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Documents citing Common Cause (A Regd. Society) vs Union Of India on 9 March, 2018

R.K.Infracorp Private ... vs Dcit., Central Circle-2(4), Hyderabad on 25 February, 2026

43. We have given thoughtful consideration to the observations of the CIT(A) based on which he had vacated the addition of Rs. 1286.23 lakhs (supra) relating to the aforementioned 8 entries. In our view, as the AO had in his second "remand report" admitted that the 8 entries mentioning the nick name of the Director of the assessee company and his brother could not be found in the Tally Data and the books of accounts of the assessee company, therefore, as observed by the CIT(A), and rightly so, there could not have been any justification for the AO after conceding to the aforesaid factual position to have sustained the addition with respect to the aforementioned 8 entries. Also, we concur with the CIT(A) that as the AO had conceded in his "remand report" that the entries bearing nick 37 ITA No.235 & 363/Hyd/2025 R.K. INFRACORP PRIVATE LIMITED names of the Director of the assessee company and his brother could not be traced in the Tally Data/books of account of the assessee company, therefore, it is nothing short of admission by the AO that no corresponding bogus expenses were booked by the assessee company during the year under consideration. We thus, in terms of our aforesaid observations are persuaded to subscribe to the view taken by the CIT(A) that as the AO had no evidence before him which could reveal that the assessee company had booked any bogus expenditure during the year under consideration, therefore, there was no justification for him to make any addition/disallowance based on the unsubstantiated entries in the seized loose sheets, viz., Annexure A-1/Pages 01-02. Our aforesaid view is supported by the order of the Hon'ble Supreme Court in the case of Common Cause (Registered Society) Vs. Union of India (2017) 394 ITR 220 (SC), wherein it is held that loose sheets and random notings without corroborative evidence lack evidentiary value.
Income Tax Appellate Tribunal - Hyderabad Cites 17 - Cited by 0 - Full Document

Acit., Central Circle-2(4), Hyderabad vs R.K.Infracorp Private Limited, ... on 25 February, 2026

43. We have given thoughtful consideration to the observations of the CIT(A) based on which he had vacated the addition of Rs. 1286.23 lakhs (supra) relating to the aforementioned 8 entries. In our view, as the AO had in his second "remand report" admitted that the 8 entries mentioning the nick name of the Director of the assessee company and his brother could not be found in the Tally Data and the books of accounts of the assessee company, therefore, as observed by the CIT(A), and rightly so, there could not have been any justification for the AO after conceding to the aforesaid factual position to have sustained the addition with respect to the aforementioned 8 entries. Also, we concur with the CIT(A) that as the AO had conceded in his "remand report" that the entries bearing nick 37 ITA No.235 & 363/Hyd/2025 R.K. INFRACORP PRIVATE LIMITED names of the Director of the assessee company and his brother could not be traced in the Tally Data/books of account of the assessee company, therefore, it is nothing short of admission by the AO that no corresponding bogus expenses were booked by the assessee company during the year under consideration. We thus, in terms of our aforesaid observations are persuaded to subscribe to the view taken by the CIT(A) that as the AO had no evidence before him which could reveal that the assessee company had booked any bogus expenditure during the year under consideration, therefore, there was no justification for him to make any addition/disallowance based on the unsubstantiated entries in the seized loose sheets, viz., Annexure A-1/Pages 01-02. Our aforesaid view is supported by the order of the Hon'ble Supreme Court in the case of Common Cause (Registered Society) Vs. Union of India (2017) 394 ITR 220 (SC), wherein it is held that loose sheets and random notings without corroborative evidence lack evidentiary value.
Income Tax Appellate Tribunal - Hyderabad Cites 17 - Cited by 0 - Full Document

Y S Jagan Mohan Reddy,Kadapa vs Acit, Circle-2(1), Hyderabad on 12 February, 2025

