ITAT Jaipur Deletes Cash Additions on Telescoping & “Dumb Document” Evidence

Gopal Lal Gupta Kalani & Co. LLP Vs DCIT (ITAT Jaipur)

The Jaipur ITAT allowed the assessee’s appeal against the order of the CIT(A), Udaipur-02 dated 29.10.2025. The assessee, engaged in purchase and sale of utensils through M/s Gopal Bartan Bhandar, was subjected to survey under Section 133A on 23.11.2017. The return declared total income of Rs.3,86,360, while assessment under Section 143(3) determined total income at Rs.28,93,810 after additions of Rs.9,55,444 for unexplained excess cash and Rs.15,52,000 for alleged unexplained cash loans. The CIT(A) restricted the excess-cash addition to Rs.8,67,573 and confirmed the Rs.15.52 lakh addition.

Regarding the excess cash, Rs.9,58,790 was found during survey. The assessee explained that the excess cash represented cash generated from unrecorded sales corresponding to short stock of Rs.8,64,872, with gross profit of Rs.87,871 at the declared rate of 10.16%, resulting in total unrecorded sales of Rs.9,52,743. The CIT(A) accepted that the short stock represented unrecorded sales but allowed telescoping only to the extent of the gross profit component and sustained Rs.8,67,573 as unexplained. The ITAT held that the entire unrecorded sales were admittedly made in cash and the excess cash found was Rs.9,55,444. It found no evidence of corresponding payment for purchases of the unrecorded sales and no reason for restricting telescoping to the profit element. The Tribunal therefore allowed telescoping of the entire unrecorded sales and deleted the Rs.8,67,573 addition.

The second issue concerned Rs.15,52,000 allegedly advanced as cash loans to various persons. A notepad/diary comprising Annexure A-7, pages 1 to 8, contained names and amounts. The assessee disputed that the entries represented loans, pointing out that the document contained no dates, addresses, details of cash advances, name of the assessee, repayment details or security particulars. The assessee also contended that the pages were written by the assessee’s son, Rahul Goyal, in the same handwriting and ink and alleged that they had been prepared during the survey. A forensic examination was requested but was not conducted. The CIT(A), however, upheld the addition under Section 69 read with Section 115BBE, relying upon the impounded document and the statement recorded during survey.

The ITAT found merit in the assessee’s challenge. It held that the diary contained only names and figures and did not disclose that the assessee had advanced loans, nor did it specify the nature or date of any transaction. The Tribunal treated the document as a “dumb document” and held that it was insufficient evidence for making the addition. It further observed that once the assessee challenged the veracity of the diary and alleged that it had been prepared during the survey, the Revenue authorities ought to have examined that contention. The AO’s failure to investigate the requested forensic examination lent credence to the assessee’s contention, while the CIT(A) had not addressed the veracity of the diary itself. Accordingly, the ITAT deleted the Rs.15.52 lakh addition.

The Tribunal consequently allowed both grounds of appeal and allowed the assessee’s appeal in entirety. The order was pronounced on 07.07.2026.

FULL TEXT OF THE ORDER OF ITAT JAIPUR

The present appeal has been filed by the assessee against the order passed by the Office of the Commissioner of Income Tax, Appeal CIT(A), Udaipur-02 (hereinafter referred to as “Ld. CIT(A)”), dated 29.10.2025 u/s 250 of the Income Tax Act, 1961,(hereinafter referred to as “the Act”).

2. The grounds of appeal raised by the assessee reads as under:-

1. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.8,67,573/- (9,55,444-87,871) u/s 69A of the Act on account of unexplained excess cash even when it is accepted that short stock of Rs.8,64,872/- is arising due to unrecorded sales of such stock and thereby directing the AO to accept the source of cash only upto the g.p. amount of Rs.87,871/- instead of directing the AO to accept the source of cash as out of unrecorded sales of Rs.9,52,743/-(8,64,872+87,871).

2. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs. 15,52,000/- made by AO u/s 69 of the Act on account of alleged unexplained cash loan given to various persons by not appreciating that notepad Annexure A7, Pg 1-8 on which amount of alleged advances are noted were prepared at the time of survey on which surrender was sought which stands retracted within 10 days and otherwise also no evidence was found in survey that assessee has made alleged advances.

3. The appellant craves to alter, amend and modify any ground of appeal.

4. Necessary cost be awarded to the assessee.

3. Brief facts relating to the case are that the assessee is an individual having income from purchase and sale of utensils carried on in his proprietorship concern by the name M/s Gopal Bartan Bhandar, Hindon City. During the impugned year survey action u/s 133A of the Act was conducted on the assessee on 23.11.2017 .The assessee filed return u/s 139 of the Act declaring total income of Rs.3,86,360/-. Subsequently assessment was framed u/s 143(3) of the Act by the AO assessing the total income at Rs.28,93,810/- after making addition of Rs.9,55,444/- on account of unexplained excess cash and of Rs.15,52,000/- on account of unexplained cash loans.

4. The Ld. CIT(A) restricted the addition made on account of unexplained cash to the extent of Rs.8,67,573/-, while the addition on account of unexplained cash loans of Rs.15.52 lakhs was confirmed by him, thus partly allowing the assessee’s appeal.

5. Aggrieved by the same the assessee has come up in appeal before me.

6. In ground No.1, the assessee has challenged the confirmation of addition on account of unexplained cash to the tune of Rs.8,67,573/-. The facts relating to the issue are that during survey proceedings at the assesses business premises cash of Rs.9,58,790/- was found .Statement of Sh. Rahul Goyal, son of the assessee, was recorded who stated cash of Rs. 7 to 8 thousand as available in the cash box, and the remaining cash of Rs.9,50,790/- was stated to relate to his unrecorded cash sales . The said amount was accordingly offered as undisclosed income during the survey action. The assessee however, did not include this undisclosed income in the total income returned for taxation in the ITR filed. During assessment proceedings, the assessee contended that the cash found and surrendered during survey was attributable to the stock sold out of the books of the assessee. The assessee contended that the short stock found during survey to the tune of Rs.8,64,872/-represented the sales made out of the books of the assessee and adding GP at the rate declared by the assessee of 10.16% amounting to Rs.87,871/- total sale effect came to Rs.9,52,743/- which adequately explained the excess cash found with the assessee. The AO rejected this explanation of the assessee. However, the Ld. CIT(A) found merit in the contention of the assessee, but at the same time he allowed benefit for the explanation of excess cash found only to the extent of the gross profit element in the stock sold out of the books of the assessee/the unrecorded sales of the assessee i.e. to the extent of Rs.87,871/-.He accordingly, directed restriction of addition of excess cash found to the tune of Rs.8,67,573/-.

7. Counsel for the assessee argument before me was that the Ld. CIT(A) was grossly unjustified in not allowing the benefit of telescoping of the entire unrecorded sales made by the assessee to the excess cash found .He contended that the Ld. CIT(A) having acknowledged the fact that unrecorded sales were made by the assessee, the assessee was eligible to the entire benefit of the cash sales made and the same ought not to have been restricted to the extent the gross profit element in the same, that too for no reason at all.

8. DR however, relied on the findings of the Ld. CIT(A) contained at para 6.3.3 of his order as under:-

6.3.3 The appellant emphasized the short stock of Rs. 8,64,872/- identified during the survey (books vs. physical), claiming it represented unrecorded sales generating cash equivalent to the cost plus GP (approx. 10.50%, aligning with the excess cash) It was argued that the AO failed to consider this source and made no adjustment for the short stock in the assessment.

The core issue is whether the excess cash of Rs. 9,55,444/- found during the survey is unexplained or can be attributed to unrecorded sales from short stock, as claimed.

