The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that loose papers cannot be considered as admissible evidence for making an addition unless backed by independent corroborative material.
The bench of Yogesh Kumar U.S. (Judicial Member) and Brajesh Kumar Singh (Accountant Member) has observed that the loose sheet has been recovered from the searched person who is a third party, which bears no signature of either the Assessee or searched person and the same is not in the hand writing of either searched person or the Assessee. The searched person has specifically denied receiving any cash payment. In the absence of any corroborative material brought on record during the assessment proceedings, the Assessing Officer has committed error in making the addition based on the loose sheet.
A Search and seizure action was conducted in the case of Navneet Dawar & others Group by which residences and business premises of various persons including Navneet Dawar, Anil Narang, and Gurvinder Singh Duggalwere covered. A Search warrant of authorization was issued in the name of Gurvinder Singh Duggal. The premises of Gurvinder Singh Duggal were also covered during the search. During the search and seizure operation, certain documents/papers ‘belonging to the Assessee’ were found and seized or impounded from the premises.
The Assessee submitted that the seized document did not belong to the Assessee, nor does it bear the name or signature of the Assessee and the alleged seized document is not even in the hand writing of the Assessee or the handwriting of the search person. Gurvinder Singh Duggal has also denied receiving any cash payment. All the payments related to property transactions were made through banking channels and no cash transaction took place, thus, submitted that the addition made by the AO on the basis of loose unsigned paper found at the premises of a third party cannot be made basis for the addition without there being any corroborative evidence.
The court held that CIT(A) has erred in upholding the addition made by the AO Finding merits in the Grounds of Appeal of the Assessee, the addition of Rs. 30,00,000 made under section 69B of the Income Tax Act, which has been sustained by the CIT(A) is deleted.
Case Details
Case Title: Shyam Sunder Bang Versus ACIT
Case No.: ITA No. 1887/DEL/2023 (A.Y. 2016-17)
Date: 17/04/2025
Counsel For Appellant: Rohit Tiwari
Counsel For Respondent: Jaya Chaudhary
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