DCIT Vs Shally Thapar (ITAT Delhi)
Loose Sheet Found from Third Party Cannot Justify Section 69C Addition: ITAT Delhi Dismisses Revenue Appeals
The Delhi Bench of the ITAT dismissed four appeals filed by the Revenue and upheld the deletion of additions made under section 69C on account of alleged cash payment of interest by the assessee. The additions were based solely on a loose computation sheet found during search proceedings at the premises (car) of a third party.
The Tribunal held that no presumption under sections 132(4A) or 292C can be drawn against an assessee for documents seized from a third party. Both the assessee and the alleged lender categorically denied receipt or payment of any interest, and the Revenue failed to bring any corroborative evidence to establish actual payment of interest in cash. In the absence of supporting material, the addition was held to be merely notional and unsustainable in law. The ITAT affirmed that notional income or expenditure cannot be taxed under section 69C and found no infirmity in the order of the CIT(A) deleting the additions. Accordingly, all Revenue appeals were dismissed.
FULL TEXT OF THE ORDER OF ITAT DELHI
The above captioned four appeals are preferred by the Revenue against the order dated 18.06.2025, passed by Ld. CIT(A)-29, New Delhi u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as, “Act”).
