was conducted on the residential as well as business premises of the assessee on 23.07.2019. During the course of search at the residence of the assessee at 3, Jarcanda Avenue, Westend Green, Rajokri, New Delhi, 120 pages of rough jottings in the handwriting of Mr. Sukumar Poria, a Congress worker and parttime employee of the assessee, was seized and classified as Annexure A-1. The AO during the course of assessment proceedings noticed from page 113 of Annexure A-I that the assessee has received a sum of Rs. 1,62,75,000/- during the Lok Sabha Election of 2019. AO required the assessee to explain the cash received during election. A page no. 113 of the loose papers seized i.e. Annexure-A-1 (which is made part of assessment order) is reproduced as under:-

This page 1 13 Annexure A-1 is a sheet titled as ‘D received for election’ and was prepared by Shri Sukumar Poria. Sh. Sukumar Poria, according to AO stated in his statement recorded during the course of search vide question no. 5 that D received as cash by him. Further, in view of bottom half of page of 113 of Annexure A-1 read as under:-

When this document was confronted, he denied the document by stating that “इस शीर्षक में वर्णित point no 1 से 6 पर अंकित 1,62,75,000 रूपए (पृष्ठ पर वर्णित total amount इस शीर्षक के तहत) मेरे द्वारा नहीं लिखीगई है न ही इसके बारे में कुछ जानता हूँ।

श्री सुकुमार पोरिआ की request पर यह statement temporary suspend (स्थगित) किया जा रहा है।

5. The statement of Shri Sukumar Prohia was stopped on 24.07.2019 and the same was confronted to Sh. Kuldeep Bishnoi and question posed to Sh. Kuldeep Bishnoi vide Question No. 61 which read as under:-

“Q.61 Sukumar Poria was shown page no. 113 of Annexure A-1, seized from your residential premises at 3 Jarcanda Avenue, Westend Greens, during his statement which was recorded u/s. 132(4) of the Income Tax Act, by Om Prakash Meena, DDIT on 24.7.2019. He was asked to explain the contents of the pages. In response he stated the following:

Please comment on the above.

6. Sh. Kuldeep Bishnoi replied the above question vide the following answer:-

“This document pertains to payments received for election. I agree to what Sukumar has said on the above received payments.”

7. The assessee before the AO contended that this is a dumb document and this document cannot be the subject matter of any addition because it does not indicate any date, does not carry his handwriting, nor there is any address, mobile no., email address, hence, this document was totally denied by the assessee. But the AO has not accepted this explanation of the assessee and rejected the explanation by noting that Sukumar Poria when confronted regarding entries at page no. 113 of Annexure A-I during statement recorded on 24.7.2019 in Question NO. 22 admitted the document as under:-

Q 22 में आपको page No – 112, 113 दिखा रहा हूँ जो की Annexure A-1 के रूप में 3, Jacranda Avenue , वेस्टर्न Greens, Rajokri से section १३२ आयकर अधिनियम की धारा के तहत की गयी तलाशी के दौरान जब्त की गई है? कृपया इन्पृष्ठो (Exhibit -4) को देखकर बताइये की क्या यह handwriting आपकी है और यदि है तो: कृपया इनपृष्ठों पर लिखित सामिग्री का विवरण दे?

Ans – हा, मैंने उपरोक्त प्रश्न में वर्णित पृष्ठ 112 एवं 113 को देख लिया है तथा में यह तथ्य स्वीकार करता हूँ की यह दोनों पृष्ठ मेरे ही द्वारा हस्तलिखित है, इन्पृष्ठ पर वर्णित हिसाब – किताब निम्नप्रकार है।

Question 22, I am showing you page Nos. 112 and 113, which have been seized as Annexure A-13 during the search conducted under Section 132 of the Income Tax Act at 3, Jacaranda Avenue, Western Greens, Rajokri. Please look at these pages (Exhibit-4) and tell whether this handwriting is yours, and if so, please give the details of the material written on these pages.

Ans. – Yes, I have seen pages 112 and 113 mentioned in the above question, and I accept this fact that both these pages are handwritten by me. The accounts written on these pages are as follows.

