Addition merely on the basis of rough papers found from premises of wife of assesse not sustainable

DCIT Vs. Smt. Manishaben N. Mashru (ITAT Rajkot)

Revenue challenges deletion of addition of Rs. 27.00 lakhs by the ld.CIT(A) on account of disallowance of fictitious liability.

During the assessment proceedings, on the basis of papers found in the survey proceedings, the AO formed an opinion that the assessee was having credit balance of Rs. 8,05,000/-with M/s. Divya Travels, and in the books of the assessee the assessee has shown liability of Rs. 18,95,000/-. The AO held the same to be fictitious liability and taxed accordingly. Assessee challenged this addition before the ld.CIT(A) who deleted the addition on the ground that rough papers found from the premises of wife of the assessee were mere notebooks and diaries and not books of accounts of the assessee. Besides, he observed that wife of the assessee has owned up the noting in the rough diary and taxed accordingly. The ld.CIT(A) has also observed that there is no documents or material evidence with the Revenue to link flow of unrecorded transactions with the assessee. Since there is no contrary material brought before us by the Revenue to convince us to take a different view, we do not find any merit in this ground of appeal. It is dismissed.

FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-

This bunch of appeals contains eight appeals by the Revenue, five cross-objections by two assessees viz. Smt. Manishaben N. Mashru and Shri Nailesh M. Mashru and one appeal filed by the assessee viz. Smt.Manishaben N. Mashru. All these appeals are directed against separate orders of the ld.CIT(A)-I. Assessment years involved in these appeals are from A.Y 2003-04 to 2006-07.

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