Mandar Rawool Vs ITO (ITAT Pune)
Addition Based on Third-Party Loose Papers Set Aside: “Dumb Document” Cannot Justify Tax Demand
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition of ₹6,00,000 allegedly made as cash payment for purchase of a flat, holding that the entire addition was based solely on a third-party loose sheet seized during search, which was nothing but a “dumb document”.
The Tribunal noted that the impugned paper (Annexure-A6) seized from the premises of a builder group did not bear the assessee’s name, date, or clear particulars, and even the amount was not legible. Crucially, the original document was never produced either before the assessee or before the Tribunal; only a truncated scanned copy was relied upon by the Assessing Officer. Such selective reliance was held to be impermissible.
Further, the Tribunal observed that the statement of the builder’s promoter, relied upon by the Assessing Officer, did not specifically implicate the assessee, nor did it relate to the wing of the project in which the assessee had purchased the flat. No opportunity of cross-examination of the said person was provided, resulting in a serious violation of principles of natural justice.
An additional contradiction noted by the Tribunal was that the same alleged on-money was taxed in the hands of the builder in an earlier assessment year, while simultaneously being taxed in the hands of the assessee in a later year, which was legally untenable.
In the absence of independent corroborative evidence, and given that the addition rested entirely on an unreliable third-party loose paper, the ITAT directed deletion of the addition on merits. Other legal grounds were left unadjudicated.
FULL TEXT OF THE ORDER OF ITAT PUNE