8. Shri Sukumar then provided detailed explanation which is part of assessment order at page nos. 33 to 35. Hence, the AO reached to the conclusion that documents Annexure A-I found and seized from the premises of the assessee contains many transactions which arepartly reflected in bank accounts, thus, cash transaction mentioned in these documents are receipts of cash during election which he failed to explain. Even the AO has tried to link Shri Sukumar Poria to Sh Kuleep Bishnoi, who in his statement recorded on 22.08.2019 u/s. 19(1) of the Prohibition of Benami Property Transactions Act wherein he accepted his association with Shri Sukumar Poria as under:-

“Sh. Sukumar Poria is my Personal Assistant (PA). He receives phone call on my behalf and does work on my instruction. He calls up people on my behalf for political gathering procure bank statements and right now seating in Gold Link House which is under construction. “

9. AO accordingly, added a sum of Rs. 1,12,75,000/- received by the assessee out of the total receipts of Rs. 1,62,75,000/- during Lok Sabha Election as unexplained money u/s. 69A of the Act. Aggrieved, assessee is in appeal before the Ld. CIT(A).

10. In appeal, Ld. CIT(A) noted that page no. 113 of Annexure A-I found during the course of search detailed out the amounts under the head ‘D received for election’ and the abbreviation ‘D’ was explained by Sh. Sukumar Poria as cash receipts. Ld. CIT(A) also noted that Rs. 80 lacs was received by cheque and RS. 82.75 lacs was received in cash. The CIT(A) also presumed in view of section 292C read with section 132(4A) of the Act that the document found i.e. Annexure A-I belongs to the assessee and contents are true, because the assessee is unable to rebut the same with evidence. The CIT(A) further noted the statement of Sh. Sukumar Poria who prepared the document has significant evidentiary value as he explained the entries in detail including the amounts received in cash and cheque which was corroborated with the circumstantial evidences. The CIT(A) noted that the assessee admitted that the documents related to payments received for election purposes and these admission combine with corroborative statement of Sh. Sukumar Poria, the document is not dumb document and it specifies the entries, details and supported by the corroborative evidences and statement, hence, CIT(A) also confirmed the action of the AO by observing in para 13.8 as under:-

“13.8 It is evident that the appellant received Rs. 1,12,75,000/- in cash during the Lok Sabha elections, as detailed in the seized document and corroborated by statements. The appellant failed to rebut the statutory presumption under Sections 132(4A) and 292C or provide evidence supporting his claim that the funds belonged to the party. Accordingly, the addition of Rs. 1,12,75,000/- under Section 69A of the Income Tax Act is upheld. Grounds of appeal no. 5 is dismissed. “

11. Aggrieved, with the aforesaid action of the Ld. CIT(A), assessee is in appeal before us.

12. Before us, Ld. Counsel for the assessee submitted that the three images reproduced in the assessment order allegedly of the statement of Late Sh. Sukumar Poria, cannot be attributed to the assessee, much less for the A.Y. 2019-20 and cannot be considered as ‘evidence’. He further submitted that keeping in mind the images depicted in the assessment order that the same does not contain the name of the assessee. There is no date, signature or any endorsement of the present assessee in the aforesaid images. The same does not contain the hand writing of the present assessee. It does not contains any details of the person/ entities which allegedly has/ have given the said amount to assessee. Further no enquiry in this regard has been made by the AO in this matter from the alleged persons/ entities, despite the specific contention of the assessee to resort to the provisions of section 131A of the Act. It does not contain any details in terms that whether the amount stated therein is actually received by the assessee much less for the A.Y.2019-20 or whether the same is merely an estimate. That it is not clear that when the documents itself which does not mentions any dates etc, then how can said entries be connected and attributed to the A.Y. 2019-20. It was further submitted that admittedly no forensic report or hand writing report of an expert has been brought on record by the AO to prove his point. It was further submitted that assessee has not confirmed of taking any cash and the conclusion drawn by the AO is arbitrary. Further, it is submitted that, they have harped upon the aspect that on being confronted, the assessee has agreed to what Late Mr. Sukumar Poria has said. In this regard, it is stated that the assessee has only agreed to the aspect that the above entries might be related to the amount received for election purpose. The AO is harping on the confirmation made by the assessee that “I agree to what Sukumar has said on the above received payments”. From the plain reading of the said statement, it shall be clear that Late Mr. Sukumar Poria has not stated that he has received the amount of cash on behalf of the assessee or that the assessee is the owner of the said cash. The assessee has not at all confirmed or accepted that the above amount was received by him in his individual capacity. The assessee has not, at all, confirmed that as to whether the amount has been received in cash or whether the same was receivable in cash or whether the amount can be crystallised to be received in the A.Y under consideration. It is reiterated that the endorsement only pertains and relates to the nature of entries recorded in the said page on estimation basis and nothing more.

