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14. In the result, the appeals of the assessee are partly allowed."

17. Further in the case of Shri D.V. Sadananda Gowda in ITA No. 895/Bang/2019 the issue is considered by the Tribunal in order dated 30.03.2021 wherein it is held as under: -

"7. I have heard rival submissions and perused the material on record. Admittedly, the addition of Rs.5 lakh has been made in the case of the assessee only on the basis of diary noting, statement of VP (Finance), RNSIL, and data retrieved by using forensic tools from seized computer server (data was deleted and the same was retrieved by using forensic tools). The assessee had contended that the details of seizure and the harsh value report were not available with the A.O. at the time of assessment. It was stated that the same was not made available to the ITA Nos.914 and 922/Bang/2024 assessee nor his representative. It was further submitted that the A.O. has not brought out any nexus between the payment of Rs.5 lakh with that of the assessee. One of the evidences which is purported against the assessee is an electronic record and the same is not collected in compliance with section 65-B of Indian Evidence Act r.w.s. 2(1)(t) of Information Technology Act and section 132(iib) of the I.T.Act. Any electronic record can only be considered as a piece of evidence which shall be as per section 65-B of the Indian Evidence Act and on complying the conditions enumerated u/s 65B(4) of the Indian Evidence Act. The above said principle has been settled by the Hon'ble Supreme Court in the case of (Anver P.V. v. P.K.Basheer and Ors. reported in (2014) 10 SCC 473. The diary noting, the statement of VP (Finance), RNSIL has not pointed out any payment to the assessee. The statement recorded on 16.02.2012 (date of search) was retracted by the VP (Finance) RNSIL on 07.03.2012 itself. The CIT(A) during the course of appellate proceedings had directed the A.O. to grant an opportunity of cross examination of VP (Finance) RNSIL and inspect the incriminating material. The VP (Finance) RNSIL during the course of cross examination had outrightly denied making any payment by him or RNSIL to the assessee. It was further submitted by him that the statement recorded on 16.02.2012 was under duress and he had taken up the matter with the DDIT (Investigation) Bangalore in his letter dated 07.03.2012. This fact is also admitted by the JCIT in her covering letter to the CIT(A) dated 25.10.2018, which is extracted below:-

7.3 In view of the aforesaid facts and the order of the Tribunal in the case of D.S. Suresh v. ACIT (supra), which is identical to the facts of the instant case, I delete the addition of Rs.5 lakh made by the Income Tax Authorities. It is ordered accordingly."

18. In the present case, the whole addition is made by the A.O. on the basis of the seized material procured from corporate office of M/s.RNS Infrastructure Ltd., at Naveen Complex, 7th Floor, 14 MG Road and at Murudeshwar Bhawan, 604-B, Gokul Road, Hubli marked as 22/A/RNSIL/2, dt.16.02.2012. This seized material shows certain sundry payments grouped under GE SUN 01 and GE SUN 03 and the sundry payments were made by cash. In these sundry payments, certain entries mentioned the name of the assessee and the corresponding payment to him. From this, the A.O. came to conclusion that the assessee being a Chief Minister, and Chairperson of the Karnataka Neeravari Nigam Ltd (KNNL) that had awarded the Upper Bhadra Project (UBP) contract to Murudeshwar Power Corporation Ltd. in 2008-09 to the tune of Rs.1033 Crores and KNNL is the subsidiary of RNSIL, in which case search was took placed and that payment was out of the book payment in connection with ITA Nos.914 and 922/Bang/2024 awarding of tender of UBP to KNNL by assessee being a Chief Minister of Karnataka and Chairperson of KNNL and made addition on this count to the tune of Rs.2,11,13,832/-. However, on examining the witness and cross- examination of parties, who denied such payment to the assessee, on that basis, the CIT(A) deleted the addition. The entire case of the department is based on the un-corroborated entries found in the computer server which were retrieved by using the forensic tools. These alleged documents collected by the department from the computers of M/s.RNS Infrastructure Ltd., cannot be described as evidence so as to fasten the tax liability on the present assessee. These are not maintained on day-to-day basis and not the part of the books of accounts maintained by M/s.RNS Infrastructure Ltd., there is no mention of the date on which the alleged payments were made. Even the A.O. not brought on record the dates of such payment, he presumed in wholesome manner that amount of Rs.2,11,13,832/- was the payment made to the present assessee during this assessment year. The payments are within the knowledge of the person, who written it. However, the said person denied the payment in the cross-examination and finally there is no evidence to suggest as to what they stand for and whom they referred to. Since the seized material is neither the regular books of account nor kept in the regular course of business of the assessee. They were not sufficient enough to fasten the liability on the present assessee, against whom they were sought to be used. The seized document collected by the department did not raise a reasonable ground to believe that there is a valid payment to the present assessee so as to award contract to the KNNL and the payment is relating to for awarding the contract of UBP. The seized material itself would not furnished evidences of the truth of their contents and that was not corroborated by any further evidence so as to hold that the assessee has actually received the said payment. In view of this, we are of the opinion that the order of the earlier Bench in the cases of Shri D.S.Suresh Vs. ACIT in ITA Nos.462 & 463/Bang/2020 (AYs.2009-10 & 2011-12), dt. 22.02.2021 and Shri D.V.Sadananda Gowda Vs. ACIT in ITA No.895/Bang/2019 (AY.2011-12), dt.30.03.2021, are squarely applicable to the present facts of the case and accordingly in view of the above discussion, we confirm the deletion of the addition made by the CIT(A). Hence, the grounds raised by the Revenue are dismissed.

