| The Tax Publishers2020 TaxPub(DT) 2137 (Pune-Trib) INCOME TAX ACT, 1961
Section 153C
It is not correct for AO to just rely on noting found on loose papers and make addition in the hands of assessee if there is no corroborative evidence or material substantiating to that effect.
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Search and seizure - Assessment under section 153C - Addition on the basis of some entries in books of third person as per noting found in loose papers -
AO received information from Investigation Wing on the basis of TEP (Tax Evasion petition). On the basis of that information, it was found that assessee received certain amount on transfer of tenancy rights as per noting found in some loose papers, which were seized in case of third party, wherein the name of the assessee was mentioned. Accordingly, the AO made addition in the hands of the assessee on account of amount received on transfer of tenancy rights. Assessee contended that the AO made addition simply on the basis of noting appearing in the loose papers, which was not at all corroborated by any other evidences. He further contended that the said documents did not contain his signature, thus, no addition could be made on the basis of such documents. Held: It was an undisputed fact that the addition was made as per TEP and noting found in loose papers, wherein the name of the assessee was mentioned and against the name of the assessee 1.87 was written but whether it was an amount in thousands, lakhs or crores, nothing was evident from that noting. However, the AO concluded it to be crores simply on basis of the business locality, which was not justified. Further, there was no signature of the assessee in those loose papers and Revenue could not bring any other corroborative evidences to substantiate the said noting in the loose papers. Further, it is a settled legal position that it is not correct for AO to just rely on noting found on loose papers and make addition in the hands of assessee if there is no corroborative evidence or material substantiating to that effect. Accordingly, the impugned addition was deleted.
REFERRED : Addl. CIT v. Miss Lata Mangeshkar (1974) 97 ITR 696 (Bom) : 1974 TaxPub(DT) 0224 (Bom-HC) and Pradeep Amrutlal Runwal v. Tax Recovery Officer (2014) 149 ITD 548 (Pune-Trib.) : (2014) 47 taxmann.com 293 (Pune-Trib.) : 2014 TaxPub(DT) 3387 (Pune-Trib).
FAVOUR : In assessee's favour.
A.Y. : 2007-08
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