13. It is submitted that the AO has grossly failed to appreciate that at the relevant point of time the assessee was the part of the political party i.e. Indian National Congress and Haryana State has ten Lok Sabha seats and it cannot be denied that the fund has been received for the party which was ultimately incurred for the party elections. The assessee was supervising the election process. The assessee specifically stated that (kindly refer to page no. 45-46 of the paper-book) that Late Mr. Sukumar Poria is no longer alive and he cannot be summoned for cross examination and hence no reliance should be placed on the diary of a dead person, without making any independent enquiry. The assessee has specifically requested the AO to resort to the provisions of section 131 (A) of the Act, but of no avail. Further, it was submitted that addition cannot be made merely on basis of a loose sheets found, because it is a trite law that the unsigned or undated loose paper without supporting evidence are considered dumb documents and cannot be considered as books of account, which are insufficient for making additions. To make addition based on the said loose sheets, the AO must support findings from loose papers with evidence, such as independent inquiries or material linking transactions to the assessee. It is a trite law that while loose sheets may be relevant for suspicion, the same does not contain any evidentiary weight without corroboration. The value of entries in the books of account, that such statement shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible, and that they are only corroborative evidence. It was further submitted that addition is not tenable because Section 69A of the Act is invoked when the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of assessee. In this case, Late Mr. Sukumar Poria was found in the possession of loose sheets and not in physical possession of any money, bullion, jewellery or other valuable article. Therefore, the above additions U/s 69A of the Act is not tenable. It is submitted that the addition has been made by the Ld. AO, from the third image (kindly refer page no. 22 of the assessment order) which is the statement recorded by Late Mr. “Sukumar in Hindi language he has clearly stated इस शीर्षक में वर्णित point No 1 से 6 पे अंकित 162 करोड़ 1,62,75,000 रूपए (पृष्ठ पर वर्णित total amount या इस शीर्षक के तहत मेरे द्वारा नहीं लिखी गई है न ही इसके बारे में कुछ जानता हूँ). From the bare perusal of the said statement, it shall be evidently clear that actually Late Mr. Sukumar is stating that the entry made under the title by (D), is not been made by him and therefore he does not know anything about it. This only shows that there are apparent contradictions in the statement recorded which cannot be given huge credence, which has been endeavored to be given by Ld. AO. It is submitted that the reliance placed by the Assessing Officer only on the statement of Mr. Sukumar Poria is completely erroneous and unsustainable in law. It is a trite law that additions cannot be made merely on the basis of a statement.

14. On the other hand, Ld.CIT(DR) has submitted that the learned CIT(A) has rightly upheld the addition of Rs. 1,12,75,000/- under Section 69A of the Act on the basis of cogent incriminating material recovered during search. It was submitted that the principal grievance of the assessee is against the confirmation of the addition of 1,12,75,000/- under Section 69A of the Act. It is further submitted that the learned CIT(A) has rightly affirmed the finding of the Assessing Officer after a detailed appreciation of the seized material, the statements recorded during the search and the surrounding circumstances. The addition is not based on mere suspicion or conjecture. During the course of search, a document containing details of receipts and utilisation of election funds was recovered from the residential premises of the assessee. The document specifically records receipt of funds through cheque as well as cash, including cash receipts aggregating to Rs.1,12,75,000/- relevant to the year under consideration. The contents of the seized document were further corroborated by the statement of Sh. Sukumar Poria, who admitted having prepared the document, as well as by the statement of the assessee recorded during the search proceedings. The explanation offered by the assessee that the funds belonged to the political party and not to him has been duly considered by both the Assessing Officer and the learned CIT(A). However, no contemporaneous record or supporting material was produced to substantiate this plea. It was further submitted that mere assertion that the cash was intended for party activities cannot, by itself, displace the evidentiary value of a document recovered from the possession of the assessee and corroborated by statements recorded under Section 132(4) of the Act. The learned CIT(A), therefore, rightly concluded that the assessee had failed to satisfactorily explain the nature and source of the cash receipts reflected in the seized material and that the addition under Section 69Aopf the Act was fully justified. The finding is based upon appreciation of evidence and does not call for any interference by this Tribunal.