A similar view has been taken by the Hon'ble Supreme Court in the case of Common Cause (A registered Society Vs. UOI (2017) 394 ITR 220 (SC), where, it has been held that search material found in any search do not have any evidentiary value and the transactions recorded in such papers etc. would have to be corroborated by independent evidence to proceed against the person, whose names appear as beneficiaries in such documents. In the present case, the entire addition hinges on evidence gathered from third party document, without any corroborative evidence to suggest that in the so-called documents that have been found and account by name Shri J Reddy or JR as the assessee and the assessee is beneficiary of whatever amount recorded therein. It is also pertinent to note that although the Assessing Officer claimed that the pen drive was found in the possession of an employee,subsequently those employees have denied allegation of the Assessing Officer and stated that no such pen drive was found during the course 24 ITA No.670/Hyd/2022 & CO No.1/Hyd/2023 Y.S.Jagan Mohan Reddy of search. Even Mr. Puneet Dalmia, Managing Director of Dalmia group also denied having knowledge of any pen drive found in the possession of employee and contents recorded therein. Therefore, the presumption with regard to contents of documents has been drawn against the assessee, without there being any corroborative evidence to link such documents to the assessee. In our considered view, if at all any presumption can be drawn on such documents, then the same can be drawn against Dalmia group and the onus shall be on the Dalmia group to produce cogent material to rebut presumption u/s 132(4A). The Dalmia group never alleged that the transactions belong to the assessee. As discussed earlier, even in the statements recorded from the employees at different stages and different period before different authorities did not implicate the assessee by any manner whatsoever. Therefore, we are of the considered view that the additions made by the Assessing Officer on the basis of third-party evidence, without providing this evidence to the assessee and allowing cross examination is contrary to law and settled position. Since the Assessing Officer failed to bring on record any evidence in contrary to allege that the assessee is beneficiary of contents recorded in the documents found in the pen drive seized from the employees of Dalmia group, in our considered view, no additions can be made merely on the basis of presumption that the assessee may be beneficiary of the said document by bringing the theory of 'quid pro quo', without any evidence to 25 ITA No.670/Hyd/2022 & CO No.1/Hyd/2023 Y.S.Jagan Mohan Reddy support the allegation of 'quid pro quo' theory . As noted in earlier paragraphs, the assessee was not holding any official position at relevant point of time, to influence any person for favoring or benefit to the Dalmia group and therefore, in the absence of any evidence to the contrary, it cannot be alleged that these transaction is part of quid pro quo and whatever consideration received by third party for sale of shares of a company can be assessed in the hands of the assessee as income u/s 56(1)(vii) of the Act.
Income Tax Appellate Tribunal - Hyderabad Cites 112 - Cited by 0 - Full Document

Acit, Circle-2(1), Hyderabad vs Y S Jagan Mohan Reddy, Kadapa on 12 February, 2025

A similar view has been taken by the Hon'ble Supreme Court in the case of Common Cause (A registered Society Vs. UOI (2017) 394 ITR 220 (SC), where, it has been held that search material found in any search do not have any evidentiary value and the transactions recorded in such papers etc. would have to be corroborated by independent evidence to proceed against the person, whose names appear as beneficiaries in such documents. In the present case, the entire addition hinges on evidence gathered from third party document, without any corroborative evidence to suggest that in the so-called documents that have been found and account by name Shri J Reddy or JR as the assessee and the assessee is beneficiary of whatever amount recorded therein. It is also pertinent to note that although the Assessing Officer claimed that the pen drive was found in the possession of an employee,subsequently those employees have denied allegation of the Assessing Officer and stated that no such pen drive was found during the course 24 ITA No.670/Hyd/2022 & CO No.1/Hyd/2023 Y.S.Jagan Mohan Reddy of search. Even Mr. Puneet Dalmia, Managing Director of Dalmia group also denied having knowledge of any pen drive found in the possession of employee and contents recorded therein. Therefore, the presumption with regard to contents of documents has been drawn against the assessee, without there being any corroborative evidence to link such documents to the assessee. In our considered view, if at all any presumption can be drawn on such documents, then the same can be drawn against Dalmia group and the onus shall be on the Dalmia group to produce cogent material to rebut presumption u/s 132(4A). The Dalmia group never alleged that the transactions belong to the assessee. As discussed earlier, even in the statements recorded from the employees at different stages and different period before different authorities did not implicate the assessee by any manner whatsoever. Therefore, we are of the considered view that the additions made by the Assessing Officer on the basis of third-party evidence, without providing this evidence to the assessee and allowing cross examination is contrary to law and settled position. Since the Assessing Officer failed to bring on record any evidence in contrary to allege that the assessee is beneficiary of contents recorded in the documents found in the pen drive seized from the employees of Dalmia group, in our considered view, no additions can be made merely on the basis of presumption that the assessee may be beneficiary of the said document by bringing the theory of 'quid pro quo', without any evidence to 25 ITA No.670/Hyd/2022 & CO No.1/Hyd/2023 Y.S.Jagan Mohan Reddy support the allegation of 'quid pro quo' theory . As noted in earlier paragraphs, the assessee was not holding any official position at relevant point of time, to influence any person for favoring or benefit to the Dalmia group and therefore, in the absence of any evidence to the contrary, it cannot be alleged that these transaction is part of quid pro quo and whatever consideration received by third party for sale of shares of a company can be assessed in the hands of the assessee as income u/s 56(1)(vii) of the Act.
Income Tax Appellate Tribunal - Hyderabad Cites 112 - Cited by 0 - Full Document

