Kanchan Verma Vs DCIT (ITAT Dehradun)
Loose Sheets, No Cross-Examination, No Addition: ITAT Dehradun Deletes s.69B Addition
Dehradun ITAT (SMC), in Kanchan Verma vs. DCIT (ITA No.210/DDN/2025, AY 2019-20, order dated 23.12.2025), allowed the assessee’s appeal and deleted the addition of ₹4.50 lakh made u/s 69B r.w.s. 115BBE, which was based solely on loose papers seized from a third party during search proceedings.
The addition arose from a search u/s 132 on 02.02.2022, wherein certain handwritten sheets were seized from the premises of third parties. The AO treated figures mentioned against the assessee’s name as evidence of undisclosed investment, despite the fact that the seized document did not mention “cash”, nor was any corroborative statement recorded from the person from whose premises the documents were seized.
The Tribunal noted that the very same seized material had already been examined by a coordinate Bench in Bhagwani Devi vs. DCIT (ITA No.31/DDN/2025), where identical additions were deleted. Following that decision, the ITAT held that:
– loose sheets seized from third parties, without corroboration, cannot form the sole basis of addition;
– denial of cross-examination of the third party (despite specific request) amounts to violation of principles of natural justice; and
– reliance on such material without granting cross-examination renders the addition legally unsustainable, in line with SC ruling in Andaman Timber Industries.
Accordingly, the ITAT set aside the orders of the lower authorities and deleted the addition in full, allowing the assessee’s appeal.
FULL TEXT OF THE ORDER OF ITAT DEHRADUN
The present appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeals)-3[‘Ld. CIT(A)’ for short], Delhi dated 11/09/2025 for the Assessment Year 2019-20.