15. We have heard rival contentions and gone through the facts and circumstances of the case. The admitted fact are that search and seizure operation under Section 132 of the Act was carried out on residential and business premises of the assessee on 23-7-2019, from where loose papers consisting of 120 pages of rough joltings by late Sukumar Poria, a Congress worker, a part-time employee of the assessee, was seized as Annexed A1. The relevant is only one page, that page number 113 of the Annexure A1, wherein the heading given is “D”, received for election, in the first half of the page, and total amount received is Rs. 1,62,75,000/-. The second half of the page is heading as “handover by D”, wherein, various amounts are depicted against different names, that is also amount of Rs. 1,62,75,000, and this paper is dated 13-5-19. It can be seen from the above page that majority of the amounts are received in cash, one or two items are received in cheque. The AO noted that some of the entries received by cash, while some have been received in cheque, and he counted that a sum of rupees 80 lakhs was received in cheque, while rupees 82.75 lakhs was received in cash. In the initial the revenue’ s entire premise was that the sheet which is titled as ‘D’, received for election, was prepared by Shri Sukumar Poria, but from his first statement recorded on 24-7-2019 under Section 132(4) of the Act, Shri Sukumar Poria totally denied the statement that this paper is not written by him and he does not know about the same. The statement was suspended according to revenue on the request of Shri Sukumar Poria temporarily, but again when the statement was recorded, according to revenue, Shri Sukumar Poria in reply to question number 22, admitted the alleged page number 112 and 113 of Annexure A1. The relevant question and answer of question number 22 is as it is reproduced at page 32 of the assessment order. Apart from this, there is no admission about this page, neither of the assessee nor of Shri Sukmar Poria. Shri Sukumar Poria has given a contradictory statement while recording statement under Section 132(4) of the Act, first denying the paper and on temporary suspension of the statement, subsequently admitted this paper. The statement of Shri Sukumar Poria was never provided to the assessee, neither during assessment proceedings nor during first appellate proceedings. The allegation of revenue is that page number 113 of Annexure A1 contains the amount received by assessee for election, that is election of Lok Sabha 2019. When the statement of Shri Sukumar Poria was confronted to the assessee, the assessee admitted the same by stating that “this doc pertains to payment received for election purposes, I agree to what Sukumar has said on the above received payments”.

16. Now before us, assessee’s main contention is that this document does not contain the name, there is no date, there is no signature or any endorsement of the present assessee in the aforesaid images. This document does not contain the handwriting of the present assessee and it does not contain any detail of the persons allegedly who have given the said amount to the assessee. There is no inquiry conducted by the AO on this matter from the alleged persons or alleged entities regarding receipt of amount by the assessee as alleged by the revenue. Admittedly, assessee has not confirmed taking of any cash and the statement of late Sukumar Poria cannot be relied upon because there is contradictory statement and he is no more to confirm or deny the statement. Admittedly, assessee was part of political party and he was a senior politician of Haryana, deeply engaged in electioneering in Haryana and Haryana State has 10 Lok Sabha seats and it cannot be denied that the funds have been received for the party from the workers or for any other entity, it is not clear. In such circumstances and fact of the case, whether merely on the basis of loose sheets found, addition cannot be made without corroborating evidence or without supporting evidence. Hence we are of the view that to make addition based on the loose sheets, AO must support the findings from the loose papers with evidence such as independent inquiry or material linking the transaction to the assessee. There are clearly many names mentioned of various persons or entities from whom the AO could have verified. However, no inquiry was conducted by the AO to know the veracity or authenticity of the loose sheets. Accordingly, we are of the view that once the AO has not carried out any exercise in any form to corroborate the theory, that it is actually the assessee, who has actually paid or received or spent the amount stated in the assessment order in cash and none of the alleged recipients of the cash towards alleged election expenses, were ever summoned by the department to question over such transaction, and hence the same cannot be attributed to assessee, as the alleged notebook, after denial of assessee, is remained unproved. In our view, no attempt has been made by the AO to provide any cogent explanation and admissible evidence with regard to the source, possession, transaction, use or application of such cash. Hence the departmental authorities failed to correlate the income of the assessee with the amount that has been spent for election expenses as alleged by the AO that have been borne by the assessee for the election, but AO failed to examine the nexus between the entries and that the assessee.

17. In terms of above, now we have to deal with the case law stated by the learned counsel for the assessee of the Hon’ble Supreme Court in the case of Common Cause (A Registered Society) v. UOI 394 ITR 220 (SC) wherein it is already held that the value of entries in the books of accounts, that such statement shall not alone be sufficient evidence to charge any person with liability, even if they are relevant or admissible, and that they are no corroborative evidence. Finally, it was held that even then independent evidence is necessary as to credibility of those entries, which is a requirement to fasten the liability. Further, the Hon’ble Supreme Court has laid down the principle and under:-

“18. We are constrained to observe that the Court has to be on guard while ordering investigation against any important constitutional functionary, officers or any person in the absence of some cogent legally cognizable material. When the material on the basis of which investigation is sought is itself irrelevant to constitute evidence and not admissible in evidence, w e have apprehension whether it would be safe to even initiate investigation. In case we do so, the investigation can be ordered as against any person whosoever high in integrity on the basis of irrelevant or inadmissible entry falsely made, by any unscrupulous person or business house that too not kept in regular books of account but on random papers at any given point of time. There has to be some relevant and admissible evidence and some cogent reason, which is prima facie reliable and that too, supported by some other circumstances pointing out that the particular third person against whom the allegations have been levelled was in fact involved in the matter or he has done some act during that period, which may have co-relations with the random entries. In case we do not insist for all these, the process of law can be abused against all and sundry very easily to achieve ulterior goals and then no democracy can survive in case investigations are lightly set in motion against important constitutional functionaries on the basis of fictitious entries, in absence of cogent and admissible material on record, lest liberty of an individual be compromised unnecessarily. “

18. Similarly, in the Hon’ble Delhi High Court in the case of CIT v. Girish Chaudhary [2008] 296 ITR 619 (Delhi), has held as under:-

8. Section 158B of the Act is a part of Chapter XIVB dealing with special procedure for assessment of search cases. The Chapter contains section 158B to section 158H. “Block period” and “undisclosed income” have been defined in clauses (a) and (b) to section 158B, for the purpose of the Chapter. We are concerned with the definition of “undisclosed income”. The provision in its entirely reads as follow:

19. It is clear from the above definition that the income or the property, which has been disclosed or would have been disclosed for the purposes of this Act, does not form part of the undisclosed income for purpose of block assessment. Under the provisions of Chapter XIV-B only such of the aforesaid categories of income, which has been found as a result of search can alone be the subject-matter of an assessment under this Chapter. The definition specifies that where an assessee has claimed any expenses or addition, which is found to be false, the same can only be regarded as an undisclosed income for the purpose of this Chapter.

20. Under Chapter XIV-B of the Act, before an addition of an “undisclosed income” can be made, the AO has to bring on record the material to show that on evidence found as a result of search there is an undisclosed income represented by credits appearing in the books of account.

21. The second facet of the argument raised is that the election of the Lok Sabha was held in Hisar Parliamentary constituency on 12th May 2019 which is the date for polling in Haryana, and search has been conducted on 23rd July 2019, and particularly there is no date on the pages where payments received or paid is mentioned. Hence this can be assessed only in Assessment Year 2020-21 and not in Assessment Year 2019-20. The assessee has raised the question of year of assessability without prejudice to the above facet of the argument. Learned counsel for the assessee before us submitted that even if it is assumed without admission and prejudice that notebook contains the details of election expenses, even then the addition in the relevant Assessment Year 2019-20 cannot be made as those entries belong to Assessment Year 2020-21 for the reason that the search happened in the assessee’s case only on 23rd July 2019, when this Annexure A1, was found during the course of search, as noted in regard to receipts or payments. Secondly, the election in Haryana i.e. in Hisar constituency for Lok Sabha polling date was 12th May 2019, that is corresponding to Financial Year 2019-20, relevant to Assessment Year 2020-21. The assessee has filed affidavit before the Election Commission of India for expenses in the month of May 2019. When these facts were confronted to the learned CIT-DR, she argued that the dates of election campaign are available, referred by the AO in regard to election schedule, i.e. 1st March 2019, 27th March 2019, 22nd March 2019. In terms of this learned CIT(DR), stated that assessee’s case falls under Assessment Year 2019-20 and not in Assessment Year 2020-21, as contended by the assessee.