During the survey, no regular books were produced, leading to the initial surrender. However, in assessment and appellate proceedings, the appellant has consistently explained the discrepancy through a trading account showing short stock of Rs. 8,64,872/- The physical stock being lower than the book stock suggests possible unrecorded sales, which could generate additional cash. The appellant has computed GP at 10.16% on this short stock amount, arriving at Rs. 87,871/- as profit from such unrecorded sales.

The appellant’s explanation to the limited extent of the GP element. The short stock of Rs. 8,64,872/- is accepted as arising from unrecorded sales, and no separate addition is warranted on account of the stock discrepancy itself. Accordingly, the GP of Rs. 87,871/-is to be added to the appellant’s total income as business income from undisclosed sales, taxable at normal rates (without invoking section 115BBE).

However, the explanation for the source of the cash is acceptable only up to this GP amount of Rs. 87,871/-. The remaining amount, i.e., Rs. 8,67,573/- (Rs. 9,55,444/- minus Rs. 87,871/-, adjusting for minor computational differences aligning with the short stock value of Rs. 8,64,872/4 remains unexplained. The appellant has failed to furnish satisfactory evidence, such as quantity-wise stock details, purchase/sale vouchers, or other corroborative documents, to fully link the entire excess cash to business activities. In the absence of such evidence, this remaining amount is treated as unexplained credit u/s 68 of the Act and is added to the total income. Tax on this addition shall be levied as per the provisions of section 115BBE of the Act.

The sub-ground regarding inapplicability of sections 69/69A and 115BBE is partly allowed to the extent of the GP component (Rs. 87,871/-), as it pertains to business income. However, for the remaining unexplained credit (Rs. 8,67,573/-), the provisions of section 115BBE apply, as the amount does not qualify as regular business income.

Accordingly, this ground of appeal is treated as partly allowed.

9. I have heard the contention of both the parties. I find merit in the contention of ld. Counsel for the assessee that the assessee ought to have been given the benefit of telescoping of the admitted unrecorded sales made by the assessee to the excess cash found with him during survey. It is fact on that record short stock of Rs.8,64,872/- was identified during survey ,representing unrecorded sales. This fact is recorded in the Ld. CIT(A)s order also wherein after noting the fact of short stock representing unrecorded sales, he has given the benefit of the gross profit element embedded in the same to the assessee for the excess cash found. As per the Ld. CIT(A) the total value of the unrecorded sales was Rs.9,55,444/- ,being Rs.8,64,872/-+gross profit of Rs.87,871/-. The entire amount admittedly was collected in cash. The excess cash found with the assessee is of Rs.9,55,444/-. The entire unrecorded sales being made in cash, the said amount of cash clearly was available with the assessee and I find no reason why the benefit of telescoping should be restricted only to the extent of gross profit element therein. The Revenue has not found any evidence of corresponding payment having been made by the assessee for the purchase of the unrecorded sales made by the assessee. The Ld.CIT(A) also I note has given no reason for restricting the benefit of telescoping only to the extent of profit element embedded in the unrecorded cash sales.

10. In the light of the same, I hold, that the assessee is entitled to claim the benefit of telescoping for the entire unrecorded sales made .I accordingly, hold the addition made on account of excess cash found during survey, restricted by the Ld. CIT(A) to the extent of Rs.8,67,573/- to be not justified and delete the same..

11. Ground of appeal No.1 is allowed.

12. Ground of appeal No.2 relates to the addition on account of alleged unexplained cash loans given by the assessee to various persons amounting to Rs.15,52,000/-.

13. The facts of the case are that, a notepad annexurized as Annexure A-7 page 1 to 8 ,was found during survey as per which the assessee was noted to have given cash loans to various persons of Rs.15,52,000/-during the impugned year. The same were offered during survey as undisclosed income but was nondisclosed in the return of income filed by the assessee. During assessment the assessee retracted the surrendered income, claiming that the entries in the diary were not genuine and had no relevance to any loan transaction undertaken by the assessee. However, since no documentary evidence in support of his retraction was filed the AO added the entire amount of Rs.15,52,000/- to the total income of the assessee as unexplained/unaccounted cash loan given by the assessee. The same was confirmed by the Ld. CIT(A).

14. The contention of the ld. Counsel for the assessee before me was that in no way the entry in the diary could be said to reveal loan given by the assessee to some other persons since no such fact was recorded in the diary He pointed out that there was no mention of any cash or any other amount in the diary, there was no mention of the name of the assessee in the diary, there was no mention of any date or of the year in the diary nor was there any mention of cash given ,in the diary. That the diary only mentioned name and amount. No address of the persons was also mentioned. He contended that all the pages of the diary were in the same handwriting of the son of the assessee with the same pen and ink and entering name and amount in single sitting. That the assessee had requested the AO to refer the diary pages for forensic test, but the AO did not do so. He drew my attention to the submissions in this regard before the Ld. CIT(A), contained at para 7.2 of his order which reads as under:-

7.2 The A/R of the appellant filed written submissions vide letter dated on 22.03.2025 during the appellate proceedings. The same is reproduced as under:

“Response to above detailed ground and sub ground is summarized that eight pages of diary by name “Shikha TM” on which bogus entries are appearing (Annexure Al to A8) has the following names and amount:

From the eight pages of the diary (annexure Al to A8), your honor will find the following controversies:

(1) Most of the names are in short like Dabbu, Vishnu, Pappu, Raju, Mahesh, Shyam etc. Against all the names neither address is appearing nor phone number(s) whereas the fact is, virtually everybody owns mobile number, even in villages every persons even the ladies are using mobile phones;

(2) The so called diary papers are in the handwriting of Appellant’s son Mr. Rahul Goyal who is assisting in his father’s business. These pages in no case could be termed as loan from the Appellant more so when anywhere in diary there is no mention of name of the Appellant.

(3) Foremost important issue is that all the eight pages are written in same handwriting of Mr. Rahul, same pen/ink and entered such name and amount in single sitting. This fact alone proves that survey Team forced Mr. Rahul to make such bogus entries;

(4) When requested to the Id. AO by letter dated 23.01.2021 to refer the diary pages for forensic test whether entries made in single sitting, Id. AO preferred to keep silent on this issue.

(5) In not a single case, either at the instruction of survey team or by the Id. AO himself action under section. 269SS of income tax Act for cash loans was initiated so to levy of penalty under section 271D of Income tax Act as there are as much as twenty one persons written as debtors who have taken cash loans. The apparent reason for it is that the Department knew the fact that these are bogus entries made in a diary at the instruction of the Survey Team by the son of proprietor so to make additions under sec 69 of Income tax Act and the addition so made is to be taxed at higher rate under section 115BBE of Income tax Act with surcharge

(6) No date of return of money was found to have been mentioned along with name of person who are said to have been given money as per table at page (4) above.

(7) Without prejudice to above, in none of so called names and amount of money, date of advancing loan was found, nor date of return of money nor any security was found therefore, Id. AO was not justified in making addition of total of these so called debtors in Appellant’s hand and that too in period relevant to A.Y. 2018-19

(8) Whether the amount of so called advances was without interest or interest bearing loans?

When these bogus names, without address on any of the total twenty one persons where neither date of advancing amount nor date of return nor name of the Appellant is appearing anywhere nor it is in the handwriting of the Appellant, these eight pages are in fact dumb documents, which cannot be legally enforced under the law”

15. He also drew my attention to the letter written to the AO seeking forensic test of the diary dated 23.01.2021 placed before me at paper book page No.34 to 36. He therefore contended that there was no basis at all for making any addition in the hands of the assessee on account of the alleged notes in the diary seized.

