₹32 Cr Addition Fails: Section 153C Action Quashed in Sunetra Ajit Pawar Case

DCIT Vs Sunetra Ajit Pawar (ITAT Mumbai)

₹32 Cr Addition Fails – Loose Diaries & “DD” Code Not Enough for Section 153C Action: ITAT Mumbai in Sunetra Ajit Pawar case

In this high-stakes case, the ITAT Mumbai upheld the quashing of proceedings under Section 153C, where the Revenue attempted to tax alleged cash transactions of ₹32.14 crore based on entries in third-party seized diaries and digital data.

The entire case of the Department rested on interpreting the code “DD” appearing in handwritten diaries seized from a third party and linking it to the assessee through mobile contacts, WhatsApp chats, and Truecaller data. The Tribunal firmly rejected this approach, holding that no direct or reliable evidence existed to establish that “DD” referred to the assessee.

It was emphasized that:

• The seized material neither belonged to nor was found from the assessee
• The assessee’s name did not appear anywhere in the documents
• The author of the diary himself did not identify “DD” as the assessee
• Digital clues like phone contacts or Truecaller are weak, crowd-sourced, and not legally reliable evidence

The Tribunal further reiterated settled law that:

• Loose sheets, scribblings, and uncorroborated digital data cannot form the sole basis of addition
• Presumptions under Sections 132(4A) / 292C apply only to the person from whom documents are seized, not third parties
• Suspicion, however strong, cannot replace evidence

On jurisdiction, the ITAT held that the mandatory condition under Section 153C-clear nexus between seized material and assessee’s income—was not satisfied, rendering the entire proceedings void ab initio.

Final Outcome: