Sec. 153C of Income-tax Act, 1961— Search and seizure—When detailed explanation was submitted by assessee, it was incumbent upon AO to have given detailed reasons for not accepting the same and in absence of any reason given, action of AO was not approved.

Facts: Whether CIT(A) has erred in deleting the addition of Rs. 6,37,74,442 made by the AO on account of undisclosed transactions of sale of land found at the time of search and seizure operations carried on in the case of partners of the firm ?

Held, that assessee explained the circumstances under which the entries were made in the tally data in the pendrive by Shri Ajay Atlani. All these facts and assertions have remained un-controverted. The assessee explained some of the contents of the tally data in pendrive to demonstrate that the entries found in pendrive are fake. Assessee filed a summarised form of this explanation in the form of a chart. The explanation given to AO was to the effect that some of the entries in the pendrive do not match with the entries in regular books in the sense that in some cases, payments are mentioned to be made in cash in the pendrive while such payments are established to have been made through cheque in the regular books; land situated at Labhandi is shown to have been sold to one Shri Suresh G. Atlani while actually, the land was sold to one Shri Vijay Kumar Motwani through registered sale deed, copy whereof has been placed at page Nos. 113 to 128 of paper book. Likewise, some entries were found in the pendrive which mentions that the payments were made through Bank of Baroda and State Bank of India, Pandri Tarai Branch while the assessee explained that nobody in the group of assessee had any account in any branch of Bank, of Baroda and that the cheque No. in respect of payment made through State Bank of India did not relate to any bank account held by the concerned person in that bank. Likewise, many discrepancies were pointed out before AO which were rejected by him without giving any reason whatsoever. When such detailed explanation was submitted by the assessee, it was incumbent upon the AO to have given detailed reasons for not accepting the same and in absence of any reason given, we do not approve the action of the AO. It was held that the addition made by AO merely on the basis of entries in the seized documents, unsubstantiated with any corroborative evidence, is not justified. - DEPUTY CIT V/s ASHOK VIHAR - [2020] 205 TTJ 547 (ITAT-RAIPUR)