RG Home Furnishing Pvt. Ltd. Vs DCIT (ITAT Delhi)
Blank Letterheads Are “Dumb Documents”: Delhi ITAT Quashes 153A Assessments & Penalties for Want of Incriminating Materia- Suspicion Cannot Substitute Evidence—153A Additions Based on Blank Letterheads Invalid, ITAT Sets Aside All Years
Assessee, part of the Garg Group, was subjected to search on 22.06.2016 & assessments were framed u/s 153A r.w.s. 143(3) alleging bogus machinery purchases from four concerns—Fibretech Enterprises, Zenith Enterprises, Malik International & Supreme International—leading to disallowance of depreciation and consequential penalty u/s 271(1)(c). AO relied mainly on the fact that blank letterheads of these concerns were found on the Assessee’s computer & on certain discrepancies in TIN numbers, handwriting similarities, and alleged circular routing of payments.
Assessee pointed out that the coordinate Bench of the Tribunal, in its order dated 28.08.2025 for AYs 2011-12 to 2014-15 (unabated years), had already held that the very same seized materials—blank letter pads—were “dumb documents” incapable of forming valid incriminating material under the law laid down in Abhisar Buildwell (SC). Tribunal in that earlier order quashed the assessments because no addition could be made in absence of specific incriminating material found during search.
In the present appeals (abated years), Tribunal held that the AO’s entire case was still based only on suspicion arising from these blank letterheads & no other corroboration from search or post-search inquiry existed. Since the foundational material was already held to be non-incriminating, additions made u/s 153A r.w.s. 143(3) could not survive. All circumstantial reasoning of AO was held insufficient without actual seized evidence. Accordingly, Tribunal sustained Assessee’s grounds, quashed the impugned assessments & also deleted penalty as the superstructure could not stand once the foundation failed. Appeals were allowed in full.
