This ruling underscores the mandatory requirement for incriminating material to sustain additions in a Section 153C search assessment, leading to the deletion of a major bogus Long-Term Capital Gains (LTCG) addition. Furthermore, the ITAT confirmed that a partnership firm’s investment and income cannot be attributed to an individual partner, securing significant tax relief.
The ITAT upheld the deletion of a major protective tax addition against a firm, ruling it would result in double taxation. Evidence proved the corresponding income, found on seized loose papers, was personal to a partner and had already been declared and taxed in the partner’s individual return.
The ITAT ruled that seized parallel Tally data, reflecting higher sales and income, constitutes reliable incriminating material, validating assessments made under Section 153A. The tribunal sustained additions for higher gross profit and unexplained credits after the taxpayer failed to disprove the parallel records’ accuracy, reinforcing the presumption under Section 292C.
The ITAT ruled that CSR expenditure, though disallowed as a business expense, qualifies for deduction under Section 80G if paid to approved entities. The Tribunal directed the AO to verify the donations and allow the 80G claim, rejecting the argument that a mandatory statutory expense cannot be a donation.