16. Ld. DR however, relied on the findings of the Ld. CIT(A) at para 7.3.2. to 7.3.8 of his order as under:-

7.3.2 The appellant argued that the names are in short like Dabbu, Vishnu, Pappu, Raju, Mahesh, Shyam elc Address and phone number(s) is not appearing

This argument of the appellant is not found to be acceptable. The notings are made by the assessee or its representative as per their choice. Whether the name is to be written in short or full name is to be written it is the discretion of the assessee. The notings with or without address, with or without phone number is of no relevance when the assessee accepted that these were the persons to whom loans were given. These persons must be known to the assessee to whom cash loans were given. Therefore, the claim that phone numbers and address is not mentioned in the note book is not found to be relevant.

7.3.3 It is stated that the so called diary papers are in the handwriting of Appellant’s son Mr. Rahul Goyal who is assisting in his father’s business. These pages in no case could be termed as loan from the Appellant more so when anywhere in diary there is no mention of name of the Appellant

From the reply it is evident that the handwriting is identified by the assessee. It is also accepted that son of the assessee was also assisting the assessee in his financial affairs. Therefore, surrender during the survey is found to be correct as the son of the assessee is in knowledge of the financial affairs of the assessee and he has made these notings on the note book on behalf of the assessee. The assessee has not proved that his son was having any other source of income which is already declared in the return of income by his son and the source of the cash loans was from such income earned by his son. In the absence of any such supporting evidences furnished by the assessee, the reliance by the AO on impounded documents is found to be justified for making addition.

7.3.4 The appellant stated that all the eight pages are written in same handwriting of Mr. Rahul, same pen/ink and entered such name and amount in single sitting. This fact alone proves that survey Team forced Mr. Rahul to make such bogus entries The claim of the appellant is considered but not found to be acceptable. Only because the entries made in the note book are in same handwriting and in same ink do not prove that the entries are made in a single day. The handwriting will remain same if the same person is writing even on different days. The ink will remain same if a particular type of pen like Gel Pen or ball pen is used or the pen is of the same brand. These arguments do not prove that survey team forced Mr. Rahul to makesuch bogus entries. The claim made by the assessee in this regard is therefore not found to be acceptable.

7.3.5 it is argued that request was made to refer the diary pages for forensic test whether entries made in single sitting, Id. AO preferred to keep silent on this issue.

The arguments of the appellant in this regard are not found to be relevant with the issue at hand. The AO has not claimed that the entry in the note book was made on single day or on different days. Hence the entry were made in single sitting or multiple sittings has no relevance with the issue. Even if it is proved that the entries were made in the single sitting, the addition made by the AO is still justified as the source of these cash loans advanced in single day remain unexplained.

The penalty proceedings (u/s 269SS etc.) are independent proceedings from the assessment of income. Initiating penalty or not initiating of penalty depends on the facts of the case considered by the AO and the Addl. CIT. It is observed that complete identity of these persons is not disclosed by the assessee before the AO. In the absence of full details, the AO might have faced difficulty in initiating penalty. However, by not providing the details the appellant cannot be allowed to say that because such penalty is not initiated the source of the cash loans should not be examined. The source of such loans remain in explained. The arguments of the appellant in this regard are not found to be acceptable

7.3.6 It is argued that no date of return of money was found to have been mentioned along with name of person who are said to have been given money

The assessee is asking for information from the AO which is in exclusive knowledge of the assessee. The AO cannot provide information which is not written on the impounded documents unless the same is provided by the assessee. The assessee might have recorded these details at some place which was not disclosed to the department. It is possible that the assessee might have remembered these details. Hence, only because dates of return is not mentioned the transactions cannot be treated as bogus when these transactions are found to be recorded in impounded documents.

7.3.7 It is argued that date of advancing loan and date of return of money, security was not found therefore, Id AO was not justified in making addition of total of these so called debtors in Appellant’s hand and that too in period relevant to A. Y 2018-19.

