Addition cannot be made in the hands of the assessee solely on the basis of uncorroborated loose-sheet – ITAT
In a recent judgment, ITAT Surat has held that addition cannot be made in the hands of the assessee solely on the basis of uncorroborated loose-sheet.
ABCAUS Case Law Citation:
5133 (2026) (04) abacus.in ITAT
In the instant case, the assesse had challenged order passed by the CIT(A), National Faceless Appeal Centre (NFAC) in confirming addition on the basis of records found at searched person premises.
The appellant assessee was engaged in the real estate business and also ran a club. A search and seizure action was carried out in the case of a third person (the searched person), wherein a loose-slip was found, wherein, a sum of Rs. 1,000/- was mentioned against the Club.
The Assessing Officer presumed that the amount of Rs. 1,000/- represents Rs.1,00,000/- which was paid by searched person to the Club, which belonged to the assessee. He, therefore, made the impugned addition of Rs. 1 lakh into the income of the assessee as unaccounted receipts.
The ITAT observed that the assessee had totally denied of having received any amount of Rs. 1 lakh from the searched person. There was no statement recorded of of searched person, confirming the aforesaid payment to the assessee.
It was further noted that the impugned addition had been made solely on the basis of uncorroborated loose-sheet found from a third party, and did not bear any signature from any key person of the assessee.
The ITAT stated that it had been held, time and again, that the addition cannot be made in the hands of the assessee solely on the basis of uncorroborated loose-sheet, especially when there is no mention in the assessment order that the searched person had ever admitted such payment to the assessee.
Accordingly, the impugned addition was ordered to be deleted.
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