ITAT restricts addition based on noting in diary to 10% of gross receipts

Smt. Bhavana Jain, Prop. M/s Akash Metal Vs ITO (ITAT Delhi) The assessee’s explanation with regard to interest in the loose sheet i.e. blue diary found during the course of search was that it was for the purpose of memory and the addition could not have been made solely on the basis of loose paper which is against the well settled law in this regard. Moreover, the entire alleged receipt could not partake character of profit. The profit element embedded into such receipt could be subjected to tax. There is no ambiguity under law that no addition can be made merely on the basis of loose paper...