It is observed that the year of giving advance is admitted to be current year No such evidence is furnished to prove that the advances were given in year different from current year. Therefore, there remains no dispute with regard to year of advance given. The other details are in exclusive knowledge and discretion of the assessee. The AO cannot be expected to prove things which are not found in the impounded documents. However, if the appellant is willing to make a claim with regard to date of advance & return and security etc. the same should have been placed before the AO with verifiable evidences. However, no such evidence is furnished by the appellant. In the absence of any contrary evidence brought on record, the reliance placed by the AO on the impounded documents duly supported by statement recorded during survey is found to be justified.

7.3.8 It is argued that Whether the amount of so called advances was without interest or interest bearing loans.

The assessee is again arguing on the facts which should have been brought on record by the assessee before the AO because these are in exclusive knowledge of the assessee. The assessee cannot argue that because interest rate is not recorded on these documents, hence these entries are bogus. The cash loans may be interest bearing but no interest rate was mentioned on the impounded documents. Therefore, the AO has not made any addition with regard to earning of interest on such advances. This is realistic and reasonable approach of the AO. Therefore, the arguments in this regard are not found to be helping the case of the assessee with regard to addition made by the AO.

In view of above discussion, the addition made by the AO with regard to cash loans advanced by the assessee are not found to be acceptable.

The unexplained advances are nowhere related to business activity. Therefore, the claim made by the assessee cannot be accepted without bringing the evidences on record.

During the survey, the assessee admitted that the loans were given to the various persons in cash. This income was surrendered in addition to the regular income of the assessee. It was also accepted that these were not recorded in regular books of accounts of the assessee.

The cash loans were not the business activity of the assessee. The loans are not proved to be related to business. It is held that both of these were not made for the purpose of business and not linked to the business.

In the assessment proceedings or during the appellate proceedings, the assessee failed to provide any details and documentary evidence to establish that the source of investment in cash loans was income earned from its business.

The source of the investment in the advances is in exclusive knowledge of the assessee. The AO cannot be expected to prove which is in exclusive knowledge of the assessee.

In view of clear failure on the part of the assessee to explain the source of the advances made by the assessee, the addition made by the AO on account of unexplained advances is found to be justified and upheld.

Charging of Tax u/s 115BBE

The section 115BBE is charging section. The Income Tax Act is a self contained code consists of both charging and machinery sections. Charging sections are those sections by which liability is created or fixed. Machinery sections are those sections which ensure quantification, imposition and collection of tax created by the ‘charging sections’. Thus Machinery Provisions’ are basically subordinate to the charging section. On applying the above principles, section 115BBE is categorized as ‘machinery provision’ which is subordinate to the charging sections 68 and section 69 family. There is a very practical rule in the interpretation of taxing Statutes that ‘charging provisions’ are interpreted strictly while the ‘machinery provisions’ are interpreted liberally.

The above criteria of interpretation of the ‘Statute’ is supported by several judicial precedents.

Some land mark judicial precedents are as under

• K Synthetics Ltd. v. CTO 1994 taxmann.com 370 (SC).
• Gurshai Saigal v. CIT [1963] 48 ITR 1 (SC).
• India United Mills Ltd. v. CEPT [1955] 27 ITR 20 (SC).
• CIT v. Mahaliram Ramjidas [1940] 8 ITR 442 (PC).

The Honible Supreme Court in the case of J.K. Synthetics Ltd. (supra) held asunder

“It is well-known that when a statute levies a tax it does so by inserting acharging section by which a liability is created or fixed and then proceeds to provide the machinery to make the liability effective. It, therefore, provides the machinery for the assessment of the liability already fixed by the charging section, and then provides the mode for the recovery and collection of tax, including penal provisions meant to deal with defaulters Ordinarily the charging section which fixes the liability is strictly construed but that rule of strict construction is not extended to the machinery provisions which are construed like any other statute. The machinery provisions must, no doubt, be so construed as would effectuate the object and purpose of the statute and not defeat the same (Whitney v. Commissioners of Inland Revenue 1926 A C 37, CIT v. Mahaliram Ramjidas [1940] 8 ITR 42 (PC), Indian United Mills Ltd. v. Commissioner of Excess Profits Tax, Bombay, [1995] 27 ITR 20 (SC) and Gursahai Saigal v. CIT, Punjab, [1963] 48 ITR 1 (SC).”