ITA Nos.914 and 922/Bang/2024

(iii) Further in the case of Shri D.V. Sadananda Gowda in ITA No. 895/Bang/2019 the issue is considered by the Tribunal in order dated 30.03.2021 wherein it is held as under: -

"7. I have heard rival submissions and perused the material on record. Admittedly, the addition of Rs.5 lakh has been made in the case of the assessee only on the basis of diary noting, statement of VP (Finance), RNSIL, and data retrieved by using forensic tools from seized computer server (data was deleted and the same was retrieved by using forensic tools). The assessee had contended that the details of seizure and the harsh value report were not available with the A.O. at the time of assessment. It was stated that the same was not made available to the assessee nor his representative. It was further submitted that the A.O. has not brought out any nexus between the payment of Rs.5 lakh with that of the assessee. One of the evidences which is purported against the assessee is an electronic record and the same is not collected in compliance with section 65-B of Indian Evidence Act r.w.s. 2(1)(t) of Information Technology Act and section 132(iib) of the I.T.Act. Any electronic record can only be considered as a piece of evidence which shall be as per section 65-B of the Indian Evidence Act and on complying the conditions enumerated u/s 65B(4) of the Indian Evidence Act. The above said principle has been settled by the Hon'ble Supreme Court in the case of (Anver P.V. v. P.K.Basheer and Ors. reported in (2014) 10 SCC 473. The diary noting, the statement of VP (Finance), RNSIL has not pointed out any payment to the assessee. The statement recorded on 16.02.2012 (date of search) was retracted by the VP (Finance) RNSIL on 07.03.2012 itself. The CIT(A) during the course of appellate proceedings had directed the A.O. to grant an opportunity of cross examination of VP (Finance) RNSIL and inspect the incriminating material. The VP (Finance) RNSIL during the course of cross examination had outrightly denied making any payment by him or RNSIL to the assessee. It was further submitted by him that the statement recorded on 16.02.2012 was under duress and he had taken up the matter with the DDIT (Investigation) Bangalore in his letter dated 07.03.2012. This fact is also admitted by the JCIT in her covering letter to the CIT(A) dated 25.10.2018, which is extracted below:-

7.3 In view of the aforesaid facts and the order of the Tribunal in the case of D.S. Suresh v. ACIT (supra), which is identical to the facts of the instant case, I delete the addition of Rs.5 lakh made by the Income Tax Authorities. It is ordered accordingly."

18. In the present case, the whole addition is made by the A.O. on the basis of the seized material procured from corporate office of M/s.RNS Infrastructure Ltd., at Naveen Complex, 7th Floor, 14 MG Road and at Murudeshwar ITA Nos.914 and 922/Bang/2024 Bhawan, 604-B, Gokul Road, Hubli marked as 22/A/RNSIL/2, dt.16.02.2012. This seized material shows certain sundry payments grouped under GE SUN 01 and GE SUN 03 and the sundry payments were made by cash. In these sundry payments, certain entries mentioned the name of the assessee and the corresponding payment to him. From this, the A.O. came to conclusion that the assessee being a Chief Minister, and Chairperson of the Karnataka Neeravari Nigam Ltd (KNNL) that had awarded the Upper Bhadra Project (UBP) contract to Murudeshwar Power Corporation Ltd. in 2008-09 to the tune of Rs.1033 Crores and KNNL is the subsidiary of RNSIL, in which case search was took placed and that payment was out of the book payment in connection with awarding of tender of UBP to KNNL by assessee being a Chief Minister of Karnataka and Chairperson of KNNL and made addition on this count to the tune of Rs.2,11,13,832/-. However, on examining the witness and cross- examination of parties, who denied such payment to the assessee, on that basis, the CIT(A) deleted the addition. The entire case of the department is based on the un-corroborated entries found in the computer server which were retrieved by using the forensic tools. These alleged documents collected by the department from the computers of M/s.RNS Infrastructure Ltd., cannot be described as evidence so as to fasten the tax liability on the present assessee. These are not maintained on day-to-day basis and not the part of the books of accounts maintained by M/s.RNS Infrastructure Ltd., there is no mention of the date on which the alleged payments were made. Even the A.O. not brought on record the dates of such payment, he presumed in wholesome manner that amount of Rs.2,11,13,832/- was the payment made to the present assessee during this assessment year. The payments are within the knowledge of the person, who written it. However, the said person denied the payment in the cross-examination and finally there is no evidence to suggest as to what they stand for and whom they referred to. Since the seized material is neither the regular books of account nor kept in the regular course of business of the assessee. They were not sufficient enough to fasten the liability on the present assessee, against whom they were sought to be used. The seized document collected by the department did not raise a reasonable ground to believe that there is a valid payment to the present assessee so as to award contract to the KNNL and the payment is relating to for awarding the contract of UBP. The seized material itself would not furnished evidences of the truth of their contents and that was not corroborated by any further evidence so as to hold that the assessee has actually received the said payment. In view of this, we are of the opinion that the order of the earlier Bench in the cases of Shri D.S.Suresh Vs. ACIT in ITA Nos.462 & 463/Bang/2020 (AYs.2009-10 & 2011-12), dt. 22.02.2021 and Shri D.V.Sadananda Gowda Vs. ACIT in ITA No.895/Bang/2019 (AY.2011-12), dt.30.03.2021, are squarely applicable to the present facts of the case and accordingly in view of the above discussion, we confirm the deletion of the addition made by the CIT(A). Hence, the grounds raised by the Revenue are dismissed.