Ram Mohana Reddy Baddigam,Guntur vs Dcit., Central Circle-3(4), Hyderabad on 30 June, 2025

The Learned Counsel for the Assessee further drew the attention of the Bench decision of Hon'ble Supreme Court in the case of Common Cause (A Registered Society) vs., Union of India [2017] 394 ITR 220 (SC) on identical circumstances wherein the Hon'ble Apex Court held that, investigation could not have been directed on the basis of legally inadmissible evidence in form of 'loose papers' and make addition u/sec.69A of the Act. Learned Counsel for the Assessee further relied on the following decisions in support of the above contentions :
Income Tax Appellate Tribunal - Hyderabad Cites 21 - Cited by 0 - Full Document

Ram Mohana Reddy Baddigam,Guntur vs Dcit., Central Circle-3(4), Hyderabad on 30 June, 2025

The Learned Counsel for the Assessee further drew the attention of the Bench decision of Hon'ble Supreme Court in the case of Common Cause (A Registered Society) vs., Union of India [2017] 394 ITR 220 (SC) on identical circumstances wherein the Hon'ble Apex Court held that, investigation could not have been directed on the basis of legally inadmissible evidence in form of 'loose papers' and make addition u/sec.69A of the Act. Learned Counsel for the Assessee further relied on the following decisions in support of the above contentions :
Income Tax Appellate Tribunal - Hyderabad Cites 21 - Cited by 0 - Full Document

Ram Mohana Reddy Baddigam,Hyderabad vs Dcit., Central Circle-3(4), Hyderabad on 30 June, 2025

The Learned Counsel for the Assessee further drew the attention of the Bench decision of Hon'ble Supreme Court in the case of Common Cause (A Registered Society) vs., Union of India [2017] 394 ITR 220 (SC) on identical circumstances wherein the Hon'ble Apex Court held that, investigation could not have been directed on the basis of legally inadmissible evidence in form of 'loose papers' and make addition u/sec.69A of the Act. Learned Counsel for the Assessee further relied on the following decisions in support of the above contentions :
Income Tax Appellate Tribunal - Hyderabad Cites 21 - Cited by 0 - Full Document

Ram Mohana Reddy Baddigam,Hyderabad vs Dcit., Central Circle-3(4), Hyderabad on 30 June, 2025

The Learned Counsel for the Assessee further drew the attention of the Bench decision of Hon'ble Supreme Court in the case of Common Cause (A Registered Society) vs., Union of India [2017] 394 ITR 220 (SC) on identical circumstances wherein the Hon'ble Apex Court held that, investigation could not have been directed on the basis of legally inadmissible evidence in form of 'loose papers' and make addition u/sec.69A of the Act. Learned Counsel for the Assessee further relied on the following decisions in support of the above contentions :
Income Tax Appellate Tribunal - Hyderabad Cites 21 - Cited by 0 - Full Document
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