Addition based on mere loose papers not justified

Facts of the Case The facts of the case are that search and seizure action u/s. 132 of the Act was carried on 21.2.2007 at the business premises of some person as well as residential premises of the assessee. Statutory notices were accordingly issued and served upon the assessee. During the course of the assessment proceedings, the assessee was issued a notice u/s. 142(1) of the Act. It was found that the assessee have transferred funds from the current business of the assessee to other establishments, investment in other business avenues etc. The assessee left for the USA in November 2004. It...