The Hon’ble Supreme Court in the case of Gursahai Saigal (supra) held asunder:

“Those sections which impose the charge or levy should be strictly construed, but those which deal merely with the machinery of assessment and collection should not be subjected to a rigorous construction but should be construed in a way that makes the machinery workable.”

The Honible Supreme Court in the case of ‘India United Mills Ltd. (supra) applied the principles laid down by the Privy Council in the case of ‘Mahaliram Ramjidas (supra)’ held as under

“Ordinarily, the charging section which fixes liability is strictly construed but the rule of strict construction is not extended to the machinery provisions which are construed like any other statute. The machinery provision must, no doubt, be so construed as would effectuate the object and purpose of the Statute and not to defeat the same.”

In view of above discussion, when the addition is made in sections 68 and section 69 family. If the addition is made under these sections, the tax has to be charged as per provisions of section 115BBE. The charging of tax as per provisions of section 115BBE is automatic.

Sub-section (2) of section 115BBE of the Income-tax Act, 1961 (Act) provides that where total income of an assessee includes any income referred to in section(s) 68/69/69A/698/69C/69D of the Act, no deduction in respect of any expenditure or allowance or set off of any loss shall be allowed to the assessee under any provisions of the Act in computing the income referred to in section 115BBE (1) of the Act.

In view of the above discussion, the addition made by the AO on account of unexplained advances amounting Rs. 15, 52,000/- u/s 69 r. w.s. 115BBE of the Act is found to be justified and upheld.

This ground of appeal is treated as dismissed.

17. I have heard the contentions of both the parties and I find merit in the contention of the Ld. Counsel for the assessee that there was no basis at all for holding that the assessee had made cash advances to the tune of Rs.15,52,000/- during the impugned year on the basis of notings in the diary seized during survey. The assessee has fairly demonstrated before me that the contents of the diary did not reveal any fact of the assessee having advanced any loans to the persons mentioned in the list. The list only contains the names of the persons and some figure against it. The nature of transaction finds no mention in the diary. The diary also does not mention the date on which the transaction, if any taken place. The diary therefore, I hold, constitutes a dumb document and is not evidence sufficient enough for making any addition in the hands of the assessee on account of cash loans advanced .This is further strengthened by the fact that the assessee had pleaded that the diary was made at the instance of the survey team by the son of the assessee during survey itself recording all the names in his handwriting with one pen alone and he had sought for a forensic test also which was not granted by the AO. When the assessee had alleged that the document was fabricated, the AO was duty bound to check the veracity of the contention of the assessee and his failure to do so lends credence to the contention of the assessee. Even the Ld. CIT(A), I have noted took no cognizance of this plea of the assessee. Therefore, it is abundantly clear that document based on which, the assessee was alleged to have advanced loan to the tune of Rs.15,52,000/- during the year in cash was a dumb document and since its veracity was challenged by the assessee, which was not inquired into by Revenue Authorities the same could not be treated as evidence for the purpose of making any addition in the hands of the assessee.

18. The findings of the Ld. CIT(A), I hold are of no consequence. The assessee had challenged the veracity of the documents itself before me, while the Ld. CIT(A) has picked up infirmities pointed out by the assessee in the document one by one and rejected the same, without commenting or giving any finding on the veracity of the diary itself.

19. In view of the same, I hold that the addition made in the hands of the assessee on account of alleged unsecured loans given in cash during the impugned year amounting to Rs.15.52 lacs, based on a diary seized during the survey is not tenable and I direct deletion of the same.

20. Ground of appeal No.2 is allowed.

21. In effect, the appeal of the assessee is allowed.

Order pronounced in the open court on 07.07.2026