22. We have heard the rival contention, gone through the facts and circumstances of the case. Admittedly, assessee contested the Lok Sabha election of 2019 from Hisar constituency and candidate was permitted to spend up to Rs. 50 lakhs for commercial expenses as per the Code of Conduct declared by the Election Commission of India. Election-related expenses by the assessee were funded by the Indian National Congress in terms of Model Code of Conduct issued by the Election Commission of India, and assessee received this money for election expenses from Indian National Congress in his bank account by way of RTGS on 01.05.2019. Further, there is no complaint of violation of Model Code of Conduct regarding the expenses for the limit set out by the Election Commission of India whatsoever against the assessee. None of the alleged recipients of the cash towards election expenses were summoned by the AO for explaining over such alleged cash transaction, which the AO has to do. In terms of the above, we are of the view that the AO has made this addition without bringing on record the material to show that the notebook found as a result of search contains undisclosed income represented by entries recorded in this notebook. In view of above, the authorities below have clearly erred in making the addition without corelating the entities recorded in the seized loose sheets, particularly the amounts recorded in Annexure A-1.

23. We also note that exactly on identical facts, the Hon’ble Delhi High Court in the case of CIT v. Sant Lal  (Delhi) has considered the issue of addition made on the basis of seized document from third party as under:-

“11. We have perused the impugned order and notice that the ITAT has given a finding of the fact that the case of the respondent is covered with the decision of the ITAT in the cases of Mahabir Prasad Gupta (supra) and Ashok Prasad (supra). The relevant portion of the impugned order read as under:

24. In case of the . Mahabir Prasad Gupta (supra), this Court has examined the facts and concluded that the concurrent finding of the facts cannot be disturbed as there was no material which could justify the assessment order. The relevant portion of the said order which reads as under:

“13. The above submissions fail to persuade this Court to interfere with the matter. Concurrent findings of fact have been rendered by the CIT (A) as well as by the ITAT. Nothing has been pleaded in the memorandum of appeal to persuade the Court to hold that those findings are perverse or contrary to the facts on record. Secondly, there is not a whisper in the order of the AO about any bag recovered from the premises of the Assessee during the search of the Assessee’s premises on 22nd March 2006. There is no such averment even in the memorandum of appeal filed before this Court. The material referred to in the order of the AO is that which was recovered from the premises of Mr. Brij Mohan Gupta and nothing else. That material has been discussed threadbare in the order of the CIT (A). Detailed reasons have been given as to why that material was insufficient to link the Assessee with “MP Gupta ” whose name finds mention in the diary and the documents seized from the premises of Mr. Brij Mohan Gupta.

14. Consequently, the Court is not persuaded to permit the Revenue, for the first time, before this Court to set up an entirely different case of there having been a bag seized from the premises of the Assessee which according to the Revenue contained incriminating material against the Assessee. “

25. In view of the aforesaid facts and the concurrent findings given by the CIT (A) and ITAT, it is evident that the Revenue has not been able to produce any cogent material which could fasten the liability on the respondent. The CIT(A) has also examined the assessment record and has observed that the AO did not make any further inquiry/investigation on the information passed on by the DCIT, Central Circle-19, New Delhi. No attempt or effort was made to gather or corroborate evidence in this relation.

26. In view of the above facts discussed and case laws relied upon, we are of the view that the addition made by the AO and confirmed by the CIT(A) in regard to alleged election expenses is without corroborating with any material and thus cannot be sustained and accordingly the same is deleted on merits.

27. As regards the second facet of argument made by the learned counsel for the assessee regarding year of assessability. Admittedly the assessee contested the Lok Sabha Election in 2019 and assessee carried out the election campaign in the month of April and May 2019, as the polling date in Haryana was 12th May 2019, and this date corresponds the financial year 2019-2020 relating to assessment year 2020-21. Furthermore, in the seized loose sheets especially page no. 113 of Annexure A-1, where the date is mentioned as 13.5.19 where alleged cash receipts/payments for expenses are noted of various persons. Furthermore, search also took place on 23rd July 2019 during which this Annexure A1 was found during the course of search. This date also correspond to financial year 2019-2020 relating to assessment year 202021. Since the date mentioned is 13.5.19 in the loose sheets regarding cash payment/cash receipts received from various persons, which clearly establishes that if at all these additions are to be made in assessment year 2020-21 and not in the instant assessment year 2019-20. Hence on this score also this addition is noted sustainable and liable to be deleted from this assessment year. This ground was raised by the assessee without prejudice to the issue of on merits as discussed above.

28. In the result, appeal of the assessee is allowed.