INCOME TAX ACT, 1961

Section 143(3) Section 147

Assessment - Additions to income - Additions made on account of allegation of CBI investing letter of credit (LOC) scam at FIR stage -

CBI alleged that assessee, Government Officer, along with others, entered into a criminal conspiracy with treasury officer, and dishonestly caused withdrawal from public exchequer against letter of credit (LOC) by preparing fake and false medicine bills. AO held that assessee received pecuniary benefit and his share of pecuniary benefit was estimated. Held: Assessee was not even made an accused by CBI while submitting offence/charge under section 173 of the Cr.PC and was not convicted also by Special Judge, CBI. Also taking note of corroborative evidence, which was certificate issued by Special Judge, CBI, showing that assessee was not proceeded against CBI or Special Court, therefore, there was no basis for addition. AO made addition only on basis of allegation on part of Investigative Agency, i.e., CBI investigating LOC scam at FIR stage where assessee's name also figured and that event made AO to saddle assessee with addition. Since foundation of addition was gone, addition could not be sustained.